EXHIBIT 99.3
PURCHASE AND SALE AGREEMENT
BETWEEN
XXXXXXXXXX LABORATORIES, INC.,
AS SELLER
AND
RAINIER CAPITAL MANAGEMENT, L.P.,
AS PURCHASER
DATED: OCTOBER 20, 2005
XXXXXXXXXX LABORATORIES HEADQUARTERS FACILITY
0000 XXXXXX XXXX XXXX
XXXXXX, XXXXX
TABLE OF CONTENTS
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Page No.
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ARTICLE 1
BASIC INFORMATION
1.1 Certain Basic Terms .................................... 1
1.2 Closing Costs .......................................... 3
1.3 Notice Addresses: ...................................... 3
ARTICLE 2
PROPERTY
2.1 Property ............................................... 4
2.2 Intentionally Omitted .................................. 4
ARTICLE 3
XXXXXXX MONEY
3.1 Deposit and Investment of Xxxxxxx Money ................ 4
3.2 Independent Consideration .............................. 5
3.3 Form; Failure to Deposit ............................... 5
3.4 Disposition of Xxxxxxx Money ........................... 5
ARTICLE 4
DUE DILIGENCE
4.1 Due Diligence Materials To Be Delivered ................ 5
4.2 Physical Due Diligence ................................. 6
4.3 Due Diligence/Termination Right ........................ 7
4.4 Return of Documents and Reports ........................ 7
4.5 Service Contracts ...................................... 7
4.6 Proprietary Information; Confidentiality ............... 7
4.7 No Representation or Warranty by Seller ................ 8
4.8 Purchaser's Responsibilities ........................... 8
4.9 Purchaser's Agreement to Indemnify ..................... 8
4.10 Environmental Studies .................................. 8
ARTICLE 5
TITLE AND SURVEY
5.1 Title Commitment ...................................... 9
5.2 Updated Survey ........................................ 9
5.3 Title Review .......................................... 9
5.4 Delivery of Title Policy at Closing ................... 9
5.5 Waiver of Requirement to Deliver Title Policy ......... 9
ARTICLE 6
OPERATIONS AND RISK OF LOSS
6.1 Ongoing Operations .................................... 10
6.2 Damage ................................................ 10
6.3 Condemnation .......................................... 11
ARTICLE 7
CLOSING
7.1 Closing ............................................... 11
7.2 Conditions to Parties' Obligation to Close ............ 11
7.3 Seller's Deliveries in Escrow ......................... 12
7.4 Purchaser's Deliveries in Escrow ...................... 13
7.5 Closing Statements .................................... 13
7.6 Purchase Price ........................................ 13
7.7 Possession ............................................ 13
7.8 Delivery of Books and Records ......................... 13
7.9 Intentionally Omitted ................................. 14
7.10 Purchaser's Assignees ................................. 14
ARTICLE 8
PRORATIONS, DEPOSITS, COMMISSIONS
8.1 Prorations ............................................ 14
8.2 Intentionally Omitted ................................. 14
8.3 Closing Costs ......................................... 14
8.4 Final Adjustment After Closing ........................ 14
8.5 Intentionally Omitted ................................. 15
8.6 Commissions ........................................... 15
ARTICLE 9
REPRESENTATIONS AND WARRANTIES
9.1 Seller's Representations and Warranties ............... 15
9.2 Purchaser's Representations and Warranties ............ 16
9.3 Survival of Representations and Warranties ............ 17
ARTICLE 10
DEFAULT AND REMEDIES
10.1 Seller's Remedies ..................................... 17
10.2 Purchaser's Remedies .................................. 18
10.3 Attorneys' Fees ....................................... 18
10.4 Other Expenses ........................................ 18
ARTICLE 11
DISCLAIMERS, RELEASE AND INDEMNITY
11.1 Disclaimers By Seller ................................. 18
11.2 Sale "As Is, Where Is." ............................... 19
11.3 Seller Released from Liability ........................ 20
11.4 "Hazardous Materials" Defined ......................... 21
11.5 Intentionally Omitted ................................. 21
11.6 Survival .............................................. 21
ARTICLE 12
LEASE
12.1 Lease as a Condition Precedent ........................ 21
ARTICLE 13
MISCELLANEOUS
13.1 Parties Bound; Assignment ............................. 26
13.2 Headings .............................................. 26
13.3 Invalidity and Waiver ................................. 26
13.4 Governing Law ......................................... 26
13.5 Survival .............................................. 26
13.6 Entirety and Amendments ............................... 26
13.7 Time .................................................. 26
13.8 Confidentiality ....................................... 27
13.9 No Electronic Transactions ............................ 27
13.10 Notices ............................................... 27
13.11 Construction .......................................... 27
13.12 Calculation of Time Periods; Business Day ............. 28
13.13 Execution in Counterparts ............................. 28
13.14 No Recordation ........................................ 28
13.15 Further Assurances .................................... 28
13.16 No Third Party Beneficiary ............................ 28
13.17 Reporting Person ...................................... 28
13.18 Intentionally Omitted ................................. 28
PURCHASE AND SALE AGREEMENT
---------------------------
Xxxxxxxxxx Laboratories Headquarters Facility, Irving, Texas
This Purchase and Sale Agreement (this "Agreement") is made and entered
into by and between Purchaser and Seller.
RECITALS
--------
A. Defined terms are indicated by initial capital letters. Defined
terms shall have the meaning set forth herein, whether or not such terms are
used before or after the definitions are set forth.
B. Purchaser desires to purchase the Property and Seller desires to
sell the Property, all upon the terms and conditions set forth in this
Agreement.
NOW, THEREFORE, in consideration of the mutual terms, provisions,
covenants and agreements set forth herein, as well as the sums to be paid by
Purchaser to Seller, and for other good and valuable consideration, the
receipt and sufficiency of which are acknowledged, Purchaser and Seller
agree as follows:
ARTICLE 1
BASIC INFORMATION
-----------------
1.1 Certain Basic Terms
-------------------
The following defined terms shall have the meanings set forth
below:
1.1.1 Seller: XXXXXXXXXX LABORATORIES, INC, a Texas
corporation
1.1.2 Purchaser: RAINIER CAPITAL MANAGEMENT, L.P., a
Texas limited partnership
1.1.3 Purchase Price: $4,900,000.00
1.1.4 Xxxxxxx Money: $75,000.00 (the "Initial Xxxxxxx
Money"), including interest thereon,
to be deposited in accordance with
Section 3.1 below.
1.1.5 Title Company: Republic Title of Texas, Inc.
0000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx 00000-0000
Attn.: Xx Xxxxxx
Telephone number: (000) 000-0000
Facsimile number: (000) 000-0000
E-mail: xxxxxxx@xxxxxxxxxxxxx.xxx
1.1.6 Escrow Agent: Republic Title of Texas, Inc.
0000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx 00000-0000
Attn.: Xx Xxxxxx
Telephone number: (000) 000-0000
Facsimile number: (000) 000-0000
E-mail: xxxxxxx@xxxxxxxxxxxxx.xxx
1.1.7 Broker: Magellan Commercial Realty, Inc.
Xxxx Xxxxx
1.1.8 Co-Broker N/A
1.1.9 Intentionally Omitted Intentionally Omitted
1.1.10 Effective Date: That date which is the later to occur
of (i) the date on which this
Agreement is executed by the latter
to sign of Purchaser or Seller, as
indicated on the signature page of
this Agreement and (ii) the date
this Agreement is received and
acknowledged by the Escrow Agent.
If the execution date is left blank
by either Purchaser or Seller, the
Effective Date shall be the execution
date inserted by the other party.
1.1.11 Property Information The date which is seven (7) days
Delivery Date: after the Effective Date.
1.1.12 Title Commitment The date which is five (5) business
Delivery Date: days after the Effective Date.
1.1.13 Title and Survey The period ending fifteen (15) days
Review Period: after Purchaser's receipt of the
initial Title Commitment and the copy
of Seller's existing survey delivered
to Purchaser under Section 4.1.5, but
in any event not later than the
expiration of the Inspection Period.
1.1.14 Inspection Period: The period beginning on the Effective
Date and ending on that date which is
thirty (30) days following the
Effective Date.
1.1.15 Closing Date: That date which is thirty (30) days
following the expiration of the
Inspection Period. Notwithstanding
anything to the contrary contained
herein, Purchaser shall have the
right to extend the Closing Date by
an additional thirty (30) days by
furnishing Seller with written
notice of the exercise of such
extension right not later than ten
(10) days prior to the Closing Date,
and depositing the sum of $25,000.00
as additional xxxxxxx money (the
"Additional Xxxxxxx Money"), which
Additional Xxxxxxx Money shall be
applicable to the Purchase Price at
Closing
1.2 Closing Costs
-------------
Closing costs shall be allocated and paid as follows:
Cost Responsible Party
----------------------------------------------------- -----------------
Title Commitment required to be delivered pursuant Seller
to Section 5.1
----------------------------------------------------- -----------------
Premium for standard form Title Policy required to Seller
be delivered pursuant to Section 5.4
----------------------------------------------------- -----------------
Premium for any upgrade of Title Policy for extended Purchaser
or additional coverage and any endorsements to the
Title Policy desired by Purchaser, any inspection
fee charged by the Title Company, tax certificates,
municipal and utility lien certificates, and any
other Title Company charges
----------------------------------------------------- -----------------
Costs of Survey and/or any revisions, modifications Purchaser
or re-certifications thereto
----------------------------------------------------- -----------------
Costs for UCC Searches Purchaser
----------------------------------------------------- -----------------
Recording Fees Purchaser
----------------------------------------------------- -----------------
Any deed taxes, documentary stamps, transfer taxes, Purchaser
intangible taxes, mortgage taxes or other similar
taxes, fees or assessments
----------------------------------------------------- -----------------
Any escrow fee charged by Escrow Agent for holding Purchaser 1/2
the Xxxxxxx Money or conducting the Closing Seller 1/2
----------------------------------------------------- -----------------
Real Estate Sales Commission to Broker Seller
----------------------------------------------------- -----------------
All other closing costs, expenses, charges and fees, Purchaser
except that each party shall be responsible for the
payment of their respective attorneys' fees
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1.3 Notice Addresses:
-----------------
Purchaser: Rainier Copy to: Xxxxxxx X.
Capital Management, X.X. Xxxxxxx, Esq.
13760 Xxxx Road Xxxxxxx & Xxxxxxx, P.C.
Suite 800 00000 Xxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000 Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx Xxxx
Telephone: 000-000-0000 Telephone: 000-000-0000
Facsimile: 000-000-0000 Facsimile: 000-000-0000
E-mail: E-mail:
xxxxx@xxxxxxxxxxxxxx.xxx xxxxxxxx@xxxxxxxxxx.xxx
Seller: Xxxxxxxxxx Copy to: Xxxxxxx X.
Laboratories, Inc. Krywucki, Esq.
0000 Xxxxxx Xxxx Xxxx Xxxxxx Xxxxx Xxxx &
Xxxxxx, Xxxxx 00000 Xxxx P.C.
Attention: Xxxxxxx X. 0000 Xxxx Xxxxxx,
Xxxxxx Xxxxx 0000
Telephone: 000-000-0000 Xxxxxx, Xxxxx 00000
Facsimile: 000-000-0000 Telephone: 000-000-0000
E-mail: Facsimile: 000-000-0000
xxxxxxx@xxxxxxxxxxxxxx.xxx E-mail:
xxxxxxxxx@xxxxxx.xxx
ARTICLE 2
PROPERTY
--------
2.1 Property.
---------
Subject to the terms and conditions of this Agreement, Seller
agrees to sell to Purchaser, and Purchaser agrees to purchase from Seller,
the following property (collectively, the "Property"):
2.1.1 Real Property. The land described in A hereto (the "Land"),
together with all improvements located thereon ("Improvements"), all
right, title and interest of Seller, if any, in and to the rights,
benefits, privileges, easements, tenements, hereditaments, and
appurtenances thereon or in anywise appertaining thereto, and all
right, title, and interest of Seller, if any, in and to all strips
and gores and any land lying in the bed of any street, road or
alley, open or proposed, adjoining the Land (collectively, the "Real
Property").
2.1.2 Intentionally Omitted.
2.1.3 Intentionally Omitted.
2.1.4 Plans. All of Seller's right, title and interest, if
any, in the plans and specifications and other architectural and
engineering drawings for the Improvements, if any (to the extent
assignable) (collectively, the "Plans").
2.1.5 Intentionally Omitted.
2.1.6 Allocation of Purchase Price. Purchaser and Seller shall
agree to an allocation of the Purchase Price among the various
categories of Property as described in this Article 1 prior to the
Closing Date.
2.2 Intentionally Omitted.
----------------------
ARTICLE 3
XXXXXXX MONEY
-------------
3.1 Deposit and Investment of Xxxxxxx Money
---------------------------------------
Within three Business Days after the Effective Date, Purchaser
shall deposit the Initial Xxxxxxx Money with Escrow Agent. Escrow Agent
shall invest the Xxxxxxx Money, and if applicable, any Additional Xxxxxxx
Money, in government insured interest-bearing accounts satisfactory to
Purchaser (with all interest thereupon to accrue to Purchaser's benefit),
shall not commingle the Xxxxxxx Money with any funds of Escrow Agent or
others, and shall promptly provide Purchaser and Seller with confirmation
of the investments made. Such account shall have no penalty for early
withdrawal.
3.2 Independent Consideration
-------------------------
If Purchaser elects to terminate this Agreement for any reason
and is entitled to receive a return of the Xxxxxxx Money pursuant to the
terms hereof, the Escrow Agent shall first disburse to Seller One Hundred
and No/100 Dollars ($100.00) as independent consideration for Seller's
performance under this Agreement ("Independent Consideration"), which shall
be retained by Seller in all instances.
3.3 Form; Failure to Deposit
------------------------
The Xxxxxxx Money shall be in the form of a certified or
cashier's check or the wire transfer to Escrow Agent of immediately
available U.S. federal funds. If Purchaser fails to timely deposit any
portion of the Xxxxxxx Money within the time periods required, Seller may,
after providing Purchaser with written notice and a one (1) Business Day
cure period, terminate this Agreement by a second written notice to
Purchaser, in which event any Xxxxxxx Money that has previously been
deposited by Purchaser with Escrow Agent shall be immediately delivered to
Seller and thereafter the parties hereto shall have no further rights or
obligations hereunder, except for rights and obligations which, by their
terms, survive the termination hereof.
3.4 Disposition of Xxxxxxx Money
----------------------------
The Xxxxxxx Money, and, if applicable, any Additional Xxxxxxx
Money, shall be applied as a credit to the Purchase Price at Closing.
However, if Purchaser elects to terminate this Agreement prior to
the expiration of the Inspection Period pursuant to Section 4.3, Escrow
Agent shall pay the entire Xxxxxxx Money (less the Independent Consideration
and one-half of any escrow fees charged by Escrow Agent, but together with
any and all interest accrued thereupon) to Purchaser one (1) Business Day
following Escrow Agent's receipt of the timely Due Diligence Termination
Notice from Purchaser (as long as the current investment can be liquidated
and disbursed in one Business Day). No notice to Escrow Agent from Seller
shall be required for the release of the Xxxxxxx Money to Purchaser by
Escrow Agent if Purchaser terminates this Agreement pursuant to Section 4.3.
In the event of a termination of this Agreement by either Seller or
Purchaser for any reason other than pursuant to Section 4.3, Escrow Agent
is authorized to deliver the Xxxxxxx Money to the party hereto entitled to
same pursuant to the terms hereof on or before the tenth (10th) Business Day
following receipt by Escrow Agent and the non-terminating party of written
notice of such termination from the terminating party, unless the other
party hereto notifies Escrow Agent that it disputes the right of the other
party to receive the Xxxxxxx Money. In such event, Escrow Agent may
interplead the Xxxxxxx Money into a court of competent jurisdiction in the
county in which the Xxxxxxx Money has been deposited. All attorneys' fees
and costs and Escrow Agent's costs and expenses incurred in connection with
such interpleader shall be assessed against the party that is not awarded
the Xxxxxxx Money, or if the Xxxxxxx Money is distributed in part to both
parties, then in the inverse proportion of such distribution.
ARTICLE 4
DUE DILIGENCE
-------------
4.1 Due Diligence Materials To Be Delivered
---------------------------------------
Seller shall deliver to Purchaser the following (the "Property
Information") on or before the Property Information Delivery Date:
4.1.1 Intentionally Omitted.
4.1.2 Financial Information. A copy of property operating
statements and a summary of capital expenditures pertaining to the
Property for the last three (3) years or such lesser period as Seller
has owned the Property ("Operating Statements");
4.1.3 Environmental Reports. A copy of any environmental
reports or site assessments related to the Property prepared for the
benefit of Seller;
4.1.4 Tax Statements. A copy of ad valorem tax statements
relating to the Property for the current tax period, together with (a)
a copy of a copy of paid real estate tax bills for the immediately
preceding three (3) years, (b) tax consultant correspondence, and (c)
and an explanation of any abatements or special tax reductions, if
applicable;
4.1.5 Title and Survey. A copy of Seller's most current
title insurance information and survey of the Property;
4.1.6 Service Contracts. A list, together with copies, of
all maintenance, service, construction, supply and equipment rental
contracts related to the operation, ownership or management of the Real
Property (the "Service Contracts"), if any;
4.1.7 Intentionally Omitted.
4.1.8 License Agreements. A list, together with copies,
of all agreements (other than the Lease) for the leasing or licensing
of rooftop space or equipment, telecommunications equipment, cable
access and other space, equipment and facilities that are located on or
within the Real Property and generate income to Seller as the owner of
the Real Property (the "License Agreements"), if any;
4.1.9 Intentionally Omitted.
4.1.10 Plans and Specifications; Construction Contracts;
Reports; Warranties. Building plans, specifications and material
warranties relating to the Property, as well as architectural,
engineering, and geotechnical reports;
4.1.11 Licenses, Permits and Certificates of Occupancy.
Licenses, permits and certificates of occupancy relating to the
Property; and
4.1.12 Miscellaneous Property Information. Soils and geology
reports, local property contact information, site plans, floor
plans, existing property condition/engineering reports, existing ADA
Report, existing O&M manual, deed restrictions (if applicable), zoning
compliance letters, certificates of occupancy/building permits, major
equipment/building component warranties, aerial photographs of the
Property, list of any pending litigation matters involving the
Property, evidence of property insurance and liability insurance, and
list of utility service account numbers and contacts, and any other
information, materials or reports regarding the Property reasonably
requested by Purchaser.
Seller's obligations to deliver the items listed in this Section
4.1 shall be limited to the extent such items are in the possession of
Seller or its property management company, or are reasonably available to
Seller.
4.2 Physical Due Diligence
----------------------
Commencing on the Effective Date and continuing until the
Closing, Purchaser shall have reasonable access to the Property at all
reasonable times during normal business hours, (but in any event within the
hours of 8:00 a.m. and 5:00 p.m. Monday through Friday), for the purpose of
conducting reasonably necessary tests, including surveys and architectural,
engineering, geotechnical and environmental inspections and tests, provided
that (a) Purchaser must give Seller's Chief Financial Officer two (2) full
Business Days' prior telephone or written notice of any such inspection
or test, and with respect to any intrusive inspection or test (i.e., core
sampling) must obtain Seller's prior written consent (which consent may not
be unreasonably withheld, conditioned or delayed), (b) prior to performing
any inspection or test, Purchaser must deliver a certificate of insurance
to Seller evidencing that Purchaser and its contractors, agents and
representatives have in place (and Purchaser and its contractors, agents and
representatives shall maintain during the pendency of this Agreement)
(1) commercial general liability insurance with limits of at least One
Million Dollars ($1,000,000) per occurrence and Two Million Dollars
($2,000,000) aggregate for bodily or personal injury or death, and (2)
property damage insurance in the amount of at least One Million Dollars
($1,000,000) all covering any accident arising in connection with the
presence of Purchaser, its contractors, agents and representatives on the
Property, and (c) all such tests shall be conducted by Purchaser in
compliance with Purchaser's responsibilities set forth in Section 4.8 below.
Purchaser shall bear the cost of all such inspections or tests. Subject
to the provisions of Section 4.6 hereof, Purchaser or Subject to the
provisions of Section 4.6 hereof, Purchaser or Purchaser's representatives
may communicate with any governmental authority for the sole purpose of
gathering information in connection with the transaction contemplated by
this Agreement; provided, however, Purchaser must contact Seller at least
five (5) full Business Days in advance by telephone to inform Seller of
Purchaser's intended communication with any governmental authority and to
allow Seller the opportunity to participate in such communication if Seller
desires. As used in this Section, "communicate" and "communication" shall
mean the initiation of, response to, or sharing or exchange of information,
knowledge or messages, whether by oral, written or electronic methods or
media, or by any other means.
4.3 Due Diligence/Termination Right
-------------------------------
Purchaser shall have through 5:00 pm (CST) on the last day of
the Inspection Period in which to (a) examine, inspect, and investigate the
Property Information (the "Property Documents") and the Property and,
in Purchaser's sole and absolute judgment and discretion, determine whether
the Property is acceptable to Purchaser, (b) obtain all necessary
internal approvals, and (c) satisfy all other contingencies of Purchaser.
Notwithstanding anything to the contrary in this Agreement, Purchaser may
terminate this Agreement for any reason or no reason by giving written
notice of termination to Seller and Escrow Agent (the "Due Diligence
Termination Notice") on or before 5:00 pm (CST) on the last day of the
Inspection Period. If Purchaser does not give a Due Diligence Termination
Notice, this Agreement shall continue in full force and effect, Purchaser
shall be deemed to have waived its right to terminate this Agreement
pursuant to this Section 4.3 and Purchaser shall be deemed to have
acknowledged that it has received or had access to all Property Documents
and conducted all inspections and tests of the Property that it considers
important.
4.4 Return of Documents and Reports
-------------------------------
As additional consideration for the transaction contemplated
herein, Purchaser shall provide to Seller, promptly after termination of
this Agreement by Purchaser other than as a result of Seller's default,
copies of all third party reports, investigations and studies, other than
economic analyses (collectively, the "Reports" and, individually, a
"Report") prepared for Purchaser in connection with its due diligence review
of the Property, including, without limitation, any and all Reports
involving structural or geological conditions, environmental, hazardous
waste or hazardous substances contamination of the Property, if any, which
Reports shall be addressed to both Seller and Purchaser at no cost to
Seller. The Reports shall be delivered to Seller without any representation
or warranty as to the completeness or accuracy of the Reports or any other
matter relating thereto. Purchaser's obligation to deliver the Property
Documents and the Reports to Seller shall survive the termination of this
Agreement.
4.5 Service Contracts
-----------------
Seller agrees that, to the extent any Service Contracts will
remain in effect from and after the date of Closing, Seller shall send
written notice within five (5) days after Closing to the other parties to
such contracts informing such parties of Purchaser's interest as owner of
the Property and landlord under the Lease (as defined below).
4.6 Proprietary Information; Confidentiality
----------------------------------------
Purchaser acknowledges that the Property Documents are
proprietary and confidential and have been and will be delivered to
Purchaser solely to assist Purchaser in determining the feasibility of
purchasing the Property, obtaining financing for the acquisition of the
Property, and marketing the Property to potential investors. Purchaser
shall not use the Property Documents for any purpose other than as set forth
in the preceding sentence. Purchaser shall not divulge the contents of the
Property Documents and other information except in strict accordance with
the confidentiality standards set forth in this Section 4.6. In permitting
Purchaser to review the Property Documents or any other information, Seller
has not waived any privilege or claim of confidentiality with respect
thereto, and no third party benefits or relationships of any kind, either
express or implied, have been offered, intended or created. Purchaser's
obligations under this Section 4.6 shall survive the termination of this
Agreement.
4.7 No Representation or Warranty by Seller
---------------------------------------
Purchaser acknowledges that, except as expressly set forth in
this Agreement, Seller has not made and does not make any warranty or
representation regarding the truth, accuracy or completeness of the Property
Documents or the source(s) thereof. Purchaser further acknowledges that
some if not all of the Property Documents were prepared by third parties
other than Seller. Seller expressly disclaims any and all liability for
representations or warranties, express or implied, statements of fact and
other matters contained in such information, or for omissions from the
Property Documents, or in any other written or oral communications
transmitted or made available to Purchaser, except as expressly set forth in
this Agreement. Purchaser shall rely solely upon its own investigation with
respect to the Property, including, without limitation, the Property's
physical, environmental or economic condition, compliance or lack of
compliance with any ordinance, order, permit or regulation or any other
attribute or matter relating thereto, except as expressly set forth in this
Agreement. Seller has not undertaken any independent investigation as to
the truth, accuracy or completeness of the Property Documents and are
providing the Property Documents solely as an accommodation to Purchaser,
except as expressly set forth in this Agreement.
4.8 Purchaser's Responsibilities.
-----------------------------
In conducting any inspections, investigations or tests of
the Property and/or Property Documents, Purchaser and its agents and
representatives shall: (a) not disturb the business of Seller upon
the Property or interfere with Seller's use of the Property; (b) not
interfere with the operation and maintenance of the Property; (c) not
damage any part of the Property or any personal property owned or held
by Seller or any third party; (d) not injure or otherwise cause bodily harm
to Seller or its agents, guests, invitees, contractors and employees;
(e) comply with all applicable laws; (f) promptly pay when due the costs
of all tests, investigations, and examinations done with regard to the
Property; (g) not permit any liens to attach to the Real Property by reason
of the exercise of its rights hereunder; (h) repair any damage to the Real
Property resulting from any such inspection or tests; and (i) not reveal or
disclose prior to Closing any information obtained during the Inspection
Period concerning the Property and the Property Documents to anyone except
in accordance with the confidentiality standards set forth in Section
4.6 above, or except as may be otherwise required by law. Purchaser's
obligations under this Section 4.8 shall survive the termination of this
Agreement.
4.9 Purchaser's Agreement to Indemnify
----------------------------------
Purchaser hereby agrees to indemnify, defend and hold Seller
harmless from and against any and all liens, claims, causes of action,
damages, liabilities and expenses (including reasonable attorneys' fees)
arising out of Purchaser's inspections or tests permitted under this
Agreement or any violation of the provisions of Sections 4.2, 4.6 and 4.8;
provided, however, the indemnity shall not extend to protect Seller from any
pre-existing liabilities for matters merely discovered by Purchaser (i.e.,
latent environmental contamination) so long as Purchaser's actions do not
aggravate any pre-existing liability of Seller. Purchaser's obligations
under this Section 4.9 shall survive the termination of this Agreement and
shall survive the Closing.
4.10 Environmental Studies
---------------------
As additional consideration for the transaction contemplated in
this Agreement, Purchaser shall promptly after termination of this Agreement
by Purchaser other than as a result of Seller's default provide to Seller
copies of any and all reports, tests or studies involving contamination of
or other environmental concerns relating to the Property; provided, however,
Purchaser shall have no obligation to cause any such tests or studies to be
performed on the Property. Seller acknowledges that Purchaser has not made
and does not make any warranty or representation regarding the truth or
accuracy of any such studies or reports. Notwithstanding Section 4.9
above, Purchaser shall have no liability or culpability of any nature as a
result of having provided such information to Seller or as a result of
Seller's reliance thereon or arising out of the fact that Purchaser merely
conducted such tests or studies, so long as Purchaser's actions do not
aggravate any pre-existing liability of Seller.
ARTICLE 5
TITLE AND SURVEY
----------------
5.1 Title Commitment
----------------
Seller shall cause to be prepared and delivered to Purchaser on
or before the Title Commitment Delivery Date: (a) current commitment for
title insurance or preliminary title report (the "Title Commitment") issued
by the Title Company, in the amount of the Purchase Price and on a Texas
T-1 Form commitment, with Purchaser as the proposed insured, and (b) copies
of all documents of record referred to in the Title Commitment as exceptions
to title to the Property.
5.2 Updated Survey
--------------
Purchaser may elect to obtain a new survey or revise, modify,
or re-certify an existing survey ("Survey") as necessary in order for the
Title Company to delete the survey exception from the Title Policy or to
otherwise satisfy Purchaser's objectives.
5.3 Title Review
------------
During the Title and Survey Review Period, Purchaser shall
review title to the Property as disclosed by the Title Commitment and the
Survey. Seller shall have no obligation to cure title objections except
financing, mechanic's, materialman's and similar liens of an ascertainable
amount created by, under or through Seller, which liens Seller shall cause
to be released at or prior to Closing (with Seller having the right to apply
the Purchase Price or a portion thereof for such purpose), and Seller shall
deliver the Property free and clear of any such liens. Seller further
agrees to remove any exceptions or encumbrances to title which are
voluntarily created by, under or through Seller after the Effective Date
without Purchaser's consent (which consent may be withheld in Purchaser's
sole and absolute discretion). The term "Permitted Exceptions" shall mean:
the specific exceptions (excluding exceptions that are part of the
promulgated title insurance form) in the Title Commitment that the Title
Company has not agreed to remove from the Title Commitment as of the end of
the Title and Survey Review Period and that Seller is not required to remove
as provided above; matters created by, through or under Purchaser; items
shown on the Survey which have not been removed as of the end of the
Inspection Period (or if Purchaser does not obtain a Survey, all matters
that a current, accurate survey of the Property would show); real estate
taxes not yet due and payable; and rights of Seller and Purchaser under the
Lease (hereinafter defined) to be executed by Seller, as tenant and
Purchaser, as landlord.
5.4 Delivery of Title Policy at Closing
-----------------------------------
In the event that the Title Company does not issue at Closing,
or unconditionally commit at Closing to issue, to Purchaser, an owner's
title policy in accordance with the Title Commitment, insuring Purchaser's
fee simple title to the Real Property in the amount of the Purchase Price,
subject only to the standard exceptions and exclusions from coverage
contained in such policy and the Permitted Exceptions (the "Title Policy"),
Purchaser shall have the right to terminate this Agreement, in which case
the Xxxxxxx Money, and if applicable, any Additional Xxxxxxx Money, shall be
immediately returned to Purchaser (together with any and all accrued
interest thereupon) and the parties hereto shall have no further rights or
obligations, other than those that by their terms survive the termination of
this Agreement.
5.5 Waiver of Requirement to Deliver Title Policy.
---------------------------------------------
Purchaser may waive the requirement for delivery of the Title
Policy as provided in Section 5.4, and, in lieu thereof, receive a credit
in the amount of the premium for the Title Policy to be applied against the
cost of the premium of an owner's title policy to be issued in a subsequent
transaction.
ARTICLE 6
OPERATIONS AND RISK OF LOSS
---------------------------
6.1 Ongoing Operations. From the Effective Date through Closing:
-------------------
6.1.1 Service Contracts and License Agreements. Seller will
perform its material obligations under any Service Contracts and
License Agreements then in effect.
6.1.2 New Contracts. Except as provided in Section 6.1.4,
Seller will not enter into any contract that will be an obligation
binding on the Property or Purchaser subsequent to the Closing, except
contracts entered into in the ordinary course of business that are
terminable without cause and without the payment of any termination
penalty on not more than 30 days' prior notice.
6.1.3 Maintenance of Improvements; Removal of Personal
Property. Subject to Sections 6.2 and 6.3, Seller shall maintain all
Improvements substantially in their present condition (ordinary wear
and tear and casualty excepted) and in a manner consistent with
Seller's maintenance of the Improvements during Seller's period of
ownership.
6.1.4 Leasing; License Agreements. Seller will not amend or
terminate any existing License Agreement or enter into any new lease
(with the exception of the Lease between Seller and Purchaser, and with
the exception of leases which do not involve any possessory use of
the Property) or new License Agreement without obtaining Purchaser's
express prior written approval (which approval may be granted or
withheld in Purchaser's sole and absolute discretion).
6.2 Damage.
-------
If prior to Closing the Property is damaged by fire or other
casualty, Seller shall estimate the cost to repair and the time required
to complete repairs and will provide Purchaser written notice of Seller's
estimation (the "Casualty Notice") as soon as reasonably possible after the
occurrence of the casualty.
6.2.1 Material. In the event of any Material Damage to or
destruction of the Property or any portion thereof prior to Closing,
either Seller or Purchaser may, at its option, terminate this
Agreement by delivering written notice to the other on or before the
expiration of 30 days after the date Seller delivers the Casualty
Notice to Purchaser (and if necessary, the Closing Date shall be
extended to give the parties the full thirty (30) day period to make
such election and to obtain insurance settlement agreements with
Seller's insurers). Upon any such termination, the Xxxxxxx Money, and
if applicable, the Additional Xxxxxxx Money (together with any and all
interest accrued thereupon), shall be returned to Purchaser and the
parties hereto shall have no further rights or obligations hereunder,
other than those that by their terms survive the termination of this
Agreement. If neither Seller nor Purchaser so terminates this Agreement
within said thirty (30) day period, then the parties shall be deemed to
have waived their respective right to terminate under this Section
6.2.1 and the parties shall proceed under this Agreement and close on
schedule (subject to extension of Closing as provided above), and as
of Closing Seller shall assign to Purchaser, without representation
or warranty by or recourse against Seller, all of Seller's rights in
and to any resulting insurance proceeds due Seller as a result of such
damage or destruction and Purchaser shall assume full responsibility
for all needed repairs, and Purchaser shall receive a credit at Closing
for any deductible amount under such insurance policies (but the amount
of the deductible plus insurance proceeds shall not exceed the lesser
of (a) the cost of repair or (b) the Purchase Price). For the
purposes of this Agreement, "Material Damage" and "Materially Damaged"
means damage which, in Seller's reasonable estimation, the cost to
repair exceeds $250,000.
6.2.2 Not Material. If the Property is not Materially Damaged,
then neither Purchaser nor Seller shall have the right to terminate
this Agreement, and Seller shall, at its option, either (a) repair the
damage before the Closing in a manner reasonably satisfactory to
Purchaser (and if necessary, Seller may extend the Closing Date up to
thirty (30) days to complete such repairs), or (b)credit Purchaser at
Closing for the reasonable cost to complete the repair as mutually
agreed by Seller and Purchaser (in which case Seller shall retain all
insurance proceeds and Purchaser shall assume full responsibility for
all needed repairs).
6.3 Condemnation.
-------------
If proceedings in eminent domain are instituted with respect
to the Property or any portion thereof, Purchaser may, at its option, by
written notice to Seller given within fifteen (15) days after Seller
notifies Purchaser of such proceedings (and if necessary the Closing Date
shall be automatically extended to give Purchaser the full fifteen (15) day
period to make such election), either: (a) terminate this Agreement, in
which case the Xxxxxxx Money, and if applicable, the Additional Xxxxxxx
Money (together with any and all interest accrued thereupon), shall be
immediately returned to Purchaser and the parties hereto shall have no
further rights or obligations, other than those that by their terms survive
the termination of this Agreement, or (b) proceed under this Agreement, in
which event Seller shall, at the Closing, assign to Purchaser its entire
right, title and interest in and to any condemnation award, and Purchaser
shall have the sole right after the Closing to negotiate and otherwise deal
with the condemning authority in respect of such matter. If Purchaser does
not give Seller written notice of its election within the time required
above, then Purchaser shall be deemed to have elected option (b) above.
ARTICLE 7
CLOSING
-------
7.1 Closing.
--------
The consummation of the transaction contemplated herein
("Closing") shall occur on the Closing Date at the offices of Escrow Agent
(or such other location as may be mutually agreed upon by Seller and
Purchaser). Funds shall be deposited into and held by Escrow Agent in a
closing escrow account with a bank satisfactory to Purchaser and Seller.
Upon satisfaction or completion of all closing conditions and deliveries,
the parties shall direct Escrow Agent to immediately record and deliver
the closing documents to the appropriate parties and make disbursements
according to the closing statements executed by Seller and Purchaser.
7.2 Conditions to Parties' Obligation to Close.
-------------------------------------------
In addition to all other conditions set forth herein, the
obligation of Seller, on the one hand, and Purchaser, on the other hand, to
consummate the transactions contemplated hereunder are conditioned upon the
following:
7.2.1 Representations and Warranties. The other party's
representations and warranties contained herein shall be true and
correct in all material respects as of the Effective Date and the
Closing Date, except for representations and warranties made as of,
or limited by, a specific date, which will be true and correct in all
material respects as of the specified date or as limited by the
specified date;
7.2.2 Deliveries. As of the Closing Date, the other party
shall have tendered all deliveries to be made at Closing;
7.2.3 Actions, Suits, etc. There shall exist no pending
or threatened actions, suits, arbitrations, claims, attachments,
proceedings, assignments for the benefit of creditors, insolvency,
bankruptcy, reorganization or other proceedings, against the other
party that would materially and adversely affect that party's ability
to perform its obligations under this Agreement; and
7.2.4 Execution of the Lease. Seller and Purchaser shall
have agreed on the final form of the Lease (hereinafter defined) and
delivered it for execution at Closing.
So long as a party is not in default hereunder, if any condition to
such party's obligation to proceed with the Closing hereunder has not been
satisfied as of the Closing Date (or such earlier date as is provided
herein), subject to any applicable notice and cure periods provided in
Sections 10.1 and 10.2, such party may, in its sole discretion, terminate
this Agreement by delivering written notice to the other party on or
before the Closing Date (or such earlier date as is provided herein), or
elect to close (or to permit any such earlier termination deadline to pass)
notwithstanding the non-satisfaction of such condition, in which event
such party shall be deemed to have waived any such condition, or elect to
extend the Closing Date until five Business Days after such condition has
been satisfied. In the event such party elects to close (or to permit
any such earlier termination deadline to pass), notwithstanding the
non-satisfaction of such condition, said party shall be deemed to have
waived said condition, and there shall be no liability on the part of any
other party hereto for breaches of representations and warranties of which
the party electing to close had knowledge at the Closing.
7.3 Seller's Deliveries in Escrow.
------------------------------
As of or prior to the Closing Date, Seller shall deliver in
escrow to Escrow Agent the following:
7.3.1 Deed. A special warranty deed in substantially the
form of Exhibit B hereto in form acceptable for recordation under the
law of the State of Texas and restating the provisions of Article 11
hereof and including a list of Permitted Exceptions to which the
conveyance shall be subject, executed and acknowledged by Seller,
conveying to Purchaser or to Purchaser's nominee(s) Seller's interest
in the Real Property (the "Deed");
7.3.2 Intentionally Omitted.
7.3.3 Conveyancing or Transfer Tax Forms or Returns. Such
conveyancing or transfer tax forms or returns, if any, as are required
to be delivered or signed by Seller by applicable state and local law
in connection with the conveyance of the Real Property;
7.3.4 FIRPTA. A Foreign Investment in Real Property Tax Act
affidavit in the form of Exhibit D hereto executed by Seller;
7.3.5 Lease. A counterpart of the Lease executed and
acknowledged by Seller, as tenant;
7.3.6 Authority. Evidence of the existence, organization
and authority of Seller and of the authority of the persons executing
documents on behalf of Seller reasonably satisfactory to the
underwriter for the Title Policy; and
7.3.7 Additional Documents. Any additional documents that
Purchaser, Escrow Agent or the Title Company may reasonably require
for the proper consummation of the transaction contemplated by this
Agreement (provided, however, no such additional document shall expand
any obligation, covenant, representation or warranty of Seller or
result in any new or additional obligation, covenant, representation
or warranty of Seller under this Agreement beyond those expressly set
forth in this Agreement).
7.4 Purchaser's Deliveries in Escrow.
---------------------------------
As of or prior to the Closing Date, Purchaser shall deliver in
escrow to Escrow Agent the following:
7.4.1 Intentionally Omitted.
7.4.2 Conveyancing or Transfer Tax Forms or Returns. Such
conveyancing or transfer tax forms or returns, if any, as are required
to be delivered or signed by Purchaser by applicable state and local
law in connection with the conveyance of the Real Property;
7.4.3 Lease. A counterpart of the Lease executed and
acknowledged by Purchaser, as landlord;
7.4.4 Authority. Evidence of the existence, organization and
authority of Purchaser and of the authority of the persons executing
documents on behalf of Purchaser reasonably satisfactory to the
underwriter for the Title Policy; and
7.4.5 Additional Documents. Any additional documents that
Seller, Escrow Agent or the Title Company may reasonably require for
the proper consummation of the transaction contemplated by this
Agreement (provided, however, no such additional document shall expand
any obligation, covenant, representation or warranty of Purchaser or
result in any new or additional obligation, covenant, representation or
warranty of Purchaser under this Agreement beyond those expressly set
forth in this Agreement).
7.5 Closing Statements.
-------------------
As of or prior to the Closing Date, Seller and Purchaser shall
deposit with Escrow Agent executed closing statements consistent with this
Agreement in the form required by Escrow Agent.
7.6 Purchase Price.
---------------
On the Closing Date, Purchaser shall deliver to Escrow Agent
the Purchase Price, less the Xxxxxxx Money, and if applicable, the
Additional Xxxxxxx Money, that is applied to the Purchase Price, plus or
minus applicable prorations, in immediate, same-day U.S. federal funds wired
for credit into Escrow Agent's escrow account, which funds must be delivered
in a manner to permit Escrow Agent to deliver good funds to Seller or
its designee on the Closing Date (and, if requested by Seller, by wire
transfer); in the event that Escrow Agent is unable to deliver good funds to
Seller or its designee on the Closing Date, then the closing statements and
related prorations will be revised as necessary.
Notwithstanding anything to the contrary contained herein, Seller
understands that Purchaser may acquire the Property utilizing a tenant in
common ownership structure in connection with a transaction under Section
1031 of the Internal Revenue Code. In order to accommodate the investors in
such 1031 transaction, Purchaser reserves the right to increase the Purchase
Price of the Property to include certain syndication and acquisition costs
relating to the 1031 transaction, and Seller shall approve such increase in
the Purchase Price provided that the net proceeds to Seller are unchanged,
and provided further, that the net amount of sales proceeds due to the
Seller and all costs born by the Seller shall be based on the Purchase Price
as originally set forth herein. In the event Purchaser determines to close
this Agreement as part of a like kind exchange in accordance with Internal
Revenue Code Section 1031, then Seller agrees to reasonably cooperate with
Seller in so doing so long as Seller incurs no cost, expense, delay or
liability in connection with the same.
7.7 Possession.
-----------
Seller shall deliver possession of the Property to Purchaser at
the Closing subject only to the Permitted Exceptions.
7.8 Delivery of Books and Records.
------------------------------
After the Closing, Seller shall deliver to Purchaser's property
manager, to the extent in Seller's or its property manager's possession
or control: copies of any License Agreements and Service Contracts;
maintenance records and warranties; plans and specifications; licenses,
permits and certificates of occupancy.
7.9 Intentionally Omitted.
----------------------
7.10 Purchaser's Assignees.
----------------------
The Purchaser may convey part or all of its interest in this
Agreement and/or the Property to assignees prior to or simultaneously with
the closing of the purchase of the Property under this Agreement. Seller
agrees to cooperate with Purchaser in connection with such simultaneous
conveyances by executing, delivering and accepting documents directly from
Purchaser's assignees as reasonably requested by Purchaser; provided that
Seller shall incur no additional cost or liability as a result thereof and
Purchaser shall fully indemnify Seller for any additional costs or
liabilities resulting therefrom and Purchaser is not released from any
liability or obligation under this Agreement. Purchaser agrees to give
Seller notice of any such conveyance promptly following the effective date
of the same.
ARTICLE 8
PRORATIONS, DEPOSITS, COMMISSIONS
---------------------------------
8.1 Prorations.
-----------
At Closing, if and to the extent Purchaser's lender may
require, the following items shall be prorated as of the Closing Date with
all items of income and expense for the Property being borne by Purchaser
from and after (and including) the Closing Date: Tenant Receivables
(defined below) and other income and rents that have been collected by
Seller as of Closing; fees and assessments; real and personal ad valorem
taxes ("Taxes"); and any assessments by private covenant for the
then-current calendar year of Closing. Specifically, the following shall
apply to such prorations and to post-Closing collections of Tenant
Receivables:
8.1.1 Taxes. If Taxes for the year of Closing are not known
or cannot be reasonably estimated, Taxes shall be prorated based on
Taxes for the year prior to Closing. Any additional Taxes relating to
the year of Closing or prior years arising out of a change in the use
of the Real Property or a change in ownership shall be the sole
liability of Seller and paid by Seller when due and payable, and Seller
shall indemnify Purchaser from and against any and all such Taxes,
which indemnification obligation shall survive the Closing.
8.1.2 Intentionally Omitted.
8.1.3 Intentionally Omitted.
Notwithstanding anything to the contrary contained herein, at the
option of Purchaser, any item, cost or expense, which shall remain the
obligation of Seller, as tenant under the Lease (hereinafter defined), shall
not be prorated as of the Closing Date, but rather shall remain the
obligation of Seller pursuant to the Lease, and Purchaser shall not have any
liability whatsoever therefor.
8.2 Intentionally Omitted.
----------------------
8.3 Closing Costs.
--------------
Closing costs shall be allocated between Seller and Purchaser
in accordance with Section 1.2.
8.4 Final Adjustment After Closing.
-------------------------------
If final bills are not available or cannot be issued prior to
Closing for any item being prorated under Section 8.1, then Purchaser and
Seller agree to allocate such items on a fair and equitable basis as soon as
such bills are available, final adjustment to be made as soon as reasonably
possible after the Closing. Payments in connection with the final
adjustment shall be due within 30 days of written notice. All such rights
and obligations shall survive the Closing.
8.5 Intentionally Omitted.
----------------------
8.6 Commissions.
------------
Seller and Purchaser each hereby agrees and acknowledges that
Broker represents Seller in connection with this Agreement and that there is
no other broker or co-broker involved in this transaction. Seller and
Purchaser each represent and warrant to the other that no real estate
brokerage commission is payable to any person or entity in connection with
the transaction contemplated hereby except for a commission payable to the
Broker by the Seller under a separate agreement by and among Broker and
Seller and for which Purchaser shall have no liability. Seller and
Purchaser each agree and do hereby indemnify and hold the other harmless
against the payment of any commission to any other person or entity claiming
by, through or under Seller or Purchaser, as applicable. This
indemnification shall extend to any and all claims, liabilities, costs and
expenses (including reasonable attorneys' fees and litigation costs) arising
as a result of such claims and shall survive the Closing.
ARTICLE 9
REPRESENTATIONS AND WARRANTIES
------------------------------
9.1 Seller's Representations and Warranties.
----------------------------------------
Seller represents and warrants to Purchaser that:
9.1.1 Organization and Authority. Seller has been duly
organized, is validly existing, and is in good standing in the state in
which it was formed. Seller has the full right and authority and has
obtained any and all consents required to enter into this Agreement and
to consummate or cause to be consummated the transactions contemplated
hereby. This Agreement has been, and all of the documents to be
delivered by Seller at the Closing will be, authorized and executed and
constitute, or will constitute, as appropriate, the valid and binding
obligation of Seller, enforceable in accordance with their terms.
9.1.2 Conflicts and Pending Actions. There is no agreement
to which Seller is a party or, to Seller's knowledge, that is binding
on Seller which is in conflict with this Agreement. To Seller's
knowledge, there is no action or proceeding pending or threatened
against Seller or relating to the Property, which challenges or impairs
Seller's ability to execute or perform its obligations under this
Agreement.
9.1.3 No Leases, Licenses or other Property Rights. Except
as otherwise expressly disclosed by Seller in this Agreement, the
Property is not subject to any leases, licenses, right of first
refusal, options to lease, or options to purchase.
9.1.4 Service Contracts and License Agreements. To Seller's
knowledge, there are no Service Contracts or License Agreements
affecting the Property with the exception of those Service Contracts
and/or License Agreements listed below in this Section 9.1.4 (the
"Existing Service Contracts and License Agreements"), with it being
understood and agreed that Seller shall indemnify and hold Purchaser
harmless from and against any and all losses, costs, liabilities,
damages or claims (including reasonable attorneys' fees) arising out or
under the Existing Service Contracts and License Agreements, and such
indemnity shall survive the Closing during the Survival Period
(hereinafter defined), and, notwithstanding anything to the contrary
contained herein, after the Survival Period.
Service Contracts and License Agreements
----------------------------------------
---------------------------------------------------------------------------
Company Name Type of Agreement Service Provided
---------------------------------------------------------------------------
United Elevator Co., Inc. Service Agreement Service Elevator
---------------------------------------------------------------------------
Eco-Safe Industrial-Commercial Pest Control
Institutional Pest
Control Service
Agreement
---------------------------------------------------------------------------
UltraPure & Industrial Service Agreement Service RO/DI Water
Services Group, Dallas System
---------------------------------------------------------------------------
ADT Security Systems, Inc. Commercial Agreement Security System for
building
---------------------------------------------------------------------------
Linc Service Maintenance Agreement Service for Building
Environmental Systems
---------------------------------------------------------------------------
Xxxxxxx Commercial Lawn Landscape Maintenance
Maintenance, Inc. Agreement
---------------------------------------------------------------------------
9.1.5 Property Information. To Seller's knowledge, all other
Property Information, to be delivered to Purchaser pursuant to this
Agreement, will be correct and complete in all material respects as of
the date of its delivery.
9.1.6 Notices from Governmental Authorities. To Seller's
knowledge, Seller has not received from any governmental authority
written notice of any material violation of any laws applicable (or
alleged to be applicable) to the Real Property, or any part thereof,
that has not been corrected, except as may be reflected by the
Property Documents or otherwise disclosed in writing to Purchaser.
9.1.7 Hazardous Materials. To Seller's knowledge, the
Property is free from the presence of Hazardous Materials (as such
term is hereinafter defined)
9.2 Purchaser's Representations and Warranties.
-------------------------------------------
Purchaser represents and warrants to Seller that:
9.2.1 Organization and Authority. Purchaser has been duly
organized and is validly existing as a limited partnership in good
standing in the State of Texas and is qualified to do business in the
State of Texas. Purchaser has the full right and authority and has
obtained any and all consents required to enter into this Agreement
and to consummate or cause to be consummated the transactions
contemplated hereby. This Agreement has been, and all of the documents
to be delivered by Purchaser at the Closing will be, authorized and
properly executed and constitute, or will constitute, as appropriate,
the valid and binding obligation of Purchaser, enforceable in
accordance with their terms.
9.2.2 Conflicts and Pending Action. There is no agreement to
which Purchaser is a party or to Purchaser's knowledge binding on
Purchaser which is in conflict with this Agreement. There is no
action or proceeding pending or, to Purchaser's knowledge, threatened
against Purchaser which challenges or impairs Purchaser's ability to
execute or perform its obligations under this Agreement.
9.2.3 Prohibited Persons and Transactions. Purchaser
represents and warrants to Seller that Purchaser is currently in
compliance with and shall at all times during the term of this
Agreement (including any extension thereof) remain in compliance
with the regulations of the Office of Foreign Asset Control ("OFAC")
of the Department of the Treasury (including those named on OFAC's
Specially Designated and Blocked Persons List) and any statute,
executive order (including the September 24, 2001, Executive Order
Blocking Property and Prohibiting Transactions with Persons Who Commit,
Threaten to Commit, or Support Terrorism), or other governmental action
relating thereto.
9.3 Survival of Representations and Warranties.
-------------------------------------------
The representations and warranties set forth in this Article 9
are made as of the Effective Date and are remade as of the Closing Date and
shall not be deemed to be merged into or waived by the instruments of
Closing, but shall survive the Closing for a period of twelve (12) months
(the "Survival Period"); provided, however, that such representations and
warranties of original Purchaser and Seller shall automatically terminate
if prior to the Closing, Purchaser assigns this Agreement in violation of
Section 13.1. Terms such as "to Seller's knowledge," "to the best of
Seller's knowledge" or like phrases mean the actual present and conscious
awareness or knowledge of Xxxxxx X. Xxxxxxxxxx ("Seller's Representative"),
without any duty of inquiry or investigation; provided that so qualifying
Seller's knowledge shall in no event give rise to any personal liability on
the part of Seller's Representative, or any of them, or any other officer
or employee of Seller, on account of any breach of any representation or
warranty made by Seller herein. Seller represents that there is no other
officer, employee, agent or representative of Seller who is likely to have
information regarding the representations and warranties set forth in this
Article which would be superior to that of Seller's Representative. Said
terms do not include constructive knowledge, imputed knowledge, or knowledge
Seller or such persons do not have but could have obtained through further
investigation or inquiry. No broker, agent, or party other than Seller is
authorized to make any representation or warranty for or on behalf of
Seller. Each party shall have the right to bring an action against the
other on the breach of a representation or warranty or covenant hereunder or
in the documents delivered by Seller at the Closing, but only on the
following conditions: (1) the party bringing the action for breach first
learns of the breach after Closing and gives written notice of such breach
to the other party before the end of the Survival Period and files such
action on or before the first day following the second anniversary of the
Closing Date, (2) neither party shall have the right to bring a cause of
action for a breach of a representation or warranty or covenant unless the
damage to such party on account of such breach (individually or when
combined with damages from other breaches) equals or exceeds $5,000, and
then only to the extent of such excess, and (3) the maximum amount of
damages recoverable in such an action shall be $1,225,000.00 and in
no event shall special, exemplary, consequential or punitive damages be
recoverable in any such action. Neither party shall have any liability
after Closing for the breach of a representation or warranty or covenant
hereunder of which the other party hereto had knowledge as of Closing.
Notwithstanding any other provision of this Agreement, any agreement
contemplated by this Agreement, or any rights which Purchaser might
otherwise have at law, equity, or by statute, whether based on contract or
some other claim, Purchaser agrees that any liability of Seller to Purchaser
will be limited to an amount equal to the Purchase Price. The provisions of
this Section 9.3 shall survive the Closing. Any breach of a representation
or warranty or covenant that occurs prior to Closing shall be governed by
Article 10.
ARTICLE 10
DEFAULT AND REMEDIES
--------------------
10.1 Seller's Remedies.
------------------
If Purchaser fails to consummate the purchase of the Property
pursuant to this Agreement or otherwise defaults on its obligations
hereunder at or prior to Closing for any reason except failure by Seller to
perform hereunder, or if prior to Closing any one or more of Purchaser's
representations or warranties are breached in any material respect, and such
default or breach is not cured by the earlier of the fifth (5th) Business
Day after written notice thereof from Seller or the Closing Date (except no
notice or cure period shall apply if Purchaser fails to consummate the
purchase of the Property hereunder), Seller shall be entitled, as its sole
remedy (except as provided in Sections 4.9, 8.6, 10.3 and 10.4 hereof), to
terminate this Agreement and recover the Xxxxxxx Money as liquidated damages
and not as penalty, in full satisfaction of claims against Purchaser
hereunder. Seller and Purchaser agree that Seller's damages resulting from
Purchaser's default are difficult, if not impossible, to determine and the
Xxxxxxx Money is a fair estimate of those damages which has been agreed to
in an effort to cause the amount of such damages to be certain. If Closing
is consummated, Seller shall have all remedies available at law or in equity
in the event Purchaser fails to perform any obligation of Purchaser under
this Agreement required to be performed after Closing.
10.2 Purchaser's Remedies.
---------------------
If Seller fails to consummate the sale of the Property pursuant
to this Agreement or otherwise defaults on its obligations hereunder at or
prior to Closing for any reason except failure by Purchaser to perform
hereunder, or if prior to Closing any one or more of Seller's representat-
ions or warranties are breached in any material respect, and such default or
breach is not cured by the earlier of the fifth (5th) Business Day after
written notice thereof from Purchaser or the Closing Date (Purchaser hereby
agreeing to give such written notice to Seller within five (5) Business Days
after Purchaser first learns of any such default or breach by Seller, except
no notice or cure period shall apply if Seller fails to consummate the sale
of the Property hereunder), Purchaser shall elect, as its sole and exclusive
remedy, either to (a) terminate this Agreement by giving Seller timely
written notice of such election prior to or at Closing and recover the
Xxxxxxx Money, and, if Seller's default was intentional, receive from Seller
Purchaser's actual, out-of-pocket expenses incurred in connection with the
transaction contemplated by this Agreement, up to a maximum of $85,000.00,
together with such other actual damages incurred by Purchaser, (b) enforce
specific performance to consummate the sale of the Property hereunder,
or (c) waive said failure or breach and proceed to Closing without any
reduction in the Purchase Price. Notwithstanding anything herein to the
contrary, Purchaser shall be deemed to have elected to terminate this
Agreement if Purchaser fails to deliver to Seller written notice of its
intent to file a claim or assert a cause of action for specific performance
against Seller on or before twenty (20) Business Days following the
scheduled Closing Date or, having given such notice, fails to file a lawsuit
asserting such claim or cause of action in the county in which the Property
is located within six (6) months following the scheduled Closing Date.
Purchaser's remedies shall be limited to those described in this Section
10.2 and Sections 10.3 and 10.4 hereof. EXCEPT AS OTHERWISE PROVIDED, IN NO
EVENT SHALL SELLER'S DIRECT OR INDIRECT PARTNERS, SHAREHOLDERS, OWNERS OR
AFFILIATES, ANY OFFICER, DIRECTOR, EMPLOYEE OR AGENT OF THE FOREGOING, OR
ANY AFFILIATE OR CONTROLLING PERSON THEREOF HAVE ANY LIABILITY FOR ANY
CLAIM, CAUSE OF ACTION OR OTHER LIABILITY ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE PROPERTY, WHETHER BASED ON CONTRACT, COMMON LAW, STATUTE,
EQUITY OR OTHERWISE. THE FOREGOING EXEMPTION FROM LIABILITY SHALL NOT APPLY
IN THE CASE OF TRANSFEREE LIABILITY IN THE EVENT OF SELLER'S LIQUIDATION,
DISSOLUTION OR OTHER EVENT RESULTING IN THE TRANSFER OF SUBSTANTIALLY ALL OF
SELLER'S ASSETS OR THE TERMINATION OF SELLER'S LEGAL EXISTENCE.
10.3 Attorneys' Fees.
----------------
In the event either party hereto employs an attorney in
connection with claims by one party against the other arising from the
operation of this Agreement, the non-prevailing party shall pay the
prevailing party all reasonable fees and expenses, including attorneys'
fees, incurred in connection with such claims.
10.4 Other Expenses.
---------------
If this Agreement is terminated due to the default of a party,
then the defaulting party shall pay any fees or charges due to Escrow Agent
for holding the Xxxxxxx Money as well as any escrow cancellation fees or
charges and any fees or charges due to the Title Company for preparation
and/or cancellation of the Title Commitment.
ARTICLE 11
DISCLAIMERS, RELEASE AND INDEMNITY
----------------------------------
11.1 Disclaimers By Seller.
----------------------
11.1.1 Asbestos Disclosure. The Building was constructed
prior to January 1, 1981. Under the Occupational Exposure to Asbestos
Rule (the "Rule") [59 Fed.Reg. 40962 (Aug. 10, 1994)] promulgated by
the U.S. Occupational Health and Safety Administration ("OSHA") every
building constructed prior to 1981 is presumed to have asbestos-
containing materials ("ACM") in the building. Seller obtained a Phase
I Environmental Site Assessment with respect to the Improvements
prepared by Enercon Services, Inc., of Dallas, Texas dated May 20, 2003
("Environmental Report") indicating that, except as disclosed in the
Environmental Report, there appears to be no ACM in the Building.
11.1.2 General Disclaimer. Except as expressly set forth
in this Agreement, it is understood and agreed that Seller and Seller's
agents or employees have not at any time made and are not now
making, and they specifically disclaim, any warranties, representations
or guaranties of any kind or character, express or implied, with
respect to the Property, including, but not limited to, warranties,
representations or guaranties as to (a) matters of title (other than
Seller's special warranty of title to be contained in the Deed), (b)
environmental matters relating to the Property or any portion thereof,
including, without limitation, the presence of Hazardous Materials
in, on, under or in the vicinity of the Property, (c) geological
conditions, including, without limitation, subsidence, subsurface
conditions, water table, underground water reservoirs, limitations
regarding the withdrawal of water, and geologic faults and the
resulting damage of past and/or future faulting, (d) whether, and to
the extent to which the Property or any portion thereof is affected by
any stream (surface or underground), body of water, wetlands, flood
prone area, flood plain, floodway or special flood hazard, (e)
drainage, (f) soil conditions, including the existence of instability,
past soil repairs, soil additions or conditions of soil fill, or
susceptibility to landslides, or the sufficiency of any undershoring,
(g) the presence of endangered species or any environmentally sensitive
or protected areas, (h) zoning or building entitlements to which the
Property or any portion thereof may be subject, (i) the availability of
any utilities to the Property or any portion thereof including, without
limitation, water, sewage, gas and electric, (j) usages of adjoining
property, (k) access to the Property or any portion thereof, (l) the
value, compliance with the plans and specifications, size, location,
age, use, design, quality, description, suitability, structural
integrity, operation, title to, or physical or financial condition of
the Property or any portion thereof, or any income, expenses, charges,
liens, encumbrances, rights or claims on or affecting or pertaining
to the Property or any part thereof, (m) the condition or use of the
Property or compliance of the Property with any or all past, present or
future federal, state or local ordinances, rules, regulations or laws,
building, fire or zoning ordinances, codes or other similar laws, (n)
the existence or non-existence of underground storage tanks, surface
impoundments, or landfills, (o) any other matter affecting the
stability and integrity of the Property, (p) the potential for
further development of the Property, (q) the merchantability of the
Property or fitness of the Property for any particular purpose, (r) the
truth, accuracy or completeness of the Property Documents, (s) tax
consequences, or (t) any other matter or thing with respect to the
Property.
11.2 Sale "As Is, Where Is."
-----------------------
Purchaser acknowledges and agrees that upon Closing, Seller
shall sell and convey to Purchaser and Purchaser shall accept the Property
"AS IS, WHERE IS, WITH ALL FAULTS," except for the special warranty
of title to be contained in the Deed, and except to the extent expressly
provided otherwise in this Agreement and any document executed by Seller and
delivered to Purchaser at Closing. Except as expressly set forth in this
Agreement, Purchaser has not relied and will not rely on, and Seller has not
made and is not liable for or bound by, any express or implied warranties,
guarantees, statements, representations or information pertaining to the
Property or relating thereto (including specifically, without limitation,
Property information packages distributed with respect to the Property) made
or furnished by Seller, or any property manager, real estate broker, agent
or third party representing or purporting to represent Seller, to whomever
made or given, directly or indirectly, orally or in writing. Purchaser
represents that it is a knowledgeable, experienced and sophisticated
purchaser of real estate and that, except as expressly set forth in
this Agreement, it is relying solely on its own expertise and that of
Purchaser's consultants in purchasing the Property and shall make an
independent verification of the accuracy of any documents and information
provided by Seller. Purchaser will conduct such inspections and
investigations of the Property as Purchaser deems necessary, including, but
not limited to, the physical and environmental conditions thereof, and shall
rely upon same. By failing to terminate this Agreement prior to the
expiration of the Inspection Period, Purchaser acknowledges that Seller has
afforded Purchaser a full opportunity to conduct such investigations of the
Property as Purchaser deemed necessary to satisfy itself as to the condition
of the Property and the existence or non-existence or curative action to be
taken with respect to any Hazardous Materials on or discharged from the
Property, and will rely solely upon same and not upon any information
provided by or on behalf of Seller or its agents or employees with respect
thereto, other than such representations, warranties and covenants of Seller
as are expressly set forth in this Agreement. Upon Closing, Purchaser shall
assume the risk that adverse matters, including, but not limited to, adverse
physical or construction defects or adverse environmental, health or safety
conditions, may not have been revealed by Purchaser's inspections and
investigations. Purchaser hereby represents and warrants to Seller that:
(a) Purchaser is represented by legal counsel in connection with the
transaction contemplated by this Agreement; and (b) Purchaser is purchasing
the Property for business, commercial, investment or other similar purpose
and not for use as Purchaser's residence. Purchaser waives any and all
rights or remedies it may have or be entitled to, deriving from disparity in
size or from any significant disparate bargaining position in relation to
Seller.
11.3 Seller Released from Liability.
-------------------------------
Purchaser acknowledges that it will have the opportunity
to inspect the Property during the Inspection Period, and during such
period, observe its physical characteristics and existing conditions
and the opportunity to conduct such investigation and study on and
of the Property and adjacent areas as Purchaser deems necessary, and
Purchaser hereby FOREVER RELEASES AND DISCHARGES Seller from all
responsibility and liability relating to the physical, environmental or
legal compliance status of the Property, whether arising before or after the
Effective Date, and liabilities under the Comprehensive Environmental
Response, Compensation and Liability Act Of 1980 (42 U.S.C. Sections 9601 et
seq.), as amended ("CERCLA"), regarding the condition, valuation, salability
or utility of the Property, or its suitability for any purpose whatsoever
(including, but not limited to, with respect to the presence in the soil,
air, structures and surface and subsurface waters, of Hazardous Materials or
other materials or substances that have been or may in the future be
determined to be toxic, hazardous, undesirable or subject to regulation and
that may need to be specially treated, handled and/or removed from the
Property under current or future federal, state and local laws, regulations
or guidelines, and any structural and geologic conditions, subsurface soil
and water conditions and solid and hazardous waste and Hazardous Materials
on, under, adjacent to or otherwise affecting the Property). Purchaser
further hereby WAIVES (and by Closing this transaction will be deemed to
have WAIVED) any and all objections and complaints (including, but not
limited to, federal, state and local statutory and common law based actions,
and any private right of action under any federal, state or local laws,
regulations or guidelines to which the Property is or may be subject,
including, but not limited to, CERCLA) concerning the physical
characteristics and any existing conditions of the Property relating to the
physical, environmental or legal compliance status of the Property, whether
arising before or after the Effective Date. Purchaser further hereby
assumes the risk of changes in applicable laws and regulations relating to
past, present and future environmental conditions on the Property and the
risk that adverse physical characteristics and conditions, including,
without limitation, the presence of Hazardous Materials or other
contaminants, may not have been revealed by its investigation.
Notwithstanding anything to the contrary contained herein, nothing in this
Section 11.3 shall be deemed to release Seller from any liability in
connection with Seller's breach of its representation and warranty relating
to Hazardous Materials set forth in Section 9.1.7 of this Agreement.
11.4 "Hazardous Materials" Defined.
------------------------------
For purposes hereof, "Hazardous Materials" means "Hazardous
Material," "Hazardous Substance," "Pollutant or Contaminant," and
"Petroleum" and "Natural Gas Liquids," as those terms are defined or used in
Section 101 of CERCLA, and any other substances regulated because of their
effect or potential effect on public health and the environment, including,
without limitation, PCBs, lead paint, asbestos, urea formaldehyde,
radioactive materials, putrescible materials, and infectious materials.
11.5 Intentionally Omitted.
----------------------
11.6 Survival.
---------
The terms and conditions of this Disclaimers, Release and
Indemnity shall expressly survive the Closing, not merge with the provisions
of any closing documents and shall be incorporated into the Deed.
Purchaser acknowledges and agrees that the disclaimers and other
agreements set forth herein are an integral part of this Agreement and that
Seller would not have agreed to sell the Property to Purchaser for the
Purchase Price without the disclaimers and other agreements set forth above.
ARTICLE 12
LEASE
-----
12.1 Lease as a Condition Precedent.
-------------------------------
Seller and Purchaser agree that a condition precedent to
Purchaser's obligations under this Agreement shall be that Seller and
Purchaser, on or before the expiration of the Inspection Period, have
fully agreed upon the final form of a lease (the "Lease") with
Seller, as tenant, and Purchaser, as landlord, whereby Seller shall lease
the entire Property, together with all of the Improvements located
thereupon. The Lease will be executed by Seller and Purchaser at Closing.
Purchaser agrees to furnish Seller with a proposed draft of the Lease by no
later than ten (10) days following the Effective Date, and thereafter, the
parties shall engage in good faith and diligent negotiations to agree upon
the form of such Lease. In the event that Seller fails to deliver at Closing
an executed counterpart of the Lease in the form agreed upon, then Purchaser
shall be permitted to terminate this Agreement, in which event the Xxxxxxx
Money, and if applicable, the Additional Xxxxxxx Money, shall be delivered
to Purchaser, together with any and all interest accrued thereupon. The
Lease negotiations shall commence with the use of a form of Lease prepared
by Purchaser's counsel, but shall in any and all events contain the
following terms:
a. The term of the Lease shall commence on the Closing Date and
shall terminate on the last day of the fifteenth (15th) lease
year.
b. The Lease shall be a so called "triple net" lease, such that
the rent to which Purchaser, as landlord, is entitled, shall
be absolutely net of all charges and expenses, associated
with the Property and any Improvements located thereupon.
Accordingly, Seller, as tenant under the Lease, shall pay
Minimum Rent and all other costs incurred in connection with
the Property, including without limitation, all expenses of
any kid or nature incurred in connection with the operation,
use, maintenance, repair or replacement of the Property and
any Improvements located thereupon (including without
limitation, the roof and structure of such Improvements),
including without limitation, any costs to comply with any
and all laws pertaining to the operation and condition of the
Property and any improvements located thereupon.
c. The Minimum Rent shall be as follows:
Lease Year Monthly Rent Annual Rent Annual Rent/SF
-----------------------------------------------------------
1-5 $39,171.92 $470,063.00 $11.00
6-10 $43,249.00 $518,988.00 $12.14
11-15 $47,750.00 $573,004.00 $13.41
d. Seller, as tenant, shall have two (2) five (5) year renewal
options at 95% of the then current market "triple net" rent.
Seller, as tenant, must give notice to renew not later than
180 days prior to the expiration of the then current Lease
Term.
e. Seller, as tenant, shall pay all real estate taxes directly
to the taxing authority, and provide Purchaser, as landlord,
with evidence of such payment. Seller, as tenant, shall also
maintain all insurance coverages required by Purchaser, as
landlord, (or Purchaser's lender) including without
limitation so-called "special form" coverage in an amount
equal to at least the full replacement cost, rent
loss/business interruption insurance, commercial general
liability insurance with liability limits of at least
$5,000,000.00, and worker's compensation insurance, as and to
the extent such worker's compensation insurance is required
by applicable law.
f. (1) At such time as Purchaser desires to commence
marketing the Property for sale to third parties, Purchaser
shall present Seller with a written offer to sell the
Property to Seller at the price Purchaser intends to list the
Property for sale (the "Listing Price"). Seller shall
thereafter have the right, by written notice to Purchaser
delivered no later than fifteen (15) days following Seller's
receipt of Purchaser's written notification of the Listing
Price, to either (i) accept the Listing Price, (ii) reject
the Listing Price, and present Purchaser with a counteroffer
price (the "Counteroffer Price"), which Counteroffer Price
shall contemplate Net Transaction Terms (as such term is
hereinafter defined) if the Listing Price presented by
Purchaser to Seller contemplates such Net Transaction Terms,
or (ii) reject the Listing Price without presenting Purchaser
with any counteroffer price. Failure of Seller to respond in
writing within the aforesaid fifteen (15) day period shall be
deemed to be a rejection by Seller of the Listing Price,
without presenting any counteroffer price, and Purchaser
shall thereafter be free to market and sell the Property to
third parties without any restrictions except for (i)
Seller's rights under this subparagraph shall apply to
subsequent sales by any future owners of the Property, (ii)
Seller's Price Protection Right of First Refusal (as
hereinafter defined) and (iii) Seller's right to repurchase
the Property pursuant to Section 12 (g) of this Agreement.
In the event that Seller accepts the Listing Price, or in the
event Purchaser accepts the Counteroffer Price, Seller shall
be obligated within three (3) business days thereof, to
deposit the sum of Fifty Thousand and No/100 Dollars
($50,000.00) as non-refundable, but applicable xxxxxxx money,
with Republic Title of Texas, Inc., and the closing for such
sale by Purchaser to Seller shall occur no later than forty-
five (45) days following the date of Purchaser's receipt of
Seller's written acceptance of the Listing Price or if
applicable, Seller's receipt of Purchaser's written
acceptance of the Counteroffer Price (the "Closing Period").
During the initial thirty (30) days of the Closing Period,
Seller shall have the right to review and approve a current
Title Commitment of the Property, legible copies of all
documents of record listed in the Title Commitment as
exceptions to title of the Property and a current Survey of
the Property, it being understood and agreed that (a) such
title and survey matters as existed as of the date of
Purchaser's closing on the acquisition of the Property from
Seller, (b) such title and survey matters as Seller may
thereafter have approved in writing, (c) such additional
title and survey matters which arise out of Seller's use of
the Property and/or construction of the Additional Seller
Improvements (as hereinafter defined) and (d) such title and
survey matters as Purchaser agrees in writing to cure shall
be deemed acceptable to Seller (collectively, the "Permitted
Exceptions"). Further, in connection with such sale, the
Property shall be conveyed by Purchaser to Seller on an "as
is, where is" basis without any representation or warranty
whatsoever (other than the limited representation as to title
to be contained in the deed), subject only to the Permitted
Exceptions. In the event the Listing Price presented by
Purchaser to Seller contemplates Net Transaction Terms, and
such is the basis upon which Purchaser intends to market the
Property for sale to third parties, then Seller's acquisition
of the Property shall be pursuant to the Net Transaction
Terms (with the term "Net Transaction Terms being defined as
purchase price to Purchaser being net of any and all closing
costs (including without limitation, brokerage commissions
and title insurance fees), all of which shall be the
responsibility of Seller (as purchaser), and Seller (as
purchaser) shall also be obligated to either assume any then
existing mortgage financing on the Property and pay all
assumption costs in connection therewith, or pay off any then
existing mortgage financing on the Property and pay any
prepayment penalties or other similar charges required in
connection with extinguishing such mortgage financing. In
the event that the Listing Price presented by Purchaser to
Seller does not contemplate the Net Transaction Terms, then
the closing costs relating to such transaction shall be borne
by the parties in the following manner: Seller shall be
responsible for any updates to the Survey, any special
endorsements to the Owner's Policy of Title Insurance, and
for the costs of Seller's own legal fees. Purchaser shall be
responsible for the costs of the basic premium for the
Owner's Policy of Title Insurance, any costs and fees due and
payable to its lender or other parties to remove any monetary
liens from the Property and the cost of its own legal fees.
All other closing costs shall be borne by the party incurring
the same.
(2) In the event that Seller rejects the Listing Price, and
presents Purchaser with a Counteroffer Price which is not
accepted by Purchaser, then in the event Purchaser desires,
during the one hundred eighty (180) day period following
Purchaser's receipt of the Counteroffer Price, to sell the
Property to a third party for a purchase price which is less
than ninety five percent (95%) of the Counteroffer Price (the
"Proposed Subsequent Transaction"), Purchaser shall be
obligated to provide Seller with written notice of such
Proposed Subsequent Transaction, and Seller shall have a
right of first refusal ("Seller's Price Protection Right of
First Refusal") to purchase the Property at a price equal to
the Counteroffer Price, which Seller's Price Protection Right
of First Refusal must be exercised, if at all, by no later
than seven (7) business days following Seller's receipt of
written notice from Purchaser of the Proposed Subsequent
Transaction. Failure of Seller to exercise such Seller's
Price Protection Right of First Refusal within seven (7)
business days shall be deemed a waiver of such Seller's Price
Protection Right of First Refusal. In the event that Seller
exercises Seller's Price Protection Right of First Refusal,
Seller shall be obligated within three (3) business days
thereof, to deposit the sum of Fifty Thousand and No/100
Dollars ($50,000.00) as non-refundable, but applicable
xxxxxxx money, with Republic Title of Texas, Inc., and the
closing for such sale by Purchaser to Seller shall occur no
later than forty-five (45) days following the date of
Purchaser's receipt of Seller's written exercise thereof (the
"Closing Period"). During the initial thirty (30) days of
the Closing Period, Seller shall have the right to review and
approve a current Title Commitment of the Property, legible
copies of all documents of record listed in the Title
Commitment as exceptions to title of the Property and a
current Survey of the Property it being understood and agreed
that (a) such title and survey matters as existed as of the
date of Purchaser's closing on the acquisition of the
Property from Seller, (b) such title and survey matters as
Seller may thereafter have approved in writing, (c) such
additional title and survey matters which arise out of
Seller's use of the Property and/or construction of the
Additional Seller Improvements (as hereinafter defined) and
(d) such title and survey matters as Purchaser agrees in
writing to cure shall be deemed acceptable to Seller
(collectively, the "Permitted Exceptions"). Further, in
connection with such sale, the Property shall be conveyed by
Purchaser to Seller on an "as is, where is" basis without any
representation or warranty whatsoever (other than the limited
representation as to title to be contained in the deed),
subject only to the Permitted Exceptions. In the event the
Listing Price presented by Purchaser to Seller contemplates
Net Transaction Terms, and such is the basis upon which
Purchaser intends to market the Property for sale to third
parties, then Seller's acquisition of the Property shall be
pursuant to the Net Transaction Terms (with the term "Net
Transaction Terms being defined as purchase price to
Purchaser being net of any and all closing costs (including
without limitation, brokerage commissions and title insurance
fees), all of which shall be the responsibility of Seller (as
purchaser), and Seller (as purchaser) shall also be obligated
to either assume any then existing mortgage financing on the
Property and pay all assumption costs in connection
therewith, or pay off any then existing mortgage financing on
the Property and pay any prepayment penalties or other
similar charges required in connection with extinguishing
such mortgage financing. In the event that the Listing Price
presented by Purchaser to Seller does not contemplate the Net
Transaction Terms, then the closing costs relating to such
transaction shall be borne by the parties in the following
manner: Seller shall be responsible for any updates to the
Survey, any special endorsements to the Owner's Policy of
Title Insurance, and for the costs of Seller's own legal
fees. Purchaser shall be responsible for the costs of the
basic premium for the Owner's Policy of Title Insurance, any
costs and fees due and payable to its lender or other parties
to remove any monetary liens from the Property and the cost
of its own legal fees. All other closing costs shall be
borne by the party incurring the same.
In the event Purchaser does not sell the Property within one
(1) year following Purchaser's receipt of the Counteroffer
Price, Purchaser shall be required to follow the procedure
outlined in Section 12 (f) (1) above in the event Purchaser
desires to attempt to sell the Property again.
g. Seller shall have the option to repurchase the Property
at the end of the fifth (5th) Lease Year at a purchase price
equal to the greater of (i) 105% of the fair market value of
the Property to be established pursuant to MAI appraisals
(which shall take into consideration that the Property is
leased to a credit tenant, and which shall take into
consideration the purchase of the Property as part of a like
kind exchange, on the part of the buyer, pursuant to Section
1031 of the Internal Revenue Code) or (ii) $5,800,000.00.
The appraisal process shall provide for each of Seller and
Purchaser obtaining separate appraisals, and then presenting
such separate appraisals to a third independent appraiser
mutually selected by Purchaser and Seller, who shall appraise
the Property and then select the appraisal of Purchaser or
Seller which is closest to such third appraiser's appraisal.
In the event Seller has elected to construct additional
improvements to the Property at its own cost pursuant to its
rights to do so under the Lease (the "Additional Seller
Improvements"), the appraisers shall be instructed to exclude
the value attributable to the Additional Seller Improvements
from the scope of the appraisal, such that the appraised
value does not attribute any value to the Additional Seller
Improvements. In order for Seller to exercise its repurchase
option under this subparagraph, Seller shall be obligated to
deliver written notice of such exercise by no later than 120
days (but no earlier than 240 days) prior to the expiration
of the fifth (5th) Lease Year, and Seller shall be obligated
within three (3) business days thereof, to deposit the sum of
Fifty Thousand and No/100 Dollars ($50,000.00) as non-
refundable, but applicable xxxxxxx money, with Republic Title
of Texas, Inc. The closing for such repurchase shall occur
prior to the earlier to occur of (i) forty-five (45) days
after the date the purchase price has been determined as set
forth in this Section 12 (g) or (ii) the date upon which the
expiration of the fifth (5th) Lease Year shall occur (the
"Closing Period"). During the initial thirty (30) days of
the Closing Period, Seller shall have the right to review and
approve a current Title Commitment of the Property, legible
copies of all documents of record listed in the Title
Commitment as exceptions to title of the Property and a
current Survey of the Property, it being understood and
agreed that (a) such title and survey matters as existed as
of the date of Purchaser's closing on the acquisition of the
Property from Seller, (b) such title and survey matters as
Seller may thereafter have approved in writing, (c) such
additional title and survey matters which arise out of
Seller's use of the Property and/or construction of the
Additional Seller Improvements (as hereinafter defined) and
(d) such title and survey matters as Purchaser agrees in
writing to cure shall be deemed acceptable to Seller
(collectively, the "Permitted Exceptions"). Further, in
connection with such repurchase, the Property shall be
conveyed by Purchaser to Seller on an as is, where is basis
without any representation or warranty whatsoever (other than
the limited representation as to title to be contained in the
deed), but subject only to the Permitted Exceptions and the
purchase price to Purchaser shall be net of any and all
closing costs (including without limitation, brokerage
commissions and title insurance fees), all of which shall be
the responsibility of Seller, and Seller shall also be
obligated to either assume any then existing mortgage
financing on the Property and pay all assumption costs in
connection therewith, or pay off any then existing mortgage
financing on the Property and pay any prepayment penalties or
other similar charges required in connection with
extinguishing such mortgage financing.
h. In the event Seller is required to assume Purchaser's
existing mortgage financing on the Property pursuant to
Section 12 (f) or Section 12 (g) above, Seller shall be
obligated to pay in cash at closing the amount of the
purchase price less the outstanding principal amount of
Purchaser's existing mortgage financing that Seller is
assuming.
i. Seller shall have the right to expand the Improvements
located on the Real Property; provided, however, that (x) any
such expansion shall be at Seller's sole cost and expense,
and (y) Seller shall not permit a lien of any kind, whether
deed of trust, mortgage, mechanic's, materialmen's, or
otherwise, to attach to the Property in connection with such
expansion.
j. The effectiveness of the Lease shall be expressly conditioned
upon Purchaser's Closing on the acquisition of fee simple
title to the Property.
Seller and Purchaser agree that in the event of any conflicts
between the fully executed and delivered Lease and this Agreement, the fully
executed and delivered Lease shall control.
ARTICLE 13
MISCELLANEOUS
-------------
13.1 Parties Bound; Assignment.
--------------------------
This Agreement, and the terms, covenants, and conditions herein
contained, shall inure to the benefit of and be binding upon the heirs,
personal representatives, successors, and assigns of each of the parties
hereto. Purchaser may assign its rights under this Agreement upon the
following conditions: (a) all of the Xxxxxxx Money must have been delivered
in accordance herewith, (b) the assignee of Purchaser shall assume all
obligations of Purchaser hereunder, but Purchaser shall remain primarily
liable for the performance of Purchaser's obligations, and (c) a copy of
the fully executed written assignment and assumption agreement shall be
delivered to Seller prior to Closing.
13.2 Headings.
---------
The article, section, subsection, paragraph and/or other
headings of this Agreement are for convenience only and in no way limit or
enlarge the scope or meaning of the language hereof.
13.3 Invalidity and Waiver.
----------------------
If any portion of this Agreement is held invalid or
inoperative, then so far as is reasonable and possible the remainder
of this Agreement shall be deemed valid and operative, and, to the
greatest extent legally possible, effect shall be given to the intent
manifested by the portion held invalid or inoperative. The failure by
either party to enforce against the other any term or provision of this
Agreement shall not be deemed to be a waiver of such party's right to
enforce against the other party the same or any other such term or provision
in the future.
13.4 Governing Law.
--------------
This Agreement shall, in all respects, be governed, construed,
applied, and enforced in accordance with the law of the state in which the
Real Property is located.
13.5 Survival.
---------
The provisions of this Agreement that contemplate performance
after the Closing and the obligations of the parties not fully performed
at the Closing (other than any unfulfilled closing conditions which
have been waived or deemed waived by the other party) shall survive
the Closing and shall not be deemed to be merged into or waived by the
instruments of Closing.
13.6 Entirety and Amendments.
------------------------
This Agreement embodies the entire agreement between the
parties and supersedes all prior agreements and understandings relating to
the Property. This Agreement may be amended or supplemented only by an
instrument in writing executed by the party against whom enforcement is
sought. All Exhibits hereto are incorporated herein by this reference for
all purposes.
13.7 Time.
-----
Time is of the essence in the performance of this Agreement.
13.8 Confidentiality.
----------------
Purchaser shall make no public announcement or disclosure
of any information related to this Agreement to outside brokers or
third parties, before or after the Closing, without the prior written
specific consent of Seller; provided, however, that Purchaser may, subject
to the provisions of Section Proprietary Information; Confidentiality, make
disclosure of this Agreement to potential investors and other parties as
necessary to perform its obligations hereunder and as may be required under
laws or regulations applicable to Purchaser (including disclosures required
by federal and state securities laws in connection with Purchaser's private
placement efforts). Notwithstanding anything to the contrary set forth
herein or in any other agreement to which the parties hereto are parties or
by which they are bound, any and all obligations of confidentiality
contained herein and therein (the "Confidentiality Obligations"), as they
relate to the transactions and events contemplated by this Agreement
(collectively, the "Transaction"), shall not apply to the "structure or tax
aspects" (as that phrase is used in Section 1.6011-4(b)(3) [or any successor
provision] of the Treasury Regulations [the "Confidentiality Regulation"]
promulgated under Section 6011 of the Internal Revenue Code of 1986, as
amended) of the Transaction; provided, however, that the Confidentiality
Obligations nevertheless shall apply at a given time to any and all items of
information not required to be freely disclosable at such time in order for
the Transaction not to be treated as "offered under conditions of
confidentiality" within the meaning of the Confidentiality Regulation.
Further, notwithstanding anything to the contrary contained herein, to the
extent that Seller and Purchaser have executed a Mutual Nondisclosure
Agreement, Purchaser shall be permitted to make such disclosures of
information relating to this Agreement as may be permitted by such Mutual
Nondisclosure Agreement.
13.9 No Electronic Transactions.
---------------------------
The parties hereby acknowledge and agree this Agreement shall
not be executed, entered into, altered, amended or modified by electronic
means. Without limiting the generality of the foregoing, the parties hereby
agree the transactions contemplated by this Agreement shall not be conducted
by electronic means, except as specifically set forth in the "Notices"
section of this Agreement.
13.10 Notices.
--------
All notices required or permitted hereunder shall be in writing
and shall be served on the parties at the addresses set forth in Section
1.3. Any such notices shall, unless otherwise provided herein, be given or
served (a) by depositing the same in the United States mail, postage paid,
certified and addressed to the party to be notified, with return receipt
requested, (b) by overnight delivery using a nationally recognized overnight
courier, (c) by personal delivery, (d) by facsimile transmission during
normal business hours with a confirmation copy delivered by another method
permitted under this Section 13.10, or (e) by electronic mail addressed to
the electronic mail address set forth in Section 1.3 for the party to be
notified with a confirmation copy delivered by another method permitted
under this Section 13.10. Notice given in accordance herewith for all
permitted forms of notice other than by electronic mail, shall be effective
upon the earlier to occur of actual delivery to the address of the addressee
or refusal of receipt by the addressee (even if such addressee refuses
delivery thereof). Notice given by electronic mail in accordance herewith
shall be effective upon the entrance of such electronic mail into the
information processing system designated by the recipient's electronic mail
address. Except for facsimile and electronic mail notices as described
above, no notice hereunder shall be effective if sent or delivered by
electronic means. In no event shall this Agreement be altered, amended or
modified by electronic mail or electronic record. A party's address may
be changed by written notice to the other party; provided, however, that no
notice of a change of address shall be effective until actual receipt of
such notice. Copies of notices are for informational purposes only, and
a failure to give or receive copies of any notice shall not be deemed a
failure to give notice. Notices given by counsel to the Purchaser shall
be deemed given by Purchaser and notices given by counsel to the Seller
shall be deemed given by Seller.
13.11 Construction.
-------------
The parties acknowledge that the parties and their counsel have
reviewed and revised this Agreement and agree that the normal rule of
construction - to the effect that any ambiguities are to be resolved against
the drafting party - shall not be employed in the interpretation of this
Agreement or any exhibits or amendments hereto.
13.12 Calculation of Time Periods; Business Day.
------------------------------------------
Unless otherwise specified, in computing any period of time
described herein, the day of the act or event after which the designated
period of time begins to run is not to be included and the last day of the
period so computed is to be included, unless such last day is not a Business
Day, in which event the period shall run until the end of the next day which
is a Business Day. The last day of any period of time described herein
shall be deemed to end at 5:00 p.m. local time in the state in which the
Real Property is located. As used herein, the term "Business Day" means
any day that is not a Saturday, Sunday or legal holiday for national banks
in the city in which the Real Property is located.
13.13 Execution in Counterparts.
--------------------------
This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, and all of such
counterparts shall constitute one Agreement. To facilitate execution
of this Agreement, the parties may execute and exchange by telephone
facsimile counterparts of the signature pages, provided that executed
originals thereof are forwarded to the other party on the same day by any
of the delivery methods set forth in Section 13.10 other than facsimile.
13.14 No Recordation.
---------------
Without the prior written consent of Seller, there shall be
no recordation of either this Agreement or any memorandum hereof, or any
affidavit pertaining hereto, and any such recordation of this Agreement
or memorandum or affidavit by Purchaser without the prior written
consent of Seller shall constitute a default hereunder by Purchaser,
whereupon Seller shall have the remedies set forth in Section Seller's
Remedies hereof. In addition to any such remedies, Purchaser shall be
obligated to execute an instrument in recordable form releasing this
Agreement or memorandum or affidavit, and Purchaser's obligations pursuant
to this Section No Recordation shall survive any termination of this
Agreement as a surviving obligation.
13.15 Further Assurances.
-------------------
In addition to the acts and deeds recited herein and
contemplated to be performed, executed and/or delivered by either party at
Closing, each party agrees to perform, execute and deliver, but without
any obligation to incur any additional liability or expense, on or after the
Closing any further deliveries and assurances as may be reasonably necessary
to consummate the transactions contemplated hereby or to further perfect the
conveyance, transfer and assignment of the Property to Purchaser.
13.16 No Third Party Beneficiary.
---------------------------
The provisions of this Agreement and of the documents to be
executed and delivered at Closing are and will be for the benefit of Seller
and Purchaser only and are not for the benefit of any third party, and
accordingly, no third party shall have the right to enforce the provisions
of this Agreement or of the documents to be executed and delivered at
Closing.
13.17 Reporting Person.
-----------------
Purchaser and Seller hereby designate the Title Company as
the "reporting person" pursuant to the provisions of Section 6045(e) of
the Internal Revenue Code of 1986, as amended.
13.18 Intentionally Omitted.
----------------------
[SIGNATURE PAGES AND EXHIBITS TO FOLLOW]
SIGNATURE PAGE TO PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
XXXXXXXXXX LABORATORIES, INC.,
AND
RAINIER CAPITAL MANAGEMENT, L.P.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year written below.
SELLER:
XXXXXXXXXX LABORATORIES, INC.,
a Texas corporation
By:
------------------------------
Xxxxxxx X. Xxxxxx, President & CEO
Date executed by Seller
_______________________
PURCHASER:
RAINIER CAPITAL MANAGEMENT, L.P.,
a Texas limited partnership
By: Rainier Capital Management I, LLC,
a Texas limited liability company,
Date executed by Purchaser its General Partner
__________________________
By:
------------------------------
J. Xxxxxxx Xxxx, President
JOINDER BY ESCROW AGENT
-----------------------
Escrow Agent has executed this Agreement in order to confirm that Escrow
Agent has received and shall hold the Xxxxxxx Money required to be deposited
under this Agreement and the interest earned thereto, in escrow, and shall
disburse the Xxxxxxx Money, and the interest earned thereon, pursuant to the
provisions of this Agreement.
REPUBLIC TITLE OF TEXAS, INC.
Date executed by Escrow Agent By:
----------------------------------
Name:
--------------------------------
____________________ Title:
------------------------------
LIST OF EXHIBITS
----------------
A - Legal Description of Land
B - Special Warranty Deed
C - Intentionally Omitted
D - FIRPTA Certificate
E - Intentionally Omitted
F - Intentionally Omitted
G - Intentionally Omitted
H - Intentionally Omitted
I - Intentionally Omitted
J - Intentionally Omitted
EXHIBIT A
---------
LEGAL DESCRIPTION OF LAND
-------------------------
Being Xxx 0 xx xxx XXX XXXXXXX XXXXX XXXX DISTRIBUTION CENTER, SIXTH
INSTALLMENT, an addition to the City of Irving, Dallas County, Texas,
according to the Map or Plat thereof recorded in Volume 80188, Page1806, of
the Deed Records of Dallas County, Texas.
EXHIBIT B
---------
SPECIAL WARRANTY DEED
---------------------
THE STATE OF TEXAS S
S KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF XXXXXX X
XXXXXXXXXX LABORATORIES, INC., a Texas corporation ("Grantor"), for and
in consideration of the sum of $10.00 and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
has GRANTED, BARGAINED, SOLD, and CONVEYED and by these presents does GRANT,
BARGAIN, SELL, and CONVEY unto RAINIER CAPITAL MANAGEMENT, L.P., a Texas
limited partnership ("Grantee") the tract or parcel of land in Dallas
County, Texas, described in Exhibit A, together with all improvements
located thereon and all rights, titles, and interests appurtenant thereto
including, without limitation, Grantor's interest, if any, in any and all
adjacent streets, alleys, rights of way and any adjacent strips and gores
(such land and interests are hereinafter collectively referred to as the
"Property").
This Special Warranty Deed and the conveyance hereinabove set forth is
executed by Grantor and accepted by Grantee subject to all matters described
in Exhibit B hereto and incorporated herein by this reference, to the extent
the same are validly existing and applicable to the Property as of the date
hereof (hereinafter referred to collectively as the "Permitted Exceptions").
Grantee acknowledges that Grantee has independently and personally
inspected the Property. Except for the special warranty of title contained
herein, and except as otherwise provided in that certain Purchase and Sale
Agreement dated ____________, 2005 by and between Grantor and Grantee, the
Property is hereby conveyed to and accepted by Grantee in its present
condition, "AS IS, WITH ALL FAULTS, AND WITHOUT ANY WARRANTY WHATSOEVER,
EXPRESS OR IMPLIED."
TO HAVE AND TO HOLD the Property, together with all and singular the
rights and appurtenances thereunto in anywise belonging, unto Grantee, its
successors and assigns forever, and Grantor does hereby bind itself, its
successors and assigns, to WARRANT AND FOREVER DEFEND all and singular the
title to the Property unto the said Grantee, its successors and assigns
against every person whomsoever lawfully claiming or to claim the same or
any part thereof by, through, or under Grantor but not otherwise, subject to
the Permitted Exceptions.
Grantee's address is: 00000 Xxxx Xxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000.
EXECUTED as of _____________________, 2005.
GRANTOR:
--------
XXXXXXXXXX LABORATORIES, INC., a Texas
corporation
By: __________________________________________
Xxxxxxx X. Xxxxxx, President and CEO
THE STATE OF TEXAS S
S
COUNTY OF DALLAS S
This instrument was acknowledged before me on ______________, 2005, by
Xxxxxxx X. Xxxxxx, as President and CEO of XXXXXXXXXX LABORATORIES, INC., a
Texas corporation, on behalf of said corporation.
----------------------------------------------
Notary Public, State of Texas
EXHIBIT C
---------
INTENTIONALLY OMITTED
---------------------
EXHIBIT D
---------
FIRPTA CERTIFICATE
------------------
Section 1445 of the Internal Revenue Code provides that a transferee of
a U.S. real property interest must withhold tax if the transferor is a
foreign person. For U.S. tax purposes (including Section 1445), the owner
of a disregarded entity (which has legal title to a U.S. real property
interest under local law) will be the transferor of the property and not the
disregarded entity. To inform RAINIER CAPITAL MANAGEMENT, L.P., a Texas
limited partnership ("Transferee") that withholding of tax is not required
upon the disposition of a U.S. real property interest by XXXXXXXXXX
LABORATORIES, INC., a Texas corporation ("Transferor") (U.S. employer
identification number 00-0000000), the undersigned, in his capacity as
President and CEO of Transferor, but not individually, hereby certifies to
Transferee the following on behalf of Transferor:
1. Transferor is not a foreign corporation, foreign partnership,
foreign trust, or foreign estate (as those terms are defined in the Internal
Revenue Code and Income Tax Regulations);
2. Transferor is not a disregarded entity as defined in
Section 1.1445-2(b)(2)(iii);
3. Transferor's U.S. employer identification number is 00-0000000;
and
4. Transferor's office address is 0000 Xxxxxx Xxxx Xxxx, Xxxxxx,
Xxxxx 00000.
Transferor understands that this certification may be disclosed to the
Internal Revenue Service by Transferee and that any false statement
contained herein could be punished by fine, imprisonment, or both.
Under penalties of perjury I declare that I have examined this
certification and to the best of my knowledge and belief it is true, correct
and complete, and I further declare that I have authority to sign this
document on behalf of Transferor.
Dated as of _____________, 2005.
XXXXXXXXXX LABORATORIES, INC., a Texas
corporation
By: _____________________________________
Xxxxxxx X. Xxxxxx, President and CEO
THE STATE OF TEXAS S
S
COUNTY OF DALLAS S
This instrument was acknowledged before me on ______________, 2005, by
Xxxxxxx X. Xxxxxx, as President and CEO of XXXXXXXXXX LABORATORIES, INC., a
Texas corporation, on behalf of said corporation.
----------------------------------------------
Notary Public, State of Texas
EXHIBIT E
---------
INTENTIONALLY OMITTED
---------------------
EXHIBIT F
---------
INTENTIONALLY OMITTED
---------------------
EXHIBIT G
---------
INTENTIONALLY OMITTED
---------------------
EXHIBIT H
---------
INTENTIONALLY OMITTED
---------------------
EXHIBIT I
---------
INTENTIONALLY OMITTED
---------------------
EXHIBIT J
---------
INTENTIONALLY OMITTED
---------------------
