EXHIBIT 10.01
AGREEMENT FOR PURCHASE AND SALE
OF REAL PROPERTY AND ESCROW INSTRUCTIONS
THIS AGREEMENT FOR PURCHASE AND SALE OF REAL PROPERTY AND ESCROW
INSTRUCTIONS ("Agreement") is made and entered into as of this ______ day of
February, 2004, by and between WESTERN PLACE SKYRISE, LTD, a Texas limited
partnership ("Seller") and TRIPLE NET PROPERTIES, LLC, a Virginia limited
liability company ("Buyer"), with reference to the following facts:
A. Seller owns certain real property located in Tarrant County,
TEXAS and more specifically described in Exhibit A attached
hereto (the "Land"), commonly known as Western Place I & II,
located at 6000 & 0000 Xxxxxxx Xxxxx, Xx. Xxxxx, Xxxxx 00000,
Dallas, Texas and such other assets, as the same are herein
described.
B. Seller desires to sell to Buyer and Buyer desires to purchase
from Seller the Land and the associated assets.
NOW, THEREFORE, in consideration of the mutual covenants, premises and
agreements herein contained, the parties hereto do hereby agree as follows:
1. Purchase and Sale.
1.1. The purchase and sale includes, and at Close of Escrow
(hereinafter defined) Seller shall sell, transfer, grant and
assign to Buyer, Seller's entire right and interest in and to
all of the following (hereinafter sometimes collectively, the
"Property"):
1.1.1. The Land, together with all structures, buildings,
improvements, machinery, fixtures, and equipment
affixed or attached to the Land and all easements,
development rights, rights of way, and other rights
appurtenant to the Land (all of the foregoing being
collectively referred to herein as the "Real
Property");
1.1.2. All leases (the "Leases"), including associated
amendments, with all persons ("Tenants") leasing the
Real Property or any part thereof or hereafter
entered into in accordance with the terms hereof
prior to Close of Escrow, together with all security
deposits, other deposits held in connection with the
Leases, Lease guarantees and other similar credit
enhancements providing additional security for such
Leases;
1.1.3. All tangible and intangible personal property owned
by Seller located on or used in connection with the
Real Property, including, specifically,
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without limitation, equipment, furniture, tools and
supplies, any website maintained by the Seller and
all related intangibles including Seller's interest,
if any, in the name "Western Place I & II " (the
"Personal Property");
1.1.4. All service contracts, agreements, warranties and
guaranties relating to the operation, use or
maintenance of the Property (the "Contracts"); and
1.1.5. To the extent transferable, all building permits,
certificates of occupancy and other certificates,
permits, licenses and approvals relating to the
Property (the "Permits").
2. Purchase Price.
The total Purchase Price of the Property shall be Thirty Five Million
and No/100 Dollars ($35,000,000.00) ("PURCHASE PRICE"), and payable as
follows:
2.1. Deposit/Further Payments.
2.1.1. Within two (2) business days following the date a
fully executed original of this Agreement is
delivered to the Escrow Holder (hereinafter defined)
(such delivery date hereinafter the "EFFECTIVE
DATE"), Buyer shall deposit into Escrow (hereinafter
defined) the amount of Two Hundred Fifty Thousand and
No/100 Dollars ($250,000.00) (THE "DEPOSIT"), in the
form of a wire transfer payable to Partners Title
Company, 000 Xxxx Xxxxxx, Xxxxx 0000X, Xxxxxxx, Xxxxx
00000, Attention: Xxxxx Xxxxxxxxx, Telephone
713-229-8484, Facsimile: 000-000-0000 ("ESCROW
MOLDER"). Escrow Holder shall place the Deposit into
an interest bearing money market account at a bank or
other financial institution reasonably satisfactory
to Buyer, and interest thereon shall be credited to
Buyer's account and shall be deemed to be part of the
Deposit.
2.1.2. Intentionally deleted.
2.1.3. On or before Close of Escrow, Buyer shall deposit
with the Escrow Holder to be held in Escrow the
balance of the Purchase Price, in immediately
available funds by wire transfer made payable to
Escrow Holder.
2.1.4. In the event that this Agreement is terminated by
Buyer in accordance with any term or provision of
this Agreement permitting Buyer to terminate and
receive the Deposit, the Deposit shall be immediately
and automatically paid over to Buyer without the need
for any further action by either party hereto.
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3. Title to Property.
3.1. Title Insurance.
Seller will, at Seller's sole expense, cause Partners Title Company
(THE "TITLE COMPANY") to issue a TLTA Form T-1 Owner's Policy of Title
Insurance (the "TITLE POLICY") for and on behalf of Buyer in the total
amount of the Purchase Price and obtainable at statutory rates insuring
indefeasible title in and to the Real Property. The Title Policy shall
be free and clear of exceptions except as follows:
3.1.1. Real property taxes and assessments, which are a lien
not yet due;
3.1.2. The Permitted Exceptions (hereinafter defined)
included in such policy and either approved or
waived, as the case may be by Buyer as herein
described.
3.2. Procedure for Approval of Title.
Seller shall, no later than ten (10) days following the Effective Date,
provide to Buyer a current title insurance commitment (the "TITLE
COMMITMENT") for the Real Property, including legible copies of all
items identified as exceptions therein (the "Title Documents"). Buyer
shall have until fifteen days prior to the expiration of the Inspection
Period to review and approve, in writing, the condition of the title to
the Real Property ("TITLE REVIEW PERIOD"). If the Title Documents or
the Survey reflect or disclose any defect, exception or other matter
affecting the Real Property ("Title Defects") that is unacceptable to
Buyer, then Buyer shall provide Seller with written notice of Buyer's
objections no later than the conclusion of the Title Review Period;
provided, however, if Buyer shall fail to notify Seller in writing
within the Title Review Period of any specific objections to the state
of title to the Real Property, then Buyer shall be deemed to have
waived objection to all exceptions to title or other conditions or
matters which are shown on the Survey or described in the Title
Documents except those matters contained in Schedule C of the Title
Commitment. Seller may, at its sole option, elect, by written notice
given to Buyer within three (3) days following the conclusion of the
Title Review Period ("SELLER'S NOTICE PERIOD"), to cure or remove the
objections made or deemed to have been made by Buyer; provided,
however, Seller shall in all events have the obligation to (i) act in
good faith in making such election and curing any Title Defects that
Seller elects to cure, (ii) specifically remove any monetary
encumbrances affecting the Real Property if such exceptions may be
removed by payment of a liquidated sum and such sum does not in the
aggregate exceed the Purchase Price, and (iii) remove any Title Defect
that attaches to the Real Property subsequent to the conclusion of the
Title Review Period if such Title Defect may be removed by payment of a
liquidated sum and such sum does not in the aggregate exceed the
Purchase Price. The failure of Seller to deliver written notice
electing to cure any or all such objected to exceptions during the
Seller's Notice Period shall be deemed an election by
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Seller not to cure such exceptions. Should Seller elect to attempt to
cure or remove any objection, Seller shall have fifteen (15) days from
the conclusion of the Title Review Period ("CURE PERIOD") in which to
accomplish the cure. In the event Seller elects (or is deemed to have
elected) not to cure or remove any objection, then Buyer shall be
entitled, as Buyer's sole and exclusive remedies, either to (i)
terminate this Agreement and obtain a refund of the Deposit or (ii)
waive any objections that Seller has not elected to cure and close this
transaction as otherwise contemplated herein. The failure of Buyer to
provide written notice to Seller within ten (10) days following the
expiration of the Seller's Notice Period waiving any objections Seller
has not elected to cure shall be deemed an election by Buyer to close
this Agreement. Any exceptions to title accepted or waived by Buyer
pursuant to the terms of this paragraph shall be deemed "Permitted
Exceptions."
4. Due Diligence Items.
4.1. Seller shall, within five (5) business days following full
execution of this Agreement (THE "DELIVERY DATE"), deliver to
Buyer each of the following to the extent they are in Seller's
possession or control (collectively, the "Due Diligence
Items"):
4.1.1. Seller's existing survey of the Real Property (the
"SURVEY") which may be updated at the expense of
Buyer;
4.1.2. Copies of all Leases presently in effect with respect
to the Real Property, together with any amendments or
modifications thereof;
4.1.3. A "rent roll" with respect to the Real Property for
the calendar month immediately preceding the
Effective Date, showing with respect to each Tenant
of the Real Property: (1) the name of the Tenant, (2)
the number of rentable square feet in Tenant's
premises as set forth in Tenant's Lease, (3) the
current monthly base rental payable by such Tenant,
(4) the term of the Lease, (5) any available options
for the Tenant under the Lease; and (6) the amount of
any security deposit;
4.1.4. A "rent roll" current as of December, 2003 and 2004
year to date;
4.1.5. An aging report showing, with respect to each Tenant
of the Real Property, the date through which such
Tenant has paid rent and a Tenant by Tenant monthly
aging report for the period of Seller's ownership;
4.1.6. A list of all contracts, including service contracts,
warranties, management, maintenance, leasing
commission or other agreements affecting the Real
Property, if any, together with copies of the same;
4.1.7. All site plans, leasing plans, as-built plans,
drawings, environmental, mechanical, electrical,
structural, soils and similar reports and/or audits
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and plans and specifications relative to the Real
Property in the possession of Seller or under the
control of Seller, if any;
4.1.8. True and correct copies of the real estate and
personal property tax statements covering the
Property or any part thereof for each of the two (2)
years prior to the current year and, if available,
for the current year;
4.1.9. A schedule of all current or pending litigation with
respect to the Real Property or any part thereof, if
any, or otherwise with respect to Seller that might
have a material adverse effect on Seller's ability to
perform hereunder, together with a brief description
of each such proceeding;
4.1.10. Operating statements for the Real Property for the
Seller's period of ownership and the current year to
date;
4.1.11. Copies of Tenant files and records relating to the
ownership and operation of the Real Property
(provided, however, such files and records will be
made available for inspection by Buyer during
ordinary business hours at Seller's management
office);
4.1.12. An inventory of all personal property located on the
Real Property which is used in the maintenance of the
Real Property or stored for future use with the Real
Property;
4.1.13. Copies of utility bills for the Real Property for
Seller's period of ownership; and
4.1.14. Existing Environmental Site Assessment for the Real
Property.
4.2. Estoppel Certificates.
Seller shall obtain and deliver to Buyer, no later than ten (10) days
prior to Close of Escrow, estoppel certificates from (a) EnRisk,
CSC-ML, THR Foundation, BAE Information, THR- ML, Attorney General,
Community Hospice, THS Business Opera, Lockheed, Benefit Port Xxxxxx
Xxxxx, Etc, US GSA ATF, THS Business Opera, Xxxxxxxx Energy, Tarrant
Workforce, LIFO Systems and Gargen Cafe (collectively, the "Major
Tenants") and (b) seventy five percent (75%) of all remaining Tenants
of the Real Property (measured by square footage occupied) (the
"Required Percentage Estoppels"), in all cases in the form of Exhibit D
attached hereto and made a part hereof. In the event Seller is unable
to obtain the Required Percentage Estoppels despite diligent efforts to
do so, Seller may but shall not be obligated to deliver to Buyer an
estoppel certificate executed by Seller in the form of Exhibit D
covering sufficient estoppels that, together with those obtained, equal
the Required Percentage Estoppels; provided, however, Seller shall
thereafter continue to use diligent efforts to obtain an estoppel
certificate executed by any such Tenant. Whether executed by the Tenant
or by Seller, the matters certified in the estoppel certificates shall
be subject to Buyer's reasonable
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approval Buyer shall notify Seller within three (3) business days
following receipt of a copy of any executed estoppel certificate of
Buyer's approval or disapproval and the basis of such disapproval, if
disapproved. If (a) Buyer reasonably disapproves of any estoppel
certificate, and Seller is unable to deliver a reasonably acceptable
estoppel certificate prior to the Close of Escrow, and, without such
estoppel certificate Seller will have failed to deliver the Required
Percentage Estoppels or (b) Seller is unable to deliver acceptable
forms of the Major Estoppels, this Agreement shall automatically
terminate, Buyer shall be entitled to a refund of the Deposit without
any further action required by any party, and neither party shall have
any further obligation to the other. In addition to the foregoing,
Seller shall deliver to each tenant a subordination, attornment and
non-disturbance agreement required by Buyer's lender on the form
attached as Exhibit C. Seller will cooperate and assist Buyer in
obtaining subordination agreements required by Buyer's lender that are
prepared by Buyer or Buyer's lender.
5. Inspections.
5.1. Procedure; Indemnity.
Buyer, at its sole expense, shall have the right to conduct
feasibility, environmental, engineering and physical studies of the
Real Property at any time from and after Effective Date and for a
period of thirty (30) days thereafter (THE "DUE DILIGENCE PERIOD").
Buyer and its duly authorized agents or representatives shall be
permitted to enter upon the Real Property at all reasonable times
during the Due Diligence Period in order to conduct tenant interviews,
engineering studies, soil tests and any other inspections and/or tests
that Buyer may deem necessary or advisable (collectively, the
"Inspections"). Buyer agrees to promptly discharge any liens that may
be imposed against the Real Property as a result of Buyer's Inspections
and to defend, indemnify and hold Seller harmless from all claims,
suits, losses, costs, expenses (including without limitation court
costs and attorneys' fees), liabilities, judgments and damages incurred
by Seller as a result of any Inspections performed by Buyer. The
provisions of the foregoing indemnity shall survive termination of this
Agreement or the Close of Escrow, as applicable. Notwithstanding the
foregoing, Buyer may not conduct any invasive testing on or in the
Property without the prior written consent of Seller, which consent
shall not be unreasonably withheld or delayed. Copies of all inspection
reports or test results conducted or prepared by any third party
contractors or inspectors shall be furnished to Seller.
5.2. Approval.
5.2.1. Buyer shall have until the conclusion of the Due
Diligence Period (as the same may be extended in
accordance with the terms of Paragraph 5.1 above) to
approve or disapprove of the Inspections and the Due
Diligence Items enumerated in Paragraph 4. If Buyer
shall fail to deliver a written notice to Seller and
Escrow Holder within the Due Diligence Period
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approving the condition of the Real Property, this
Agreement shall thereupon be automatically
terminated, Buyer shall not be entitled to purchase
the Real Property, Seller shall not be obligated to
sell the Real Property to Buyer and the parties shall
be relieved of any further obligation to each other
with respect to the Real Property except for any
obligations that expressly survive termination. Upon
termination, Escrow Holder shall, without any further
action required from any party, return all documents
and funds, including the Deposit, to the parties who
deposited same and no further duties shall be
required of Escrow Holder.
5.2.2. Notwithstanding anything to the contrary contained
herein, Buyer hereby agrees that in the event this
Agreement is terminated for any reason, then Buyer
shall promptly and at its sole expense return to
Seller all Due Diligence Items which have been
delivered by Seller to Buyer in connection with
Buyer's inspection of the Real Property.
6. Escrow.
6.1. Opening.
Purchase and sale of the Property shall be consummated through an
escrow ("Escrow") to be opened with Escrow Holder within two (2)
business days after the execution of this Agreement by Seller and
Buyer. This Agreement shall be considered as the Escrow instructions
between the parties, with such further consistent instructions as
Escrow Holder shall require in order to clarify its duties and
responsibilities. If Escrow Holder shall require further Escrow
instructions, Escrow Holder may prepare such instructions on its usual
form. Such further instructions shall, so long as not inconsistent with
the terms of this Agreement, be promptly signed by Buyer and Seller and
returned to Escrow Holder within three (3) business days of receipt
thereof. In the event of any conflict between the terms and conditions
of this Agreement and any further Escrow instructions, the terms and
conditions of this Agreement shall control.
6.2. Close of Escrow.
Escrow shall close ("CLOSE OF ESCROW") on the later to occur of thirty
(30) days after the expiration of the Due Diligence Period or April
1, 2004.
6.3. Buyer Required to Deliver.
Buyer shall deliver to Escrow the following:
6.3.1. In accordance with Paragraph 2, the Deposit;
6.3.2. On or before Close of Escrow, the balance of the
Purchase Price; provided, however that Buyer shall
not be required to deposit the balance of the
Purchase Price into Escrow until Buyer has been
notified by Escrow
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Holder that (i) Seller has delivered to Escrow each
of the documents and instruments to be delivered by
Seller in connection with Buyer's purchase of the
Property, and (ii) Title Company has committed to
issue and deliver the Title Policy to Buyer.
6.3.3. On or before Close of Escrow, such other documents as
Escrow Holder may require from Buyer in order to
issue the Title Policy; and
6.3.4. A counterpart original of an Assignment and
Assumption Agreement in the form attached hereto as
Exhibit B (the "Assignment Agreement"), duly executed
by Buyer assigning all of Seller's right, title and
interest in and to the Leases, Contracts and Permits
from and after the Close of Escrow.
6.4. Seller Required to Deliver.
On or before Close of Escrow, Seller shall deliver to Escrow or Buyer,
as applicable, the following:
6.4.1. A duly executed and acknowledged Special Warranty
Deed (warranting title by, through and under Seller,
but not otherwise), conveying fee title to the Real
Property in favor of Buyer subject only to the
Permitted Exceptions and containing the language on
Exhibit E attached hereto and made a part hereof;
6.4.2. A completed Certificate of Non-Foreign Status, duly
executed by Seller under penalty of perjury;
6.4.3. A Xxxx of Sale, in the form agreed to by Seller and
Buyer, for the Personal Property, if any, in favor of
Buyer and duly executed by Seller;
6.4.4. Such other documents as Escrow Holder may require
from Seller in order to issue the Title Policy;
6.4.5. If not previously delivered to Buyer, Tenant's
estoppel certificates as required by and provided for
in Paragraph 4.2;
6.4.6. A counterpart original of the Assignment Agreement
duly executed by Seller, assigning all of Seller's
right, title and interest in and to the Leases,
Contracts and Permits to Buyer from and after the
Close of Escrow;
6.4.7. To the extent Seller has same in its possession or
control, Seller will leave at the Property, all keys
to all buildings and other improvements located on
the Real Property, combinations to any safes thereon,
and security devices therein in Seller's possession;
6.4.8. A letter from Seller addressed to each Tenant
informing such Tenant of the change in ownership as
set forth;
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6.4.9. To the extent Seller has same in its possession or
control, Seller will leave at the Property, the
original Leases; and
6.4.10. To the extent Seller has same in its possession or
control, Seller will leave at the Property, all
records and files relating to the management or
operation of the Real Property, including, without
limitation, all insurance policies, all service
contracts, all tenant files (including
correspondence), property tax bills, and all
calculations used to prepare statements of rental
increases under the Leases and statements of common
area charges, property taxes and other charges which
are paid by Tenants of the Real Property.
6.5. Buyer's Costs.
Buyer shall pay the following:
6.5.1. One-half (1/2) of Escrow Holder's fee, costs and
expenses;
6.5.2. All other costs customarily borne by purchasers of
real property in Tarrant County, Texas;
6.5.3. The cost of recording the Deed;
6.5.4. The cost of updating the Survey;
6.5.5. The cost of endorsements to the Title Policy,
including, without limitation, the deletion of the
Survey exception except for "shortages named"
6.6. Seller's Costs.
Seller shall pay the following:
6.6.1. One-half (1/2) of Escrow Holder's fees, costs and
expenses;
6.6.2. Escrow Holder premium for the Standard T-1 Form of
Title Policy; and
6.6.3. All other costs customarily borne by sellers of real
property in Tarrant County, Texas.
6.7. Prorations.
6.7.1. Real property taxes, personal property taxes,
assessments, rents, and operating expenses shall be
prorated through Escrow between Buyer and Seller as
of Close of Escrow. All security deposits shall be
paid over to Buyer. Rents and CAM expenses shall be
approved by Buyer prior to Close of Escrow, Any
delinquent rents attributable to periods prior to the
Close of Escrow and which are collected by Buyer or
Seller shall be retained by or paid to Seller;
provided, however, that any amounts
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collected by Buyer or Seller shall be first applied
to any rents then due to Buyer and, if collected by
Seller, remitted to Buyer for such purpose. Seller
shall have the right to pursue any Tenant for
delinquent rent, but shall not (a) cause Tenant to be
delinquent for their current rent or become
financially unstable or (b) have the right to seek
eviction of the Tenant by unlawful detainer or other
means. Tax and assessment prorations shall be based
on the latest available tax xxxx. If after Close of
Escrow either party receives any further or
supplemental tax xxxx relating to any period prior to
Close of Escrow, the recipient shall promptly deliver
a copy of such tax xxxx to the other party, and not
later than ten (10) days prior to the delinquency
date shown on such tax xxxx Buyer and Seller shall
deliver to the taxing authority their respective
shares of such tax xxxx, prorated as of Close of
Escrow. All prorations shall be based on a 365-day
year.
Any percentage rents due or paid under any of the
Leases ("Percentage Rent") shall be prorated between
Buyer and Seller outside of Escrow as of the date of
Close of Escrow on a Lease-by-Lease basis, as
follows; (a) Seller shall be entitled to receive the
portion of the Percentage Rent under each Lease for
the Lease Year in which Close of Escrow occurs, which
portion shall be the ratio of the number of days of
said Lease Year in which Seller was Landlord under
the Lease to the total number of days in the Lease
Year, and (b) Buyer shall receive the balance of
Percentage Rent paid under each Lease for the Lease
Year. As used herein, the term "Lease Year" means the
twelve (12) month period as to which annual
Percentage Rent is owed under each Lease. Upon
receipt by either Buyer or Seller of any gross sales
reports ("Gross Sales Reports") and any full or
partial payment of Percentage Rent from any tenant of
the Property, the party receiving the same shall
provide to the other party a copy of the Gross Sales
Report and a check for the other party's prorata
share of the Percentage Rent within five (5) days of
the receipt thereof. In the event that the Tenant
only remits a partial payment, then the amount to be
remitted to the other party shall be its prorata
share of the partial payment. Nothing contained
herein shall be deemed or construed to require either
Buyer to Seller to pay to the other party its prorata
share of the Percentage Rent prior to receiving the
Percentage Rent from the Tenant, and the acceptance
or negotiation of any check for Percentage Rent by
either party shall not be deemed a waiver of that
party's right to contest the accuracy or amount of
the Percentage Rent paid by the Tenant.
6.7.2. All leasing commissions and tenant improvement costs
owing with respect to Leases of the Real Property
entered into prior to execution of the Agreement
including, but not limited to, commissions for lease
renewals and expansion options, shall be paid by
Seller, and Seller shall indemnify
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and hold Buyer harmless for lease commission claims
brought against the Real Property or Buyer arising
therefrom. All leasing commissions and tenant
improvement costs for new Leases executed after the
date of this Agreement shall be prorated between
Buyer and Seller as their respective periods of
ownership of the Real Property bears to the primary
term of the new Lease, subject, in all events, to the
prior approval of said Leases as herein provided by
Buyer pursuant to Paragraph 7.3.
6.7.3. Seller agrees to indemnify and hold Buyer harmless
from any and all liabilities, claims, demands, suits,
and judgments, of any kind or nature, including court
costs and reasonably attorney fees (except those
items which under the terms of this Agreement
specifically become the obligation of Buyer), brought
by third parties and based on amounts which are the
responsibility of Seller which are in any way related
to the Property.
6.7.4. Buyer agrees to indemnify and hold Seller harmless of
and from any and all liabilities, claims, demands,
suits and judgments, of any kind or nature, including
court costs and reasonable attorneys fees, brought by
third parties and based on amounts which are the
responsibility of Buyer which are in any way related
to the Property.
The provisions of this Section 6.7 shall survive the Close of Escrow.
6.8. Determination of Dates of Performance.
Promptly after delivery to the Escrow Holder of a fully executed copy
of this Agreement, Escrow Holder shall prepare and deliver to Buyer and
Seller a schedule which shall state each of the following dates:
6.8.1. The Effective Date pursuant to Paragraph 2.1.1;
6.8.2. The date of receipt of the Title Documents by Buyer;
6.8.3. The date by which title objections must be made by
Buyer pursuant to Paragraph 3.2;
6.8.4. The Delivery Date pursuant to Paragraph 4.1;
6.8.5. Expiration date of the Due Diligence Period;
6.8.6. The date by which the amount described in Paragraph
2.1.3 must be deposited by Buyer; and
6.8.7. The date of Close of Escrow pursuant to Paragraph
6.2.
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If any events which determine any of the aforesaid dates occur on a
date other than the date specified or assumed for its occurrence in
this Agreement, Escrow Holder shall promptly redetermine as appropriate
each of the dates of performance in the aforesaid schedule and notify
Buyer and Seller of the dates of performance, as redetermined.
7. Seller Representations, Warranties, and Covenants.
7.1. Representations and Warranties.
Seller hereby represents and warrants as of the date hereof and as of
the Close of Escrow by appropriate certificate to Buyer as follows:
7.1.1. Seller is a limited partnership duly formed and
validly existing under the law of the State of Texas.
Seller has full power and authority to enter into
this Agreement, to perform this Agreement and to
consummate the transactions contemplated hereby. The
execution, delivery and performance of this Agreement
and all documents contemplated hereby by Seller have
been duly and validly authorized by all necessary
action on the part of Seller and all required
consents and approvals have been duly obtained and
will not result in a breach of any of the terms or
provisions of, or constitute a default under, any
indenture, agreement or instrument to which Seller is
a party or otherwise bound. This Agreement is a
legal, valid and binding obligation of Seller,
enforceable against Seller in accordance with its
terms, subject to the effect of applicable
bankruptcy, insolvency, reorganization, arrangement,
moratorium or other similar laws affecting the rights
of creditors generally.
7.1.2. Seller has indefeasible title to the Real Property,
subject to the Permitted Exceptions. To the best of
Seller's current actual knowledge, there are no
outstanding rights of first refusal, rights of
reverter or options relating to the Real Property or
any interest therein. To the best of Seller's current
actual knowledge, there are no unrecorded or
undisclosed documents or other matters which affect
title to the Real Property.
7.1.3. Seller is not a "foreign person" within the meaning
of Section 1445(f) of the Internal Revenue Code of
1986, as amended (the "Code").
7.1.4. There are no on-site employees of Seller at the Real
Property, and following the Close of Escrow, Buyer
shall have no obligation to employ or continue to
employ any individual employed by Seller or its
affiliates in connection with the Real Property.
7.1.5. Except as set forth on any schedule of litigation
delivered pursuant to Paragraph 4.1.9, there are no
actions, suits or proceedings pending, or to the best
of Seller's current actual knowledge, threatened
against Seller and
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affecting any portion of the Real Property, at law or
in equity, or before or by any federal, state,
municipal, or other governmental court, department,
commission, board, bureau, agency, or
instrumentality, domestic or foreign.
7.1.6. Seller has not received any notice of any violations
of any ordinance, regulation, law, or statute of any
governmental agency pertaining to the Real Property
or any portion thereof.
7.1.7. The information in the Rent Roll is true, correct and
complete. No persons, tenants or entities occupy
space in the Real Property, except as stated in the
Rent Roll. There are no written or oral agreements
that will obligate Buyer, as Seller's assignee, to
pay any such commission or fee under any Lease or
extension, expansion or renewal thereof. No rent or
other payments have been collected in advance for
more than one (1) month and no rents or other
deposits are held by Seller, except the security
deposits described on the Rent Roll and rent for the
current month.
7.1.8. The operating statements furnished to Buyer in
connection with or pursuant to this Agreement (a)
accurately reflect the financial condition of the
Real Property as of the date thereof and (b) do not
fail to state any material liability, contingent or
otherwise, or any other facts the omission of which
would be misleading.
7.1.9. To Seller's knowledge, there are no presently pending
or contemplated proceedings to condemn the Real
Property or any part of it.
7.1.10. Seller has no knowledge of nor received any written
notice of violation issued pursuant to any
environmental law with respect to the Real Property
or any use or condition thereof.
7.2. Indemnity; Survival.
The foregoing representations and warranties of Seller are made by
Seller as of the date hereof and again as of Close of Escrow and shall
survive the Close of Escrow for a period of one year and shall not be
merged as of the date of the Close of Escrow hereunder.
7.3. Covenants of Seller. Seller hereby covenants from and after
the Effective Date as follows:
7.3.1. To cause to be in force fire and extended coverage
insurance upon the Real Property, and public
liability insurance with respect to damage or injury
to persons or property occurring on the Real Property
in at least such amounts, and with the same
deductibles, as are maintained by Seller on the date
hereof.
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7.3.2. To maintain any building constituting an improvement
on the Real Property in the same physical condition
as it was at the date of Buyer's inspection,
reasonable wear and tear excepted, and to perform all
normal maintenance from and after the Effective Date
in the same fashion as prior to the Effective Date.
7.3.3. To not enter into any new lease with respect to the
Real Property, without Buyer's prior, written
consent, which shall not be unreasonably withheld.
Exercise of a mandatory renewal option shall not be
considered a new lease. To the extent specifically
disclosed to Buyer in connection with any request for
approval, any brokerage commission and the cost of
Tenant improvements or other allowances payable with
respect to a new Lease shall be prorated between
Buyer and Seller in accordance with their respective
periods of ownership as it bears to the primary term
of the new Lease. After the expiration of the Due
Diligence Period, if the Agreement is still in full
force and effect, Seller will not modify or cancel
any existing Lease covering space in the Real
Property without first obtaining the written consent
of Buyer which shall not be unreasonably withheld.
Buyer shall have five (5) business days following
receipt of a request for any consent pursuant to this
paragraph in which to approve or disapprove of any
new Lease or any modification or cancellation of any
existing Lease. Failure to respond in writing within
said time period shall be deemed to be consent. If
Seller desires to enter into such lease or
modification of lease prior to the expiration of the
Due Diligence Period despite Buyer's objections to
such new or modified lease, Buyer may elect to either
(a) waive the Due Diligence Period, in which event
Seller shall not enter into such new or modified
lease, or (b) terminate this Agreement.
7.3.4. To not sell, assign, or convey any right, title, or
interest whatsoever in or to the Real Property, or
create or permit to attach any lien, security
interest, easement, encumbrance, charge, or condition
affecting the Real Property (other than the Permitted
Exceptions).
7.3.5. To not, without Buyer's written consent, which shall
not be unreasonably withheld, conditioned or delayed,
(a) amend or waive any right under any Contract, or
(b) enter into any service, operating or maintenance
agreement affecting the Real Property that would
survive the Close of Escrow.
7.3.6. To fully and timely comply with all obligations to be
performed by it under the Leases and Contracts, and
all Permits, licenses, approvals and laws,
regulations and orders applicable to the Real
Property.
7.3.7. To provide Buyer with monthly rent rolls containing
the same information in its rent roll delivered
pursuant to Paragraph 4.1.3.
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7.3.8. To provide Buyer with copies of (a) any default
letters sent to Tenants and, (b) any copies of
correspondence received from a Tenant that it is
"going dark" or seeking to re-negotiate its lease and
(c) notices of bankruptcy filings received with
respect to any Tenant.
8. Buyer Representations and Warranties.
Buyer hereby represents and warrants to Seller as of the date hereof
and as of the Close of Escrow by appropriate certificate that:
Buyer is a limited liability company duly organized and validly
existing under the laws of the Commonwealth of Virginia. Buyer has full
power and authority to enter into this Agreement, to perform this
Agreement and to consummate the transactions contemplated hereby. The
execution, delivery and performance of this Agreement and all documents
contemplated hereby by Buyer have been duly and validly authorized by
all necessary action on the part of Buyer and all required consents and
approvals have been duly obtained and will not result in a breach of
any of the terms or provisions of, or constitute a default under, any
indenture, agreement or instrument to which Buyer is a party or
otherwise bound. This Agreement is a legal, valid and binding
obligation of Buyer, enforceable against Buyer in accordance with its
terms, subject to the effect of applicable bankruptcy, insolvency,
reorganization, arrangement, moratorium or other similar laws affecting
the rights of creditors generally.
9. Conditions Precedent to Close of Escrow.
9.1. Conditions Precedent.
The obligations of Buyer to purchase the Property pursuant to this
Agreement shall, at the option of Buyer, be subject to the following
conditions precedent:
9.1.1. All of the representations, warranties and agreements
of Seller set forth in this Agreement shall be true
and correct in all material respects as of the date
hereof and as of the Close of Escrow, and Seller
shall not have on or prior to the Close of Escrow,
failed to meet, comply with or perform in any
material respect any covenants or agreements on
Seller's part as required by the terms of this
Agreement.
9.1.2. There shall be no change in the matters reflected in
the Title Documents, and there shall not exist any
encumbrance or title defect affecting the Real
Property not described in the Title Documents except
for the Permitted Exceptions or matters to be
satisfied at the Close of Escrow.
9.1.3. Unless Seller receives notice from Buyer prior to the
Close of Escrow, effective as of the Close of Escrow,
any management agreement affecting the Real Property
shall be terminated by Seller and any and all
termination fees incurred as a result thereof shall
be the sole obligation of Seller.
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9.1.4. No Major Tenant shall be in default under its Lease
nor shall any Major Tenant have given notice that it
is discontinuing operations at the Real Property nor
shall a Major Tenant filed bankruptcy or sought any
similar debtor protective measure or be the subject
of an involuntary bankruptcy.
9.1.5. If any Tenant security deposit is in a form other
than cash, the instrument constituting the security
deposit must be reissued in Buyer's name as of the
Close of Escrow or else a cash escrow equal to the
amount of the security deposit will be established at
the Close of Escrow until the instrument is reissued
in Buyer's name.
9.2. Effect of Failure.
If Buyer notifies Seller of a failure to satisfy the conditions
precedent set forth in this Paragraph 9, Seller may, within five (5)
days after receipt of Buyer's notice, agree to satisfy the condition by
written notice to Buyer, and Buyer shall thereupon be obligated to
close the transaction provided (a) Seller so satisfies such condition
and (b) no such right to cure shall extend the Close of Escrow beyond
the five (5) day cure period. If Seller fails to agree to cure or fails
to cure such condition by the Close of Escrow, this Agreement shall be
automatically terminated, the Deposit shall be returned to Buyer
without any further action required from either party and neither party
shall have any continuing obligations hereunder; provided, however, if
such failure constitutes a breach or default of its covenants,
representations or warranties Seller shall remain liable for such
breach or default as otherwise set forth in this Agreement.
10. Damage or Destruction Prior to Close of Escrow.
In the event that the Real Property should be damaged by any casualty
prior to Close of Escrow, then Seller shall promptly provide Buyer with
written notice of such casualty. If the cost of repairing such damage,
as estimated by an architect or contractor retained pursuant to the
mutual agreement of the parties (the "Cost of Repairs"), is (a) less
than Five Hundred Thousand Dollars ($100,000), the Close of Escrow
shall proceed as scheduled and any insurance proceeds, plus the cash
amount of any associated deductible, shall be paid over to Buyer; or
(b) greater than Five Hundred Thousand Dollars ($500,000), then Buyer
may in its discretion either (i) elect to terminate this Agreement, in
which case the Deposit shall be returned to Buyer without any further
action required from either party and neither party shall have any
further obligation to the other except for obligations herein that
expressly survive termination or Close of Escrow or (ii) proceed to
Close of Escrow in which event any insurance proceeds, plus the cash
amount of any associated deductible, shall be paid over to Buyer. In
the event that the casualty is uninsured, the Buyer may terminate this
Agreement unless the Buyer receives a credit against the Purchase Price
equal to the Cost of Repairs. The foregoing notwithstanding, in the
event any casualty results in the cancellation of, or rental abatement
under, any Lease, Buyer shall have the option to terminate this
16
Agreement without regard to the cost of repairs. Any notice required to
terminate this Agreement pursuant to this Paragraph shall be delivered
no later than thirty (30) days following Buyer's receipt of Seller's
notice of such casualty.
11. Eminent Domain.
If, before the Close of Escrow, proceedings are Commenced for the
taking by exercise of the power of eminent domain of all or a material
part of the Real Property which, as reasonably determined by Buyer,
would render the Real Property unacceptable to Buyer or unsuitable for
Buyer's intended use, Buyer shall have the right, by giving written
notice to Seller within thirty (30) days after Seller gives notice of
the commencement of such proceedings to Buyer, to terminate this
Agreement, in which event this Agreement shall automatically terminate,
the Deposit shall be returned to Buyer without any further action
required from either party and neither party shall have any continuing
obligations hereunder except for obligations herein that expressly
survive termination or Close of Escrow. If, before the Close of Escrow,
proceedings are commenced for the taking by exercise of the power of
eminent domain of less than a material part of the Real Property, or if
Buyer has the right to terminate this Agreement pursuant to the
preceding sentence but Buyer does not exercise such right, then this
Agreement shall remain in full force and effect and, on the Close of
Escrow, the condemnation award (or, if not theretofore received, the
right to receive such portion of the award) payable on account of the
taking shall be assigned, or paid to, Buyer. Seller shall give written
notice to Buyer within three (3) business days after Seller's receiving
notice of the commencement of any proceedings for the taking by
exercise of the power of eminent domain of all or any part of the Real
Property. The foregoing notwithstanding, in the event the taking
results in the cancellation of, or rent abatement under, any Lease,
Buyer shall have the option to terminate this Agreement.
12. Notices.
All notices, demands, or other communications of any type given by any
party hereunder, whether required by this Agreement or in any way
related to the transaction contracted for herein, shall be void and of
no effect unless given in accordance with the provisions of this
Paragraph. All notices shall be in writing and delivered to the person
to whom the notice is directed, either (a) in person, (b) by United
States Mail, as a registered or certified item, return receipt
requested, (c) by telecopy or (d) by a nationally recognized overnight
delivery courier. Notices delivered by telecopy shall be deemed
received upon electronic confirmation of receipt and overnight courier
shall be deemed received on the business day following delivery to the
overnight courier. Notices delivered by certified or registered mail
shall be deemed delivered three (3) days following posting. Notices
shall be given to the following addresses:
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Seller Western Place Skyrise, Ltd.
00000 Xxxxxxx Xxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn: Mr. Xxxxx Xxxxxxx
(000)000-0000
(000)000-0000 (fax)
With Required Copy to: Xxx Xxxxxx
0000 Xxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
(000) 000-0000
(000)000-0000 (fax)
With Required Copy to: Xxxxxxx X. Xxxxxxxxxx
Gardere Xxxxx Xxxxxx LLP
0000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
(000) 000-0000
(000) 000-0000 fax
Buyer Xxxx Xxxxxxxx & Xxxxxxx Xxxxxx
Triple Net Properties, LLC
0000 X. Xxxxxx Xxxxxx, Xxxxx 000
Xxxxx Xxx, XX 00000
(000) 000-0000
(000) 000-0000 Fax
With Required Copy to: Xxxxx X. Xxxxxx, Esquire
Xxxxxxxxx Xxxxxxxxx
000 Xxxx Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxx, XX 00000
(000) 000-0000
(000) 000-0000 Fax
13. Remedies.
13.1. Defaults by Seller. If there is any default by Seller under
this Agreement, following notice to Seller and seven (7) days
thereafter during which period Seller may cure the default,
Buyer may at its option, as Buyer's sole and exclusive remedy
either (a) declare this Agreement terminated in which case the
Deposit shall be returned to Buyer without any further action
required from either party, or (b) treat the Agreement as
being in full force and effect and bring an action against
Seller for specific performance; provided, however, in that
event Buyer must file suit for specific performance with
ninety (90) days after the Scheduled Close of Escrow or such
remedy is waived, and in such action, Seller shall be
18
required to deliver only such title as Seller is able to
deliver. The foregoing notwithstanding, no right to cure shall
extend the Close of Escrow. In the event Seller willfully
fails or refuses to close, and Buyer is not in default, then
Seller may, in addition to terminating this Contract, maintain
an action against Seller for actual out-of-pocket expenses in
connection with Buyer's due diligence under this Agreement not
to exceed in the aggregate, $25,000.00.
13.2. Defaults by Buyer. If there is any default by Buyer under this
Agreement, Seller may, as its sole remedy, declare this
Agreement terminated, in which case the Deposit shall be paid
to Seller as liquidated damages and each party shall thereupon
be relieved of all further obligations and liabilities, except
any which survive termination. The foregoing notwithstanding,
no right to cure shall extend the Close of Escrow.
In the event this Agreement is terminated due to the default of Buyer
hereunder, Buyer shall, in addition, deliver to Seller, at no cost to
Seller, the Due Diligence items and all inspection reports and results
conducted or prepared by third parties.
14. Assignment.
Buyer may assign any or all of its rights and obligations under this
Agreement to any one or more persons or entities controlled by or under
common control with Buyer or Buyer's principals upon notice to Seller;
provided however, that absent the express agreement of Seller, no such
assignment shall release Buyer from its liabilities hereunder. Buyer
must furnish a copy of the assignment at least three (3) business days
prior to the Close of Escrow.
15. Interpretation and Applicable Law.
This Agreement shall be construed and interpreted in accordance with
the laws of the State where the Real Property is located. Where
required for proper interpretation, words in the singular shall include
the plural; the masculine gender shall include the neuter and the
feminine, and vice versa. The terms "successors and assigns" shall
include the heirs, administrators, executors, successors, and assigns,
as applicable, of any party hereto.
16. Amendment.
This Agreement may not be modified or amended, except by an agreement
in writing signed by the parties. The parties may waive any of the
conditions contained herein or any of the obligations of the other
party hereunder, but any such waiver shall be effective only if in
writing and signed by the party waiving such conditions and
obligations.
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17. Attorney's Fees.
In the event it becomes necessary for either party to file a suit to
enforce this Agreement or any provisions contained herein, the
prevailing party shall be entitled to recover, in addition to all other
remedies or damages, reasonable attorneys' fees and costs of court
incurred in such suit.
18. Entire Agreement; Survival.
This Agreement (and the items to be furnished in accordance herewith)
constitutes the entire agreement between the parties pertaining to the
subject matter hereof and supersedes all prior and contemporaneous
agreements and understandings of the parties in connection therewith.
No representation, warranty, covenant, agreement, or condition not
expressed in this Agreement shall be binding upon the parties hereto
nor shall affect or be effective to interpret, change, or restrict the
provisions of this Agreement. None of the obligations of the parties
hereunder nor any other provisions of this Agreement shall survive the
Close of Escrow or earlier termination of this Agreement, except as
expressly provided herein.
19. Counterparts.
This Agreement may be executed in any number of counterparts, all of
which when taken together shall constitute the entire agreement of the
parties.
20. Acceptance.
Time is of the essence of this Agreement. If the final date of any
period falls upon a Saturday, Sunday, or legal holiday under the
Federal law or laws of the State of Texas, then in such event the
expiration date of such period shall be extended to the next day which
is not a Saturday, Sunday, or legal holiday under Federal law or the
laws of the State of Texas.
21. Real Estate Commission.
Seller and Buyer each represent and warrant to the other that neither
Seller nor Buyer has contacted or entered into any agreement with any
real estate broker, agent, finder or any other party in connection with
this transaction, and that neither party has taken any action which
would result in any real estate broker's, finder's or other fees or
commissions being due and payable to any party with respect to the
transaction contemplated hereby, except that Seller has contracted with
CB Xxxxxxx Xxxxx as its broker and will pay a commission equal to one
percent (1%) times (the Purchase Price minus $1,000,000.00) to said
broker and a commission of One Million Dollars ($1,000,000.00) to
Triple Net Properties Realty, Inc. if, but only if, the Close of Escrow
occurs pursuant to this Agreement. Such commission shall be payable
upon the Close of Escrow from the proceeds of the Purchase Price
deposited by Buyer. Each party hereby indemnifies and agrees to hold
the other party harmless from any loss, liability, damage, cost, or
expense
20
(including reasonable attorneys' fees) resulting to the other party by
reason of a breach of the representation and warranty made by such
party in this Paragraph..
22. Cooperation with S-X 3-14 Audit.
The Seller acknowledges that Buyer intends to assign all of its rights,
title and interest in and to this Agreement. The assignee may be a
publicly registered company ("Registered Company") promoted by the
Buyer. The Seller acknowledges that it has been advised that if the
purchaser is a Registered Company, the assignee is required to make
certain filings with the Securities and Exchange Commission (the "SEC
Filings") that related to the most recent pre-acquisition fiscal year
(the "Audited Year") for the Property. To assist the assignee in
preparing the SEC Filings, the Seller agrees to provide, if and only to
the extent that the same is in possession of Seller, and not otherwise,
the assignee with the following:
1. Access to bank statements for the Audited year;
2. Rent Roll as of the end of the Audited Year;
3. Operating Statements for the Audited Year;
4. Access to the general ledger for the Audited Year;
5. Cash receipts schedule for each month in the Audited Year;
6. Access to invoice for expenses and capital improvements in the
Audited Year;
7. Copies of all insurance documentation for the Audited Year;
8. Copies of accounts receivable aging as of the end of the
Audited Year and an explanation for all accounts over 30 days
past due as of the end of the Audited Year; and
9. Copy of signed representation letter at the end of the field
work.
This Section 22 shall survive Closing and shall not be merged into the
Deed.
THE BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK
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SIGNATURE PAGE FOR AGREEMENT FOR PURCHASE
AND SALE OF REAL PROPERTY AND ESCROW INSTRUCTIONS
EXECUTED on this 26th day of February, 2004
SELLER:
WESTERN PLACE SKYRISE, LTD.,
a Texas limited partnership
By: WESTERN PLACE SKYRISE, GP, LLC.,
its general partner
By: /s/ Xxxxx Xxxxxxx-Xxxx
-----------------------------------
Name: Xxxxx Xxxxxxx-Xxxx
Title: VP
EXECUTED on this 25th day of February, 2004
BUYER:
TRIPLE NET PROPERTIES, LLC,
a Virginia limited liability company
By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------
Xxxxxxx X. Xxxxxxxx
President
A-1
TITLE COMPANY ACKNOWLEDGEMENT:
Title Company hereby acknowledges receipt of a fully executed copy of this
Agreement on February 27, 2004, and the Deposit on February 27, 2004.
PARTNERS TITLE COMPANY
By: /s/ Xxxxx Xxxxxxxxx
-------------------
Its: XXXXX XXXXXXXXX
Title: SR. V. P.
23
