EXHIBIT 10.50
AGREEMENT OF SALE AND PURCHASE
THE STATE OF TEXAS
COUNTY OF TRAVIS
THIS AGREEMENT OF SALE AND PURCHASE ("Agreement") is made by and between
INVESTORS LIFE INSURANCE COMPANY OF NORTH AMERICA, a Texas corporation
("Seller") and ASPEN GROWTH PROPERTIES, INC., a Texas corporation ("Purchaser").
Seller and Purchaser are sometimes referred to in this Agreement individually as
a "Party" and collectively as the "Parties".
W I T N E S S E T H:
I.
Sale and Purchase
1.01 The Property. Seller hereby agrees to sell and convey unto Purchaser,
and Purchaser hereby agrees to purchase from Seller, for the price and subject
to the terms, covenants, conditions and provisions herein set forth, the land
which is described on Exhibit "1.01" attached to this Agreement and incorporated
herein by reference (the "Land"), together with all of the buildings and other
improvements located on the Land (the "Improvements") and all of Seller's right,
title and interest in and to all appurtenances benefiting or pertaining to the
Land and/or the Improvements, including without limitation, all of Seller's
right, title and interest in and to all streets, alleys, rights of way or
easements adjacent to the Land, all strips or pieces of land adjacent to the
Land and all utility lines and facilities located upon, within or adjacent to
the Land (the "Appurtenances"). The Land, the Improvements and the Appurtenances
are referred to in this Agreement collectively as the "Property".
1.02 The Personal Property. Seller will, within ten (10) calendar days
after the Effective Date of this Agreement, provide to Purchaser a list of the
items of personal property which will be conveyed to Purchaser under the terms
of this Agreement (the "Personal Property").
1.03 The Leases. Seller will, within ten (10) calendar days after the
Effective Date of this Agreement, provide to Purchaser: (a) copies of the leases
and landlord-permitted subleases (such leases and subleases being referred to in
this Agreement collectively as the "Existing Leases"); and (b) a rent roll which
includes a list of all of the Existing Leases and which sets forth each tenant's
name, amount of monthly rent, amount of security deposit, expiration of term,
current status of payments and amount of any advance rentals received (the "Rent
Roll"). Seller may, at Seller's option and election, enter into additional
leases with respect to the Property and may permit additional subleases with
respect to the Property (such additional leases and additional subleases being
referred to in this Agreement collectively as the "Additional Leases") prior to
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the Closing (hereinafter defined) under this Agreement. Purchaser's approval is
not required for any Additional Leases which are entered into by Seller during
the period of time between the Effective Date of this Agreement and the date
which is seven (7) calendar days prior to the expiration of the Inspection
Period (the "Seller Leasing Period"), but copies of all of the Additional Leases
entered into during the Seller Leasing Period must be delivered to Purchaser on
or before the final day of the Seller Leasing Period. After the expiration of
the Seller Leasing Period, Seller will not enter into any Additional Leases
unless such Additional Leases are approved in advance in writing by Purchaser,
but: (a) Purchaser will not unreasonably withhold its approval of any proposed
Additional Leases; and (b) Purchaser's approval right will terminate and be of
no further force or affect upon the termination of this Agreement. The Existing
Leases and the Additional Leases are referred to in this Agreement collectively
as the "Leases". At the Closing, Seller will assign to Purchaser all of Seller's
right, title and interest in and to the Leases and Purchaser will assume all of
Seller's obligations under the Leases.
1.04 The Seller Lease. The Existing Leases include that certain "River
Place Pointe I Lease Agreement" by and between Seller as "Landlord" and Seller
also as "Tenant" (the "Seller Lease") pursuant to which Seller is occupying a
portion of the Property, as more fully described therein (the "Seller
Premises"). After the Closing: (a) Seller will continue to occupy the Seller
Premises under the terms and provisions of the Seller Lease; (b) Seller will
continue to have and enjoy all of the rights and benefits of the "Tenant" under
the Seller Lease; (c) Seller will be responsible and liable for the performance
of all of the obligations of the "Tenant" under the Seller Lease; (d) Purchaser
will have and enjoy all of the rights and benefits of the "Landlord" under the
Seller Lease; and (e) Purchaser will be responsible and liable for all of the
duties and obligations of the "Landlord" under the Seller Lease.
1.05 The Purchaser Sublease. Purchaser may, at Purchaser's option and
election, sublease from Seller a portion of the Seller Premises under the terms
and provisions of a sublease agreement in the form of Exhibit "1.05" attached to
this Agreement and incorporated herein by reference (the "Purchaser Sublease").
Purchaser must exercise Purchaser's option to enter into the Purchaser Sublease
by delivering a written notice of exercise of such option to Seller at least ten
(10) days prior to the Closing Date under this Agreement. If Purchaser does not
deliver such written notice of exercise to Seller within such time period, then
Purchaser will be deemed to have waived Purchaser's right to enter into the
Purchaser Sublease.
1.06 The Tenant Improvement Loan. Seller has made an advance in the amount
of $1,127,085.00 to SBC Services, Inc. for tenant improvements in excess of the
agreed upon level of landlord-provided improvements (the "Tenant Improvement
Loan"). The Tenant Improvement Loan is further described as the advance which
was made by Seller to SBC Services, Inc. as the "Additional Tenant Improvement
Allowance" under the terms and provisions of Paragraph 20(c) in the body of the
"Standard Office Lease" dated July 28, 2000, by and between Investors Life
Insurance Company of North America as "Landlord" and SBC Services, Inc. as
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"Tenant", which said advance bears interest at the rate of 10% per annum and is
payable in installments over the initial term of such lease. Seller may, at
Seller's option and election, accept a complete or partial payoff (at par or
with a discount) of the Tenant Improvement Loan any time at or prior to the
Closing. If the Tenant Improvement Loan is not paid off in its entirety at or
prior to the Closing, then, at the Closing: (a) Purchaser will pay to
Seller/Landlord, in addition to the Purchase Price, an amount equal to the
unreimbursed principal amount plus all accrued but unpaid interest under the
Tenant Improvement Loan which is outstanding (but which may or may not be due
and payable) by SBC Services, Inc. as of the Closing (such principal and accrued
interest being referred to in this Agreement collectively as the "Tenant
Improvement Loan Payment Amount"); and (b) Seller shall assign all of its right
and interest in and to the Tenant Improvement Loan to Purchaser. Purchaser
acknowledges that Seller and SBC Services, Inc. have, prior to the execution of
this Agreement, discussed the possible early payment by SBC Services, Inc. to
Seller of the Tenant Improvement Loan Payment Amount. Any payments made by SBC
Services, Inc. to Seller with respect to the Tenant Improvement Loan prior to
the Closing will be deducted from the Tenant Improvement Loan Payment Amount
otherwise payable by Purchaser to Seller at the Closing. If Seller agrees to a
discounted partial payoff of the Tenant Improvement Loan prior to the Closing,
then the Tenant Improvement Loan Amount payable by Purchaser will include only
the discounted outstanding amount of the Tenant Improvement Loan as of the date
of Closing, including the discounted amount of all unpaid principal and all
accrued but unpaid interest.
1.07 Service Agreements. Seller will, within ten (10) calendar days after
the Effective Date of this Agreement, provide to Purchaser copies of the service
agreements which currently affect the Property and which will survive the
Closing under this Agreement (the "Existing Service Agreements"). Seller may, at
Seller's option and election, enter into additional service agreements with
respect to the Property prior to the Closing under this Agreement (the
"Additional Service Agreements"). Purchaser's approval is not required for any
Additional Service Agreements which are entered into by Seller during the Seller
Leasing Period, but copies of all of the Additional Service Agreements entered
into during the Seller Leasing Period must be delivered to Purchaser on or
before the final day of the Seller Leasing Period. After the expiration of the
Seller Leasing Period, Seller will not enter into any Additional Service
Agreements unless such Additional Service Agreements are approved in advance in
writing by Purchaser, but: (a) Purchaser will not unreasonably withhold its
approval of any proposed Additional Service Agreements; and (b) Purchaser's
approval right will terminate and be of no further force or affect upon any
termination of this Agreement. The Existing Service Agreements and the
Additional Service Agreements are referred to in this Agreement collectively as
the "Service Agreements". At the Closing, Seller will assign to Purchaser all of
Seller's right, title and interest in and to the Service Agreements and
Purchaser will assume all of Seller's obligations under the Service Agreements.
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II.
Consideration
2.01 Purchase Price. The purchase price ("Purchase Price") to be paid by
Purchaser to Seller for the sale and conveyance of the Property is ONE HUNDRED
THREE MILLION AND NO/100 U.S. DOLLARS ($103,000,000.00), payable in full in cash
or other readily available funds at the Closing (hereinafter defined).
2.02 Earnest Money. In order to secure Purchaser's performance of this
Agreement, Purchaser shall, within three (3) business days after the Effective
Date of this Agreement, deposit ONE MILLION AND NO/100 U.S. DOLLARS
($1,000,000.00) in cash or other readily available funds with Heritage Title
Company of Austin, Inc. (the "Title Company") at its offices at 401 Congress
Avenue, Suite 1500, Austin, Texas 78701. All cash deposited with the Title
Company pursuant to the terms of this Section 2.02 will be placed in an interest
bearing account approved by the Parties and all such cash, together with all
interest earned thereon is referred to in this Agreement collectively as the
"Earnest Money". Purchaser's delivery of the Earnest Money is a condition
precedent to Seller's obligations under this Agreement and Purchaser's rights
under this Agreement. The Earnest Money will be held and disbursed in accordance
with the terms and provisions of Section 7.05 of this Agreement.
III.
Pre-Closing Matters
3.01 Inspection Period. The period of time following the Effective Date of
this Agreement until the date which is forty-five (45) calendar days after the
Effective Date of this Agreement is referred to in this Agreement as the
"Inspection Period". If Purchaser determines, in Purchaser's sole and absolute
discretion, that the Property is not satisfactory to Purchaser for any reason or
for no reason, then Purchaser may terminate this Agreement by delivering written
notice of such termination to Seller on or before the final day of the
Inspection Period. Without limitation on the foregoing, it is agreed and
understood that the obligations of Purchaser under this Agreement are contingent
upon the following, all of which must occur during the Inspection Period: (a)
Purchaser's inspection and approval of the physical condition of the Property,
the zoning of the Property, and all other aspects of the transaction evidenced
by this Agreement; (b) Purchaser's review and acceptance of all leases,
contracts, studies, surveys and other information pertinent to the operation and
ownership of the Property; (c) Purchaser's review and acceptance of a commitment
for title insurance; (d) Purchaser's review of Seller's existing surveys, if
any, and the preparation (at Purchaser's option and expense) of any new or
updated survey which may be desired by Purchaser. If Purchaser fails, for any
reason, to deliver a written notice of termination to Seller on or before the
final day of the Inspection Period, then all of the contingencies referenced in
this Section 3.01 will be deemed to have been satisfied or waived and
Purchaser's right of termination under this Section 3.01 will be deemed to have
been waived.
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3.02 Property Information. Seller will, within ten (10) calendar days after
the Effective Date of this Agreement, provide to Purchaser copies of surveys,
soils reports, environmental reports and/or other reports relating to the
physical condition of the Property, if and to the extent that such items are in
Seller's actual possession and/or available to Seller at no additional cost (the
"Seller Materials"). The Leases, Service Agreements, Seller Materials, and all
other information and materials furnished by Seller to Purchaser with respect to
the Property are referred to in this Agreement collectively as the "Property
Information". Purchaser agrees and acknowledges that: (a) Purchaser will not
disclose the Property Information or any of the provisions, terms or conditions
thereof, or any information disclosed therein or thereby, to any party outside
of Purchaser's organization, other than Purchaser's lenders, proposed lenders,
consultants, attorneys, engineers and agents involved with Purchaser in the
acquisition of the Property; (b) within Purchaser's organization, the Property
Information will be disclosed and exhibited only to those persons who are
responsible for determining the feasibility of Purchaser's acquisition of the
Property; (c) the Property Information is delivered to Purchaser solely as an
accommodation to Purchaser; (d) Seller has not undertaken any independent
investigation as to the truth, accuracy or completeness of any matters set out
in or disclosed by the Property Information; (e) except as set out in the
"Express Warranties" (as defined in Section 5.01 of this Agreement), Seller has
not made and does not make any warranties or representations of any kind or
nature regarding the truth, accuracy or completeness of the information set out
in or disclosed by the Property Information; (f) except as set out in the
Express Warranties, Seller shall have no liability or culpability of any kind or
nature as a result of providing the Property Information to Purchaser or as a
result of Purchaser's reliance on any of the Property Information or any
information set forth or referred to therein or disclosed thereby; and (g) the
Inspection Period will not be extended in the event of any failure by Seller to
furnish any Property Information which may be required under this Agreement and
Purchaser agrees that Purchaser's sole and exclusive remedy for any failure by
Seller to furnish any Property Information within the time period required for
the delivery of such Property Information under this Agreement will be
Purchaser's right to terminate this Agreement on or before the final day of the
Inspection Period under the terms and provisions of Section 3.01 of this
Agreement.
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3.03 Purchaser Access Rights. Purchaser and Purchaser's employees, agents,
contractors, subcontractors, consultants and other parties operating by, through
or under Purchaser (collectively, the "Purchaser Parties") may enter upon the
Property and conduct such on-site testing and inspections as Purchaser
reasonably desires; provided, however, that: (a) the right of entry hereunder
will terminate automatically upon any termination of this Agreement: (b) any
entry of Purchaser and/or the Purchaser Parties onto the Property is at the sole
risk of Purchaser and the Purchaser Parties; (c) Purchaser hereby releases
Seller from all liabilities, obligations and claims of any kind or nature
arising out of or in connection with the entry of Purchaser and/or the Purchaser
Parties onto the Property INCLUDING WITHOUT LIMITATION ALL LIABILITIES,
OBLIGATIONS AND CLAIMS ARISING OUT OF ANY NEGLIGENCE ON THE PART OF SELLER, IT
BEING EXPRESSLY AGREED AND UNDERSTOOD THAT THIS PROVISION SHALL BE EFFECTIVE TO
RELEASE SELLER FROM CLAIMS ARISING OUT OF SELLER'S OWN NEGLIGENCE; (d) Purchaser
agrees to indemnify and save and hold Seller harmless from and against all
liabilities, obligations, claims and costs of any kind or nature (including
court costs and reasonable attorneys' fees) arising out of or in connection with
any activities of the Purchaser and/or the Purchaser Parties upon or within the
Property INCLUDING WITHOUT LIMITATION ALL LIABILITIES, OBLIGATIONS, CLAIMS AND
COSTS ARISING OUT OF ANY NEGLIGENCE ON THE PART OF SELLER, IT BEING EXPRESSLY
AGREED AND UNDERSTOOD THAT PURCHASER IS AGREEING TO INDEMNIFY SELLER FROM CLAIMS
ARISING OUT OF SELLER'S OWN NEGLIGENCE; (e) neither the Purchaser nor any of the
Purchaser Parties will disturb, interrupt or interfere with any activities of
Seller or Seller's employees, agents, contractors, subcontractors, consultants,
tenants, invitees, licensees or other parties operating by, through or under
Seller (however, Purchaser shall be entitled, subject to compliance with any
applicable requirements under the Leases and subject further to Purchaser
providing Seller written notice at lease three (3) business days in advance and
Seller being able to accompany Purchaser, to enter into and inspect any tenant's
space, which entry shall not be deemed a violation of this section); (f)
Purchaser shall pay when due all costs and expenses related to the activities of
Purchaser and/or the Purchaser Parties upon, within or with respect to the
Property and Purchaser agrees to indemnify and hold and save Seller harmless
from and against all such costs and expenses and all obligations, liabilities,
claims and costs arising in connection therewith, including without limitation
court costs and reasonable attorneys' fees; (g) Purchaser shall not permit any
liens to attach to the Property by reason of any activities of Purchaser or the
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Purchaser Parties; and (h) prior to any entry upon the Property by Purchaser or
by any of the Purchaser Parties, Purchaser must furnish to Seller a certificate
of insurance and evidence of payment of all required insurance premiums for
insurance coverage insuring Seller from and against any and all claims, demands
and actions arising out of any activities of Purchaser and/or any of the
Purchaser Parties. Such insurance must: (i) provide coverage for injury to or
death of any person or persons and damage to or destruction of any property, in
an amount not less than $2,000,000.00, combined single limit; (j) provide
coverage for broad contractual liability in an amount not less than
$2,000,000.00; (k) include a waiver of subrogation in favor of Seller; (l) not
be subject to change or cancellation, except after thirty (30) calendar days
prior written notice to Seller; and (m) be underwritten by a company or
companies reasonably satisfactory to Seller which are fully authorized to
business in the state where the Property is located.
3.04 Purchaser Due Diligence Materials. All studies, reports, analyses,
market information, engineering work product, conceptual plans, conceptual
drawings, architectural renderings, building elevations, construction drawings,
construction plans, construction specifications, landscaping plans, site plans,
site development permits, subdivision plats, and other data, materials and/or
information of any kind or nature which Purchaser or any employee, agent,
representative or consultant of Purchaser generates or acquires in connection
with the Property and/or the transaction evidenced by this Agreement are
referred to herein collectively as the "Purchaser Due Diligence Materials".
Purchaser shall pay all expenses incurred in connection with the Purchaser Due
Diligence Materials and Seller will have no obligation to pay any such expenses.
In addition, Purchaser shall provide copies of all Purchaser Due Diligence
Materials to Seller as and when the same become available, whether during or
after the Inspection Period. If this Agreement is terminated for any reason,
Purchaser will execute any documents and take any and all other action which may
be required to effectuate an absolute assignment of the Purchaser Due Diligence
Materials to Seller free and clear of liens and encumbrances. If this Agreement
is not terminated and if the sale and purchase of the Property closes under the
terms and provisions of this Agreement, then Seller will, upon request by
Purchaser, release and relinquish unto Purchaser any ownership interest which
Seller has in and to the Purchaser Due Diligence Materials, but in such event,
Seller will be entitled to retain copies of the Purchaser Due Diligence
Materials.
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3.05 Proof of Financing. If Purchaser does not terminate this Agreement
during the Inspection Period, then, on or before the final day of the Inspection
Period, Purchaser will provide to Seller evidence in writing of Purchaser's
anticipated sources of equity funds and/or loan funds adequate to allow
Purchaser to close the acquisition of the Property under the terms of this
Agreement.
3.06 Title. Seller shall, within ten (10) calendar days after the Effective
Date of this Agreement, obtain and cause to be delivered to Purchaser: (a) a
title commitment (the "Title Commitment") pursuant to which the Title Company
commits to issue to Purchaser an owners policy of title insurance (and at
Purchaser's election and cost, a mortgagee's title policy in the amount of
Purchaser's purchase money loan), on the standard form promulgated by the
Department of Insurance of the State of Texas, providing title insurance
coverage with respect to the Property in the amount of the Purchase Price (the
"Title Policy"); and (b) copies of all title exception documents which are
referenced in the Title Commitment (the "Title Review Documents"). All items
which are reflected or disclosed on or within the Title Commitment and/or the
Title Review Documents are referred to in this Agreement collectively as the
"Title Review Items".
3.07 The Purchaser Survey Work. Purchaser may, at Purchaser's option,
election and expense, obtain updates to the surveys of the Property, if any,
which are included in the Property Information or obtain a new survey or surveys
with respect to the Property (the "Purchaser Survey Work"). Purchaser will
complete the Purchaser Survey Work within twenty five (25) calendar days after
the date upon which the Title Commitment is delivered to Purchaser (the
"Purchaser's Survey Period"). Prior to the expiration of the Purchaser Survey
Period, Purchaser will deliver to Seller and the Title Company, copies of all
updated and/or new surveys which have been prepared with respect to the
Property. All items which are reflected or disclosed on any survey of the
Property provided to or obtained by Purchaser and all items which should be
reflected or disclosed on a survey of the Property are referred to in this
Agreement collectively as the "Survey Review Items".
3.08 Objections. Purchaser shall complete Purchaser's review of the Title
Review Items and the Survey Review Items during the period of time between the
Effective Date of this Agreement and the date which is ten (10) calendar days
prior to the final day of the Inspection Period (the "Title Review Period").
Purchaser shall, on or before the final day of the Title Review Period, deliver
to Seller written notice of any objections which Purchaser has to the Title
Review Items and/or the Survey Review Items (the "Objections"). Seller shall not
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be obligated to cure any of the Objections, except that Seller shall remove all
monetary liens and encumbrances other than non-delinquent tax liens and liens
which were not created by, through or under Seller or assumed by Seller.
However, if Seller fails or refuses to cure any of the Objections other than
those Objections Seller is required to remove per this section, then Purchaser
may, as Purchaser's sole and exclusive remedy, terminate this Agreement by
delivering a written notice of such termination to Seller on or before the final
day of the Inspection Period. If Purchaser does not deliver to Seller a written
notice of termination of this Agreement on or before the final day of the
Inspection Period, then Purchaser will be deemed have waived all uncured
Objections, if any. The term "Permitted Exceptions" as used in this Agreement
shall mean and refer to all of the exceptions and other matters revealed in or
by the Title Review Items and/or the Survey Review Items, except for any items
which the Title Company has, as of the expiration of the Inspection Period,
agreed to remove from the Title Commitment.
3.09 The Title Policy. Purchaser's obligations under this Agreement are
contingent upon the Title Company being committed, at the Closing, to issue the
Title Policy subject only to the Permitted Exceptions and the terms of such
policy. The Title Policy may be delivered after the Closing if the Title Company
delivers to Purchaser, at or prior to the Closing, an irrevocable commitment in
writing to issue the Title Policy in the form required hereunder.
IV.
Closing
4.01 Closing Date. This transaction shall close at the Title Company's
offices or other location acceptable to the Parties on or before the date which
is thirty (30) calendar days after the final day of the Inspection Period. The
closing of this transaction is herein called "Closing" and the date for Closing
is herein called the "Closing Date". However, Purchaser may elect an earlier
Closing Date subject to providing Seller and Title Company with ten (10) days
written notice of such earlier Closing Date.
4.02 Seller's Closing Obligations. At the Closing, and as a condition to
Purchaser's obligation to close escrow, Seller shall, at Seller's sole cost and
expense:
(a) execute and deliver to Purchaser a special warranty deed in the form
of Exhibit "4.02(a)" attached hereto and incorporated herein by
reference, with all blanks therein completed as necessary and with a
description of the Land attached thereto as Exhibit "A" (the "Deed");
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(b) execute and deliver to Purchaser a bill of sale in the form of
Exhibit "4.02(b)" attached to this Agreement and incorporated herein
by reference, with all blanks therein completed as necessary, with a
description of the Land attached thereto as Exhibit "A" and with a
list of the Personal Property attached thereto as Exhibit "B" (the
"Bill of Sale");
(c) deliver to Purchaser the originals of the Leases, and execute and
deliver to Purchaser an assignment and assumption of leases in the
form of Exhibit "4.02(c)" attached to this Agreement and incorporated
herein by reference, with all blanks therein completed as necessary,
with a description of the Land attached thereto as Exhibit "A" and
with a list of the Leases attached thereto as Exhibit "B" (the
"Assignment and Assumption of Leases");
(d) execute and deliver the Purchaser Sublease to Purchaser, with all
blanks therein completed as necessary, with a copy of the Seller Lease
attached thereto as Exhibit "A" and with a description of the
"Subleased Premises" (as defined therein) attached thereto as Exhibit
"B";
(e) deliver to Purchaser the originals of all Service Agreements, together
with all permits and warranties, if any, which are in Seller's
possession and execute and deliver to Purchaser an assignment and
assumption of service agreements, permits and warranties in the form
of Exhibit "4.02(e)" attached to this Agreement and incorporated
herein by reference, with all blanks therein completed as necessary,
with a description of the Land attached thereto as Exhibit "A" and
with a list of the Service Agreements attached thereto as Exhibit "B"
(the "Assignment and Assumption of Service Agreements, Permits and
Warranties");
(f) deliver to Purchaser physical possession of the Property and the
Personal Property;
(g) execute and deliver to Purchaser a "non-foreign" certificate
sufficient to establish that withholding of tax is not required in
connection with this transaction;
(h) execute and deliver such other documents as are customarily executed
by a seller in connection with the conveyance of similar property in
Travis County, Texas, including all required closing statements,
releases, affidavits, evidences of authority to execute the documents,
certificates of good standing, corporate resolutions and any other
instruments reasonably required by the Purchaser or the Title Company;
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(i) execute and deliver to Purchaser an assignment of Seller's rights
pursuant to the Tenant Improvement Loan (provided, however, that if
Seller has accepted an early payoff of the Tenant Improvement Loan
Amount in its entirety prior to the Closing, then there will be no
assignment of rights with respect to the Tenant Improvement Loan and
provided, further, that if there has been a partial payoff of the
Tenant Improvement Loan Amount prior to Closing, then the assignment
of Seller's rights hereunder will relate only to the Tenant
Improvement Loan Payment Amount which is outstanding at the Closing);
and
(j) As a further condition of Closing, Seller shall use commercially
reasonable efforts to obtain and deliver to Purchaser, prior to the
expiration of the Inspection Period, an estoppel certificate from: (i)
each tenant leasing more than ten thousand (10,000) leasable square
feet; and (ii) not less than tenants representing seventy (70) percent
of the gross leasable area of the remaining tenants (i.e., those
tenants having leasable space of less than 10,000 square feet), as set
forth in the Rent Roll. Each estoppel certificate shall be
substantially in the form of the certificate attached to this
Agreement as Exhibit "4.02(j)" and incorporated herein by reference ,
with all blanks therein completed as necessary and with all
attachments made thereto as necessary (each a "Tenant Certificate").
For any leases shown on the Rent Roll for which a Tenant Certificate
is not provided from Seller to Purchaser, Seller shall provide to
Purchaser a Seller's Certificate, complying with the requirements of
the prior sentence, and signed by Seller. If any Tenant Certificate or
any Seller's Certificate is not on the stipulated form or shows any
material deviation from the matters set forth in the Rent Roll or
indicates any claim of a material breach of landlord under the lease
which is the subject of such Tenant Certificate or such Seller's
Certificate, then Purchaser may, as Purchaser's sole and exclusive
remedy, terminate this Agreement by delivering a written notice of
termination to Seller on or before the final day of the Inspection
Period. If Purchaser does not deliver to Seller a written notice of
termination of this Agreement prior to the expiration of the
Inspection Period, then Purchaser will be deemed to have accepted such
Tenant Certificates and Seller's Certificates as have been provided by
Seller to Purchaser prior to the expiration of the Inspection Period
and Purchaser's right of termination under this Section 4.02(j) shall
be deemed to have been waived by Purchaser.
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4.03 Purchaser's Closing Obligations. At the Closing, Purchaser shall, at
Purchaser's sole cost and expense:
(a) deliver to the Title Company the Purchase Price (less the Earnest
Money), plus the Tenant Improvement Loan Payment Amount plus the full
amount of all expenses and other sums which Purchaser is required to
pay under the terms of this Agreement, all for disbursement in
accordance with the terms and provisions of this Agreement;
(b) execute and deliver to Seller the Deed, the Bill of Sale, the
Assignment and Assumption of Leases, the Purchaser Sublease, and the
Assignment and Assumption of Service Agreements, Permits, and
Warranties; and
(c) execute and deliver such other documents as are customarily executed
by a purchaser in connection with the conveyance of similar property
in Travis County, Texas, including all required closing statements,
releases, affidavits, evidences of authority to execute documents,
certificates of good standing, corporate resolutions, and other
instruments which are reasonably required by the Seller or the Title
Company.
4.04 Closing Costs. Seller and Purchaser each agrees to pay the following
costs at Closing, in addition to any other amounts set forth in this Agreement.
(a) At or prior to the Closing, Seller shall pay: (i) the basic premium
for the Title Policy; (ii) Seller's attorneys' fees; (iii) the cost of
any tax certificates required under the terms of this Agreement; (iv)
all costs incurred in connection with the preparation and recordation
of any releases of existing liens against the Property; (v) one-half
(1/2) of any escrow or closing fee charged in connection with this
Agreement; and (vi) any other closing costs customarily paid by a
seller of similar real property in Travis County, Texas, except as may
be otherwise provided in this Agreement.
(b) At or prior to the Closing, Purchaser shall pay: (i) all charges for
any endorsements to the Title Policy, all charges to modify the area
and boundary exception in the Title Policy, and all inspection fees
and other additional premiums or expenses of any kind or nature
incurred in connection with the Title Policy; (ii) the full amount of
all premiums for any mortgagee's title policy requested by Purchaser,
including charges for any survey endorsement or tax deletion
requested; (iii) all costs and expenses incurred in connection with
the Purchaser Survey Work; (iv) Purchaser's attorneys' fees; (v) all
expenses relating to Purchaser's financing (if any), including any and
all costs, expenses and fees required by Purchaser's lender; (vi) all
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recording fees charged in connection with any documents which are
recorded pursuant to the terms of this Agreement, except for any
releases of liens to be recorded by Seller; (vii) one-half (1/2) of
any escrow fee charged in connection with this Agreement; and (viii)
any other closing costs customarily paid by a purchaser of similar
real property in Travis County, Texas, except as may otherwise be
provided in this Agreement.
4.05 Prorations. The Title Company, in the capacity of escrow agent for the
Parties, will cause to be pro-rated and will prepare estimated closing
statements for Seller's and Purchaser's approval, in connection with the
following items:
(a) All normally and customarily proratable items, including, without
limitation, real estate and personal property taxes ("Taxes"), utility
expenses and rents shall be prorated as of the Closing Date, Seller
being charged and credited for all of the same up to such date and
Purchaser being charged and credited for all of the same on and after
such date.
(b) If the actual amounts to be prorated for Taxes or utility expenses are
not known as of the Closing Date, the prorations of such items shall
be made on the basis of the best information then available, and
within thirty (30) calendar days after the actual amount of such Taxes
or utility expenses are known, adjustments, if needed, will be made
between Seller and Purchaser. Similarly, if it is determined, at any
time within one (1) year after the Closing Date, that any proration
under this Agreement was incorrect when made, then such proration will
be corrected within thirty (30) days after the mistake in proration
under this Agreement is discovered. After the expiration of one (1)
year after the Closing Date, all prorations under this Agreement will
be deemed final and no additional adjustments or corrections to
prorations under this Agreement will be made thereafter.
(c) All deposits held by the providers of utility services to the Property
shall, at Seller's option: (i) be refunded to the Seller by the
appropriate utility providers; or (ii) be assigned to Purchaser and
reimbursed to Seller by Purchaser at the Closing. Purchaser shall be
solely responsible to make arrangements for the continuation of
utility services to the Property, including without limitation, the
obligation to post new utility deposits in the event Seller elects to
obtain a refund of Seller's existing deposits from the providers of
utility services.
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(d) All security deposits paid to Seller under the terms of any existing
leases shall be delivered to Purchaser at the Closing, and Purchaser
will assume all liabilities and obligations of Seller in connection
with such security deposits. All rents collected by Purchaser after
Closing shall first be applied to current rents, and thereafter be
applied to any delinquent rents which relate to periods of time prior
to the Closing, and such delinquent rent payments shall be delivered
promptly by Purchaser to Seller. Seller agrees that Seller will
utilize the same effort to collect delinquent rents under the Leases
as it uses to collect current rents.
(e) The provisions of this Section 4.05 shall survive the Closing.
V.
Warranties, Representations and Notices
5.01 Seller Representations and Warranties. Seller represents and warrants
to Purchaser the following:
(a) Seller is a duly organized and validly existing corporation under the
laws of the State of Texas, with full power and authority to perform
its obligations under this Agreement.
(b) All actions necessary to authorize the execution and delivery of this
Agreement by Seller have been taken and this Agreement constitutes the
legal, valid and binding obligation of Seller, enforceable against
Seller in accordance with its terms. Upon execution, each of the
Seller's closing documents will constitute the legal, valid and
binding obligation of Seller, enforceable against Seller in accordance
with its terms. No consent of any third party is required for Seller
to transfer the Property to Purchaser.
(c) The execution, delivery and compliance with the terms of this
Agreement will not conflict with, or result in a breach of any
agreement to which Seller is a party or by which Seller or the
Property is bound, or any law or order of any court having
jurisdiction over Seller.
(d) Seller is not a "foreign person" within the meaning of Section 1445 of
the U.S. Internal Revenue Code, as amended.
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(e) No act of bankruptcy has occurred with respect to Seller or is
contemplated or being considered by Seller.
(f) Seller has received no notice of any litigation, arbitration or
administrative proceeding (including condemnation or taking by eminent
domain) against Seller or the Property which could materially
adversely affect the Property or Seller's ability to carry out it's
obligations under this Agreement.
(g) Each Lease delivered from Seller to Purchaser is a true and correct
copy of the lease agreement between Seller and such respective tenant.
Except for the Leases, there are no other leases or occupancy or
rental agreements affecting the Property.
(h) Except for the Service Agreements, there are no property management
agreements, landscaping agreements, maintenance agreements or other
agreements of Seller which will survive the Closing and affect the
Property.
The warranties and representations of Seller set out above in this Section 5.01
and the special warranty of title to be including in the Deed are referred to in
this Agreement collectively as the "Express Warranties". Purchaser acknowledges
that Purchaser will independently cause the Property to be inspected on its
behalf during the Inspection Period and that Purchaser has not entered into this
Agreement based upon any representation, warranty, agreement, statement or
expression of opinion by Seller or by any person or entity acting or allegedly
acting for or on behalf of Seller as to the Property or the condition of the
Property. Purchaser agrees that the Property is to be sold to and accepted by
Purchaser at Closing, AS IS, WHERE IS, WITH ALL FAULTS, IF ANY, AND WITHOUT ANY
REPRESENTATIONS OR WARRANTIES WHATSOEVER, EXPRESS OR IMPLIED (other than the
Express Warranties).
5.02 Purchaser Representations and Warranties. Purchaser represents and
warrants to Seller the following:
(a) Purchaser is a duly organized and validly existing corporation under
the laws of the State of Texas, with full power and authority to
perform its obligations under this Agreement.
(b) All actions necessary to authorize the execution and delivery of this
Agreement by Purchaser have been taken and this Agreement constitutes
the legal, valid and binding obligation of Purchaser, enforceable
against Purchaser in accordance with its terms. Upon execution, each
of the Purchaser's closing documents will constitute the legal, valid
and binding obligation of Purchaser, enforceable against Purchaser in
accordance with its terms. No consent of any third party is required
for Purchaser to purchase the Property from Seller.
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(c) The execution, delivery and compliance with the terms of this
Agreement will not conflict with, or result in a breach of any
agreement to which Purchaser is a party or by which Purchaser is
bound, or any law or order of any court having jurisdiction over
Purchaser.
(d) No act of bankruptcy has occurred with respect to Purchaser or is
contemplated or being considered by Purchaser.
(e) Purchaser has received no notice of any litigation, arbitration or
administrative proceeding against Purchaser which could materially
adversely affect Purchaser's ability to carry out it's obligations
under this Agreement.
5.03 Notice Regarding District. Purchaser acknowledges and understands that
a portion of the Property is located in River Place Municipal Utility District
(the "District"). Purchaser understands and acknowledges that the Property will
be conveyed at the Closing subject to assessments and assessment liens in favor
of the District, and Purchaser acknowledges receipt of the notice regarding such
assessments and assessment liens which is attached hereto as Exhibit "5.03" and
is incorporated herein by reference. Purchaser agrees to execute and deliver to
Seller, at the Closing, an additional notice in the form of Exhibit "5.03", with
any modifications which are necessary to incorporate therein any updated or
changed information.
5.04 Notice Regarding Possible Annexation. If the property that is the
subject of this contract is located outside the limits of a municipality, the
property may now or later be included in the extraterritorial jurisdiction of a
municipality and may now or later be subject to annexation by the municipality.
Each municipality maintains a map that depicts its boundaries and
extraterritorial jurisdiction. To determine if the property is located within a
municipality's extraterritorial jurisdiction or is likely to be located within a
municipality's extraterritorial jurisdiction, contact all municipalities located
in the general proximity of the property for further information.
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VI.
Condemnation and Casualty
6.01 Condemnation. The obligations of Seller and Purchaser to close the
sale of the Property shall not be affected by any condemnation proceedings or by
any pending or threatened condemnation proceedings. However, at the Closing, the
Purchase Price shall be reduced by the amount of any condemnation proceeds which
have been received by Seller with respect to the Property between the Effective
Date of this Agreement and the Closing Date and, in addition, Seller will assign
to Purchaser all of Seller's rights to any condemnation proceeds which are
payable to Seller, but have not yet been received by Seller, in connection with
any condemnation of the Property occurring between the Effective Date of this
Agreement and the Closing Date.
6.02 Casualty. The obligations of Seller and Purchaser to close the sale
and purchase of the Property shall not be affected by any fire or other
casualty. However, at the Closing, the Purchase Price will be reduced by the
amount of: (i) any insurance proceeds which have been received by Seller with
respect to any fire or casualty occurring at the Property between the Effective
Date of this Agreement and the Closing Date; and (ii) the deductible amount
under such insurance policy. In addition, Seller will assign to Purchaser all of
Seller's rights to any insurance proceeds which are payable to Seller, but have
not yet been received by Seller, in connection with any fire or other casualty
occurring at the Property between the Effective Date of this Agreement and the
Closing Date.
VII.
Remedies
7.01 Purchaser's Default and Seller's Remedies: If Purchaser fails or
refuses to timely comply with Purchaser's obligations under this Agreement or is
unable to do so as the result of Purchaser's act or failure to act, then Seller
may, as Seller's sole and exclusive remedy, either: (a) terminate this Agreement
and (i) recover or retain the Earnest Money as liquidated damages for the
failure or refusal by Purchaser to close the purchase of the Property
("Acquisition Default"), (ii) recover damages with respect to any failure by
Purchaser to comply with Purchaser's Post Termination Obligations, and/or
enforce specific performance of Purchaser's Post Termination Obligations, and
(iii) recover from Purchaser all costs and expenses, including reasonable
attorney's fees, incurred in connection with the recovery or retention of the
Earnest Money and/or in connection with the enforcement of Purchaser's Post
Termination Obligations or the collection of damages arising out of any
violation thereof; or (b) enforce specific performance of Purchaser's
obligations under this Agreement. In the event of an Acquisition Default by
Purchaser, the Earnest Money will be delivered to or retained by Seller as
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liquidated damages, and not a penalty, in full satisfaction of Seller's claims
against Purchaser with respect to the Acquisition Default only. The recovery or
retention of the Earnest Money by Seller will not limit Seller's right to
exercise the remedies outlined in subparts (ii) and (iii) of clause (a) set out
in the first sentence of this Section 7.01. Seller and Purchaser agree that it
is difficult to determine the actual amount of Seller's damages arising out of
an Acquisition Default by Purchaser, but the amount of the Earnest Money is a
fair estimate of those damages which has been agreed to by the Parties in a
sincere effort to make the damages certain.
7.02 Seller's Default and Purchaser's Remedies.
(a) If Seller fails or refuses to timely comply with Seller's obligations
under this Agreement, and if Purchaser is not in default of any of
Purchaser's obligations under this Agreement, then Purchaser may, as
Purchaser's sole and exclusive remedy, either: (i) terminate this
Agreement by giving Seller timely written notice of such election
prior to or at Closing; or (ii) enforce specific performance of
Seller's obligations under this Agreement if and only if Purchaser
complies with all of the preconditions and requirements set out in
Section 7.02(b) hereinbelow. In addition to the foregoing, Purchaser
may recover from Seller all reasonable costs and expenses, including
reasonable attorneys' fees, incurred in connection with Purchaser's
enforcement of Seller's obligations under this Agreement or the
recovery of the Earnest Money deposited by Purchaser under this
Agreement. Except as set out in the immediately preceding sentence,
Purchaser will not be entitled to recover any damages from Seller.
(b) Notwithstanding any provision in this Agreement to the contrary, it is
specifically agreed and understood that Purchaser will not have the
right to enforce specific performance of Seller's obligations under
this Agreement or to place a lis pendens on the Property or otherwise
encumber the Property in any way until and unless: (i) Purchaser
timely tenders full performance under this Agreement by delivering to
the Title Company, on or before the Closing Date, fully executed
originals of all documents required to be executed by Purchaser under
the terms and provisions of this Agreement, together with cash or
other readily available funds, or an "Acceptable Financing Commitment"
(hereinafter defined), or a combination of cash or other readily
available funds and an "Acceptable Financing Commitment" in an amount
sufficient to cover the Purchase Price plus all expenses which are
required to be paid by Purchaser under the terms and provisions of
this Agreement; (ii) despite such tender of full performance by
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Purchaser at the Closing, Seller fails or refuses to close the
transaction evidenced by this Agreement; and (iii) Purchaser
institutes, within thirty (30) calendar days after the Closing Date,
an action under the arbitration agreement referenced in Section 7.06
of this Agreement (the "Arbitration Agreement"), seeking to enforce
specific performance of Seller's obligations under this Agreement.
Purchaser will be considered to have provided an "Acceptable Financing
Commitment" only if Purchaser provides evidence to the Arbitrators
which the Arbitrators determine is adequate to establish that the
written financing commitment provided by Purchaser: (i) is issued by a
lending institution which has adequate financial strength and adequate
readily available funds to satisfy its obligations under the financing
commitment; and (ii) is prepared in form and with content providing
adequate assurance of availability of funds for the closing of the
sale and purchase of the Property (and in this regard, it is expressly
agreed and understood that the obligations of the lender under such
financing commitment may not be subject to any conditions or
requirements other than the closing of the sale and purchase of the
Property).
7.03 Notice and Opportunity to Cure. For purposes of this Agreement, the
term "Non-Curable Default" shall mean and refer to: (a) any default by Purchaser
to deliver the Earnest Money on a timely basis as required under this Agreement;
and/or (b) any failure by Purchaser to deliver to the Title Company, on or
before the Closing Date, all funds, documents and other items necessary to close
the transaction under this Agreement. In the event of any default under this
Agreement (other than a Non-Curable Default) by either Party (the "Defaulting
Party") the other Party (the "Non-Defaulting Party") will not exercise any of
such Non-Defaulting Party's rights or remedies under this Agreement until and
unless the Non-Defaulting Party has provided to the Defaulting Party a written
notice of the default or defaults of the Defaulting Party (the "Default Notice")
and the Defaulting Party has failed to cure the default or defaults specified in
the Default Notice within ten (10) calendar days after the date of the
Non-Defaulting Party's delivery of the Default Notice. In the event of any
Non-Curable Default by Purchaser, Seller may, at Seller's option and election,
afford notice and opportunity to cure to Purchaser, but it is expressly agreed
and understood that Seller has no duty to afford any such notice or opportunity
to cure to Purchaser. Rather, Seller may, if Seller so elects, exercise any
right or remedy which Seller may have with respect to any Non-Curable Default,
without necessity of providing to Purchaser any notice or opportunity to cure.
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7.04 Purchaser's Post Termination Obligations. If this Agreement is
terminated for any reason (either by Purchaser or by Seller), then Purchaser
shall: (a) restore the Property to the condition which existed prior to any
inspections, tests or other activities of Purchaser and/or any of the Purchaser
Parties, to the maximum extent that such restoration is reasonably practical and
to the extent that such restoration is not reasonably practical, Purchaser will
compensate Seller for any damage to the Property); (b) return to Seller all
studies, reports, surveys and other documents or information of any kind or
nature which have been provided by Seller to Purchaser; (c) deliver the
Purchaser Due Diligence Materials to Seller; (d) execute and deliver to Seller
an instrument assigning to Seller (without warranty or recourse) all of
Purchaser's rights, title and interest to the Purchaser Due Diligence Materials,
authorizing Seller to contact any third parties who generated the Purchaser Due
Diligence Materials, and containing an express agreement pursuant to which
Purchaser agrees not to release or discuss any of the Purchaser Due Diligence
Materials to or with any person without the prior express written consent of
Seller; (e) remove all liens against the Property which have arisen due to any
activities of Purchaser or any of the Purchaser Parties; (f) indemnify and hold
Seller harmless from and against any and all liabilities, obligations, claims
and costs of any kind or nature (including court costs and reasonable attorneys'
fees) arising out of or in connection with any activities of the Purchaser
and/or the Purchaser Parties upon or within the Property INCLUDING WITHOUT
LIMITATION ALL LIABILITIES, OBLIGATIONS, CLAIMS AND COSTS ARISING OUT OF ANY
NEGLIGENCE ON THE PART OF SELLER, IT BEING EXPRESSLY AGREED AND UNDERSTOOD THAT
PURCHASER IS AGREEING TO INDEMNIFY SELLER FROM CLAIMS ARISING OUT OF SELLER'S
OWN NEGLIGENCE; and (g) reimburse Seller for all expenses, costs and liabilities
of any kind or nature (including without limitation attorneys' fees and court
costs) incurred by Seller in connection with the enforcement of any of the
obligations of Purchaser under this Section 7.04 and/or in connection with the
performance by Seller of any of the obligations of Purchaser under this
Section 7.04. The obligations of Purchaser under this Section 7.04 are referred
to in this Agreement collectively as the "Post Termination Obligations".
Notwithstanding any provision in this Agreement to the contrary, the Post
Termination Obligations shall survive any termination of this Agreement, and the
Post Termination Obligations shall not (regardless of any liquidated damages
provisions in this Agreement) be deemed to be satisfied in whole or in part by
the delivery to Seller of all or any portion of the Earnest Money.
7.05 Disposition of the Earnest Money.
(a) Notwithstanding any provision in this Agreement to the contrary, the
provisions in this Agreement relating to the Earnest Money shall
survive any termination of this Agreement.
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(b) If the sale and purchase of the Property is consummated under the
terms and provisions of this Agreement, then the Earnest Money will be
credited and applied against the cash sums which are payable by
Purchaser at the Closing.
(c) If Purchaser terminates this Agreement under the terms and provisions
of Section 3.01 of this Agreement, then the Earnest Money will be
promptly disbursed to Purchaser after Purchaser has satisfied all of
Purchaser's Post Termination Obligations.
(d) If Purchaser terminates this Agreement under the terms and provisions
of Section 3.08 of this Agreement, then the Earnest Money will be
promptly disbursed to Purchaser after Purchaser has satisfied all of
Purchaser's Post Termination Obligations.
(e) If Purchaser terminates this Agreement under the terms and provisions
of Section 4.02(j) of this Agreement, then the Earnest Money will be
promptly disbursed to Purchaser after Purchaser has satisfied all of
Purchaser's Post Termination Obligations.
(f) If Seller terminates this Agreement under the terms and provisions of
Section 7.01 of this Agreement, then the Earnest Money will be
promptly disbursed to Seller after such termination.
(g) If Purchaser terminates this Agreement under the terms and provisions
of Section 7.02 of this Agreement, then the Earnest Money will be
promptly disbursed to Purchaser after such termination.
(h) If Seller terminates this Agreement under the terms and provisions of
Section 10.18 of this Agreement, then the Earnest Money, if any, will
be promptly disbursed to Purchaser after such termination.
7.06 Arbitration. In order to resolve any disputes which may arise under
this Agreement and/or under any of the documents which are executed in
connection with this Agreement, Seller and Purchaser are, simultaneously
herewith, entering into an "Arbitration Agreement" in the form of Exhibit "7.06"
attached hereto and incorporated herein by reference.
7.07 WAIVER OF JURY TRIAL. THE PARTIES BOTH HEREBY KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY WAIVE ALL OF THEIR RESPECTIVE RIGHTS TO TRIAL BY JURY WITH
RESPECT TO ANY AND ALL DISPUTES OF ANY KIND OR NATURE WHICH ARE BASED ON OR
WHICH ARISE OUT OF OR IN CONNECTION WITH: (A) THIS AGREEMENT; OR (B) ANY
DOCUMENT, INSTRUMENT OR OTHER AGREEMENT WHICH IS EXECUTED OR IS CONTEMPLATED TO
- 21 -
BE EXECUTED IN CONNECTION WITH THIS AGREEMENT; OR (C) ANY COURSE OF CONDUCT,
COURSE OF DEALING, STATEMENT (WHETHER VERBAL OR WRITTEN) OR ACTION OF EITHER
PARTY WHICH RELATES TO, CONCERNS OR ARISES OUT OF OR IN CONNECTION WITH THIS
AGREEMENT OR ANY DOCUMENT, INSTRUMENT OR OTHER AGREEMENT EXECUTED OR
CONTEMPLATED TO BE EXECUTED IN CONNECTION WITH OF THIS AGREEMENT. THE FOREGOING
WAIVER SHALL APPLY TO ANY AND ALL LITIGATION OF ANY KIND OR NATURE, WHETHER IN
CONTRACT OR TORT, AT LAW OR IN EQUITY, AND WHETHER RELATED TO ANY DIRECT CLAIM,
COUNTERCLAIM, CROSS CLAIM OR THIRD PARTY CLAIM. EACH PARTY CERTIFIES TO THE
OTHER PARTY THAT NO REPRESENTATIVE, AGENT OR COUNSEL OF THE OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR IMPLICITLY, TO SUCH PARTY THAT THE OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THIS WAIVER. NO REPRESENTATIVE,
AGENT OR COUNSEL OF EITHER PARTY HAS THE AUTHORITY TO WAIVE, CONDITION OR MODIFY
THIS WAIVER OF JURY TRIAL. EITHER PARTY MAY FILE A COPY OF THIS SECTION 7.07
WITH ANY COURT AS CONCLUSIVE EVIDENCE THAT BOTH PARTIES HAVE WAIVED THEIR RIGHTS
TO TRIAL BY JURY. THIS WAIVER OF JURY TRIAL IS A MATERIAL INDUCEMENT FOR THE
PARTIES TO ENTER INTO THIS AGREEMENT.
7.08 Enforcement Costs: In the event of any dispute between the Parties
arising out of or in connection with this Agreement, the prevailing Party in
such dispute shall be entitled to recover from the non-prevailing Party all of
the prevailing Party's costs and expenses in connection with such dispute,
including without limitation court costs, expert witness fees and reasonable
attorney's fees.
VIII.
Notices
8.01 Delivery of Notices. Any notice, communication, request, reply or
advice (severally and collectively referred to as "Notice") in this Agreement
provided or permitted to be given, made or accepted by either Party to the other
must be in writing. Notice may, unless otherwise provided herein, be given or
served: (a) by depositing the same in the United States Mail, certified, with
return receipt requested, addressed to the Party to be notified and with all
charges prepaid; or (b) by depositing the same with Federal Express or another
service guaranteeing "next day delivery", addressed to the Party to be notified
and with all charges prepaid; or (c) by delivering the same to such Party, or an
agent of such Party by telecopy or by hand delivery. Notice deposited in the
United States mail in the manner hereinabove described shall be deemed effective
from and after the earlier of the date of actual receipt or three (3) calendar
days after the date of such deposit. Notice given in any other manner shall be
effective only if and when received by the Party to be notified. For the
purposes of notice, the addresses of the Parties shall, until changed as
provided below, be as follows:
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Seller: Investors Life Insurance Company of North America
River Place Pointe I
6500 River Place Blvd.
Austin, Texas 78730
Attn: Mr. Tim Casey
Telecopy No.: (512) 404-5212
with copies to: Investors Life Insurance Company of North America
River Place Pointe I
6500 River Place Blvd.
Austin, Texas 78730
Attn: Mr. Theodore A. Fleron
Telecopy No.: (512) 404-5051
Investors Life Insurance Company of North America
River Place Pointe I
6500 River Place Blvd.
Austin, Texas 78730
Attn: Mr. Bruce Boisture
Telecopy No.: (512) 404-5129
Armbrust & Brown, L.L.P.
100 Congress Ave., Ste. 1300
Austin, Texas 78701
Attn: David B. Armbrust
Telecopy No.: (512) 435-2360
and
Armbrust & Brown, L.L.P.
100 Congress Ave., Ste. 1300
Austin, Texas 78701
Attn: Samuel D. Byars
Telecopy No.: (512) 435-2360
Purchaser: Aspen Growth Properties, Inc.
8799 Balboa Avenue #270
San Diego, California 92123
Attn: Mr. John Tworoger
Telecopy No.: (858) 268-0337
with copy to: Mr. Dietmar Schott
8799 Balboa Avenue #265
San Diego, California 92123
Telecopy No.: (858) 268-0337
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The Parties hereto shall have the right from time to time to change their
respective addresses, and each shall have the right to specify as its address
any other address within the United States of America by at least five (5)
calendar days written notice to the other Party.
IX.
Real Estate Commissions
9.01 Real Estate Commissions.
(a) Seller and Purchaser acknowledge and agree that the only brokers who
have been involved with the origination and negotiation of this
Agreement are C.B. Richard Ellis, Inc. and FIC Realty Services, Inc.
(the "Brokers"). If, as, and when this Agreement closes and Seller
receives the Purchase Price in good funds, but not otherwise, Seller
agrees to pay: (i) a real estate sales commission to C.B. Richard
Ellis, Inc. in an amount equal to one-half of one percent of the
Purchase Price; and (ii) a real estate sales commission to FIC Realty
Services, Inc. in an amount equal to one-half of one percent of the
Purchase Price.
(b) The above referenced real estate sales commissions will be deemed
earned only if and when the Closing occurs under this Agreement. If
this Agreement fails to close for any reason, including a breach by
either Party, Seller shall have no obligation to pay to Brokers the
above referenced real estate sales commissions or any other
compensation, costs, expenses, fees or other sums of any kind or
nature. Without limitation on the generality of the foregoing, it is
expressly agreed and understood that the Brokers will not be entitled
to any real estate sales commissions if the Parties agree to rescind
or terminate this Agreement.
(c) Seller and Purchaser each represents and warrants to the other that,
other than the real estate sales commissions payable to the Brokers as
specified hereinabove, there are no real estate sales commissions
payable to any person or entity in connection with the transaction
evidenced by this Agreement. Seller and Purchaser agree to hold
harmless, defend, and indemnify each other from any and all claims,
suits, liabilities, losses, costs, and expenses (including reasonable
attorneys' fees and court costs) resulting from any claims made by any
broker, agent, finder, or salesman for any real estate sales
commission or other compensation, reimbursement or payment of any kind
or nature which is alleged to be owed based upon an agreement with the
indemnifying party.
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(d) The Brokers are not parties to this Agreement. This Agreement may be
amended or terminated without notice to or the consent of the Brokers.
The absence of Brokers' signatures shall not in any way affect the
validity of this Agreement or any amendment to this Agreement.
(e) Purchaser understands and hereby acknowledges that neither the Brokers
nor any agents operating by, through or under the Brokers have any
authority to bind Seller to any warranties or representations
regarding the Property, and further acknowledges that Purchaser has
not relied upon any warranties or representations of the Brokers or
any agents operating by, through or under the Brokers in Purchaser's
decision to purchase the Property.
(f) Purchaser acknowledges that Purchaser has been advised by the Brokers,
to have an abstract of title on the Property examined by an attorney
or else to acquire an owner's policy of title insurance on the
Property.
(g) The obligations of the Parties contained in this Section 9.01 shall
survive the Closing or any termination of this Agreement.
X.
Miscellaneous Provisions
10.01 Survival of Covenants: All of Seller's and Purchaser's obligations,
representations, warranties, covenants and agreements set out in this Agreement
or in any of the documents executed or to be executed at Closing, shall survive
the Closing and shall not be merged therein.
10.02 Entire Agreement. This Agreement contains the entire agreement of the
Parties hereto. There are no other agreements, oral or written, between the
Parties regarding the Property and this Agreement can be amended only by written
agreement signed by the Parties hereto, and by reference made a part hereof.
10.03 Binding Effect. This Agreement, and the terms, covenants, and
conditions herein contained, shall be covenants running with the land and shall
inure to the benefit of and be binding upon the heirs, personal representatives,
successors, and assigns of each of the Parties hereto.
10.04 Effective Date. The Effective Date of this Agreement and other
similar references herein are deemed to refer to the date on which this
Agreement has been fully executed, initialed, if applicable, and dated by both
Seller and Purchaser.
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10.05 Time. Time is of the essence in all things pertaining to the
performance of this Agreement. All references in this Agreement to specific
times shall mean and refer to local time in Austin, Texas.
10.06 Business Days. For purposes of this Agreement, the term "business
day" or "business days" shall mean and refer to all calendar days, other than
Saturdays, Sundays and days on which banks are required or permitted to close in
the State of Texas. If any deadline set forth in this Agreement falls on a day
which is not a business day or if any period of time provided for in this
Agreement ends on a day which is not a business day, then the applicable
deadline or period shall be extended to the first succeeding day which is a
business day.
10.07 Assignment.
(a) Purchaser shall not have the right to assign its interest under this
Agreement without Seller's prior written consent. Seller's consent
shall not be unreasonably withheld, conditioned or delayed in
connection with any assignment by Purchaser to a limited partnership
in which Purchaser is the general partner, and/or to an individual
investor affiliated with Purchaser to facilitate an "Exchange"
(hereinafter defined) for such individual (which individual will own
an equity interest in Purchaser or the entity formed by Purchaser). In
all other instances, Seller's consent may be withheld, conditioned or
delayed for any reason in Seller's sole discretion. In the event
Purchaser makes a permitted assignment of its rights under this
Agreement, Purchaser shall not be released from any of its obligations
under this Agreement.
(b) In addition to the above, each Party may assign its rights under this
Agreement to a qualified intermediary to effect an exchange of real
property under Section 1031 of the U.S. Internal Revenue Code, as
amended ("Exchange"). Each Party agrees to cooperate with the other
Party in completing the Exchange, and each Party reserves the right to
convert this transaction to an Exchange at any time before the Closing
Date. Seller and Purchaser agree, however, that consummation of the
transaction contemplated by this Agreement is not predicated or
conditioned on completion of such an Exchange by either Party. If a
Party does elect to complete an Exchange, the other Party shall
execute all escrow instructions, documents, agreements, or instruments
reasonably requested by the first Party to complete the Exchange;
provided, however, that the other Party shall incur no additional
liabilities, expenses, or costs as a result of or connected with such
Exchange, nor shall the Closing under this Agreement be delayed or
otherwise affected by the Exchange.
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10.08 Severability. If any provision of this Agreement is illegal, invalid,
or unenforceable under present or future laws, then, and in that event, it is
the intention of the Parties hereto that the remainder of this Agreement shall
not be affected thereby, and it is also the intention of the Parties to this
Agreement that in lieu of each provision of this Agreement that is illegal,
invalid, or unenforceable, there be added as a part of this Agreement a
provision as similar in terms to such illegal, invalid, or unenforceable
provision as may be possible, and be legal, valid, and enforceable.
10.09 Waiver. Any failure by a Party hereto to insist, or any election by a
Party hereto not to insist, upon strict performance by the other Party of any of
the terms, provisions, or conditions of this Agreement shall not be deemed to be
a waiver thereof or of any other term, provision, or condition hereof, and such
Party shall have the right at any time or times thereafter to insist upon strict
performance of any and all of the terms, provisions, and conditions hereof.
10.10 Applicable Law and Venue. The construction and validity of this
Agreement shall be governed by the laws of the State of Texas. Venue shall be in
a court of appropriate jurisdiction in Travis County, Texas.
10.11 Paragraph Headings. The paragraph headings contained in this
Agreement are for convenience only and shall in no way enlarge or limit the
scope or meaning of the various and several paragraphs hereof.
10.12 Grammatical Construction . Wherever appropriate, the masculine gender
may include the feminine or neuter, and the singular may include the plural, and
vice versa.
10.13 No Recordation. Seller and Purchaser hereby acknowledge that neither
this Agreement nor any memorandum, affidavit or other instrument evidencing this
Agreement or relating hereto (other than the closing documents contemplated
hereunder) shall ever be recorded in the Real Property Records of Travis County,
Texas, or in any other public records. Should Purchaser ever record or attempt
to record any such instrument, then, notwithstanding any provision herein to the
contrary, such recordation or attempted recordation shall constitute a default
by Purchaser hereunder, and, in addition to the other remedies provided for
herein: (i) Purchaser shall be personally liable to Seller for any damages
incurred by Seller as a result of such recordation or attempted recordation,
together with all attorney's fees and other costs and expenses of any kind or
nature incurred by Seller as a result of such recordation or attempted
recordation; and (ii) Seller shall have the express right to terminate this
Agreement by filing a notice of said termination in the Real Property Records of
Travis County, Texas.
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10.14 Force Majeure. If either Party is delayed or prevented from
performing any of its obligations under this Agreement (other than the
obligation to pay any sum of money) by reason of strikes, lockouts, labor
troubles, work stoppages, shortages of materials, transportation delays, failure
of power, riots, insurrections, war, acts of God, floods, storms, weather
(including delays due to rain or wet ground), fire or other casualty, or any
other cause beyond such Party's control, the period of such event, plus the
period of delay caused by such event, shall be deemed to be added to the time
period herein provided for the performance any such obligation by the applicable
Party.
10.15 Confidentiality. Purchaser agrees to keep the terms and provisions of
this Agreement and all other information relating to the Property confidential
in accordance with the letter agreement regarding "confidential information"
which Seller and Purchaser have previously entered into. Purchaser understands
and acknowledges that Seller is a publicly traded corporation and that Seller
may be required to make public disclosures of this Agreement and the terms and
provisions of this Agreement. Seller has the full right and authority to make
any and all disclosures or announcements regarding this Agreement as Seller may
desire, in Seller's sole and absolute discretion.
10.16 Exculpation. Notwithstanding any provision in this Agreement to the
contrary, it is agreed and understood that Purchaser shall look solely to the
assets of Seller in the event of any breach or default by Seller under this
Agreement. This Agreement is executed by an officer of Seller (the "Signing
Officer") solely in the Signing Officer's capacity as a representative of the
Seller and not in the Signing Officer's own individual capacity. Purchaser
hereby releases and relinquishes the Signing Officer from any and all personal
liability for any matters or claims of any kind which arise under or in
connection with or as a result of this Agreement.
10.17 Execution. To facilitate execution, this instrument may be executed
in any number of counterparts as may be convenient or necessary, and it shall
not be necessary that the signatures of all Parties be contained in any one
counterpart hereof. Additionally, the Parties hereto hereby covenant and agree
that, for purposes of facilitating the execution of this instrument: (i) the
signature pages taken from separate individually executed counterparts of this
instrument may be combined to form multiple fully executed counterparts; and
(ii) a facsimile signature or a signature sent by electronic mail shall be
deemed to be an original signature for all purposes. All executed counterparts
of this instrument shall be deemed to be originals, but all such counterparts,
when taken together, shall constitute one and the same agreement.
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10.18 Acceptance Deadline. The execution of this Agreement by Seller shall
constitute an offer by Seller to sell the Property to Purchaser on the terms and
conditions stated in this Agreement. In order for Purchaser to effectively
accept Seller's offer, Purchaser must, prior to 5:00 p.m., Austin, Texas time,
on March 18, 2005 (the "Acceptance Deadline"): (a) properly and fully execute
this Agreement without any modifications or changes; (b) deliver at least one
(1) original counterpart of such fully executed and unmodified version of this
Agreement to Seller; (c) deliver a copy of such fully executed and unmodified
version of this Agreement to the Title Company; and (d) deliver the Earnest
Money to the Title Company in cash or other readily available funds. If
Purchaser does not comply with the foregoing requirements prior to the
Acceptance Deadline, then (regardless of whether Purchaser later complies with
the foregoing requirements) Seller shall have the right at any time after the
Acceptance Deadline to terminate this Agreement by delivering a written notice
of such termination to Purchaser. If Seller terminates this Agreement under the
terms of this Section 10.18, then the Earnest Money shall (if the same has been
delivered to the Title Company or to Seller ) be returned to Purchaser and
thereafter neither Party will have any further rights or remedies under this
Agreement.
EXECUTED by the undersigned on the dates set forth hereinbelow.
SELLER: INVESTORS LIFE INSURANCE COMPANY OF
NORTH AMERICA, a Texas corporation
By: /s/ J. Bruce Boisture
Printed Name: J. Bruce Boisture
Title: Chairman & CEO
Date:
PURCHASER: ASPEN GROWTH PROPERTIES, INC.,
a Texas corporation
By: /s/ John M. Tworoger
John M. Tworoger, President
Date:
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