1
EXHIBIT 2.2
AGREEMENT OF PURCHASE AND SALE
(American Industrial Properties REIT/Lend Lease Portfolio)
This Agreement of Purchase and Sale ("Agreement") is made and entered into by
and between Purchaser and Seller as of November ____, 2000 (the "Effective
Date").
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: Collectively, American Industrial
Properties REIT, a Texas real
estate investment trust ("AIP"),
AIP/Battlefield GP, Inc., a Texas
corporation, AIP-SWAG Operating,
L.P., a Texas limited partnership,
AIP Properties #3, L.P., a
Delaware limited partnership, AIP
Operating, L.P., a Delaware
limited partnership
1.1.2 Purchaser: Value Enhancement Fund IV, L.P., a
Georgia limited partnership
1.1.3 Purchase Price: $292,200,000.00, less a credit for
the principal amount of the
Existing Loans assumed by
Purchaser at Closing and as
adjusted to reflect the prorations
provided for herein, allocated
between the Projects pursuant to a
separate written agreement between
the parties.
1.1.4 Earnest Money: Irrevocable Letters of Credit in
the aggregate amount of
$3,000,000.00 (the "Earnest
Money") deposited in accordance
with Section 3.1 below.
Page 1
2
1.1.5 Title Company: Commonwealth Title Insurance Company
1700 Pacific Avenue, Suite 4740
Dallas, Texas 75201
Attention: Mr. David Payne and
Ms. Amanda Johnson
Telephone: (214) 855-8400
Facsimile: (214) 754-9066
1.1.6 Escrow Agent: Commonwealth Title Insurance Company
1700 Pacific Avenue, Suite 4740
Dallas, Texas 75201
Attention: Mr. David Payne and
Ms. Amanda Johnson
Telephone: (214) 855-8400
Facsimile: (214) 754-9066
1.1.7 Closing Date: The date which is fifteen (15)
days after the date of the AIP
shareholder meeting at which the
requisite AIP Shareholder Approval
is obtained, but not to be later
than January 31, 2001; provided,
however, either Seller or
Purchaser may extend the Closing
Date until May 31, 2001 (the
"Outside Closing Date"), by giving
written notice to the other party
of such election no later than
January 31, 2001, in the event the
Shareholder Approval is not
obtained and/or the Manhattan
Towers Project Closing and/or the
DDR Closing (all as further
described in Article 7) have not
occurred on or prior to January
31, 2001.
1.2 CLOSING COSTS. Closing costs shall be allocated and paid as
follows:
COST RESPONSIBLE PARTY
- ---- -----------------
Title Commitment required to be delivered pursuant to Section 5.1 Purchaser
Premium for standard form Title Policy required to be delivered pursuant to Purchaser
Section 5.2
Premium for any upgrade of Title Policy for extended or additional coverage Purchaser
Purchaser and any endorsements 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 or recertifications thereto Purchaser
Costs for UCC Searches Purchaser
Recording Fees Purchaser
Page 2
3
Any loan assumption and/or prepayment Purchaser, subject to a maximum
penalties, fees and costs required cost of 1.25% of the aggregate
pursuant to the applicable loan principal amount of all the
documents Existing Loans as of the date of
Closing, with Seller paying any
applicable costs in excess of such
amount; provided, however, if
Purchaser elects not to assume the
Existing Loans payable to Aegon
Life Insurance Company or
Nationwide Life Insurance Company
totaling approximately
$118,183,000.00, Purchaser shall
be fully responsible for the
excess of any prepayment
penalties, charges or yield
maintenance amounts relating to
those loans over the loan
assumption fees and costs that
would have been payable if
Purchaser had assumed those loans,
notwithstanding that maximum cost
cap.
Any deed taxes, documentary stamps, Purchaser
transfer taxes, intangible taxes,
mortgage taxes or other similar
taxes, fees or assessments
Any escrow fee charged by Escrow Purchaser
Agent for holding the Earnest
Money or conducting the Closing
All other closing costs, expenses, Purchaser
charges and fees
Each party shall be responsible Seller/Purchaser
for all costs and expenses
incurred by or on behalf of such
party
Cost of obtaining AIP Shareholder Seller
Approval
Cost of Seller's Asset Manager's Seller
Fees through Closing
1.3 NOTICE ADDRESSES:
Purchaser: c/o Lend Lease Real Estate Copy to: King & Spalding
Investments, Inc. 191 Peachtree Street
3424 Peachtree Road, NE, Suite 800 Atlanta, Georgia 30303-1763
Atlanta, Georgia 30326 Attn: William B. Fryer, Esq.
Attention: Mr. Mark Bratt Telephone: (404) 572-4911
Telephone: (404) 848-8600 Facsimile: (404) 572-5148
Facsimile: (404) 848-8930
Page 3
4
and to: Lend Lease Real Estate
Investments, Inc.
3424 Peachtree Road, N.E.
Suite 800
Atlanta, Georgia 30326
Attn: Mr. James P. Ryan
Telephone: (404) 848-8600
Facsimile: (404) 848-8925
Seller: c/o American Industrial Copy to: Locke Liddell & Sapp LLP
Properties REIT 100 Congress Ave., Suite 300
6210 N. Beltline Road, Suite 170 Austin, Texas 78701
Irving, Texas 75063 Attention: Brad B. Hawley, Esq.
Attention: Mr. Lew Friedland and Telephone: (512) 305-4706
Tony Koeijmans, Esq. Facsimile: (512) 305-4800
Telephone: (972) 756-6000
Facsimile: (972) 756-0704
and to: Thompson & Knight, P.C.
1700 Pacific Avenue,
Suite 3300
Dallas, Texas 75201
Attention: Jack M. Little, Esq.
Telephone: (214) 969-1363
Facsimile: (214) 969-1751
1.4 INDEX OF CERTAIN ADDITIONAL DEFINED TERMS:
Acceptable Estoppel Certificate.......................Subsection 9.2.6
Acquisition Proposal.......................................Section 7.6
Agreement.....................................................Preamble
Asset Manager............................................Section 14.17
Assignment............................................Subsection 9.3.2
Capital Expenditure Schedule..........................Subsection 6.1.3
Casualty Notice............................................Section 6.2
CERCLA....................................................Section 13.3
Chase....................................................Section 14.17
Closing....................................................Section 9.1
Commission Schedule..................................Subsection 11.1.5
DDR........................................................Section 7.4
Deed..................................................Subsection 9.3.1
Designated Representative(s).............................Section 14.17
Effective Date................................................Preamble
Existing Loans........................................Subsection 4.1.2
Hazardous Materials.......................................Section 13.4
Improvements..........................................Subsection 2.1.1
Independent Consideration..................................Section 3.2
Intangible Personal Property..........................Subsection 2.1.4
Land..................................................Subsection 2.1.1
Lease Files..........................................Subsection 4.1.15
Page 4
5
Leases................................................Subsection 2.1.2
Lender Assumption Documents...........................Subsection 9.4.2
Loan Documents........................................Subsection 4.1.2
Major Tenants.........................................Subsection 9.2.6
Manhattan Towers Project...................................Section 7.3
Material Damage.......................................Subsection 6.2.1
New Exceptions.............................................Section 5.4
Operating Statements..................................Subsection 4.1.3
Permitted Exceptions.......................................Section 5.3
Permitted Outside Parties..................................Section 4.6
Project...............................................Subsection 2.1.1
Property; Properties.......................................Section 2.1
Property Information.......................................Section 4.1
Real Property.........................................Subsection 2.1.1
Reports....................................................Section 4.4
SEC........................................................Section 7.2
Service Contracts.....................................Subsection 4.1.8
Shareholder Approval.......................................Section 7.1
Shareholder Proposal.......................................Section 7.2
Subsidiaries...............................................Section 7.6
Superior Acquisition Proposal..............................Section 7.6
Survey.....................................................Section 5.2
Tangible Personal Property............................Subsection 2.1.3
Taxes.....................................................Section 10.1
Tenant Receivables...................................Subsection 10.1.3
Title Commitment...........................................Section 5.1
Title Policy...............................................Section 5.2
Unbilled Tenant Receivables.......................Subsection 10.1.3(a)
Uncollected Delinquent Tenant Receivables.........Subsection 10.1.3(a)
ARTICLE 2 - PROPERTY
2.1 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" or the "Properties"):
2.1.1 REAL PROPERTY. The parcels of land described in Exhibit
A attached hereto (collectively, the "Land"), together with (i) all
improvements located thereon (collectively, the "Improvements"), (ii) all and
singular the rights, benefits, privileges, easements, tenements, hereditaments,
and appurtenances thereon or in anywise appertaining thereto, and (iii) 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 such Land (collectively, the "Real Property"). The separately named
facilities located on the Real Property are listed in Exhibit A-1 attached
hereto (each a "Project").
2.1.2 LEASES. All of Seller's right, title and interest in
all leases of the Real Property, including leases which may be made by Seller
after the Effective Date and prior to Closing as permitted by this Agreement
(the "Leases"), and also including Seller's rights under all guaranties,
letters of credit
Page 5
6
or other instruments that guarantee or secure the performance of the
obligations of tenants under the Leases.
2.1.3 TANGIBLE PERSONAL PROPERTY. All of Seller's right,
title and interest in the equipment, machinery, furniture, furnishings,
supplies and other tangible personal property, if any, owned by Seller and now
or hereafter located on and used in connection with the operation, ownership or
management of the Real Property including, without limitation, the items
described on Exhibit B attached hereto and incorporated herein by reference,
but specifically excluding any items of personal property owned by tenants at
or on the Real Property and further excluding any items of personal property
owned by third parties and leased to Seller (collectively, the "Tangible
Personal Property").
2.1.4 INTANGIBLE PERSONAL PROPERTY. All of Seller's right,
title and interest, if any, in all intangible personal property related to the
Real Property and the Improvements, including, without limitation all of
Seller's right, title and interest in: all trade names and trade marks
associated with the Real Property and the Improvements, including Seller's
rights and interests, if any, in the name of the Real Property; the plans and
specifications and other architectural and engineering drawings for the
Improvements, if any (to the extent assignable); warranties (to the extent
assignable); contract rights related to the construction, operation, ownership
or management of the Real Property, if any (but only to the extent assignable
and Seller's obligations thereunder are expressly assumed by Purchaser pursuant
to this Agreement); governmental permits, approvals and licenses, if any (to
the extent assignable); and telephone exchange numbers (to the extent
assignable) (collectively the "Intangible Personal Property").
ARTICLE 3 - EARNEST MONEY
3.1 DEPOSIT OF EARNEST MONEY. Purchaser has previously deposited a
$1,000,000.00 letter of credit in escrow with Escrow Agent. Within two (2)
business days after the Effective Date, Purchaser shall deposit an additional
$2,000,000.00 letter of credit in the same form as the $1,000,000.00 letter of
credit in escrow with Escrow Agent.
3.2 INDEPENDENT CONSIDERATION. On the Effective Date, Purchaser shall
pay 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, and shall
not be applied against the Purchase Price.
3.3 FORM; FAILURE TO DEPOSIT. The Independent Consideration 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
deliver the Independent Consideration or the $2,000,000.00 letter of credit as
required, Seller may terminate this Agreement by written notice to Purchaser,
in which event 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 EARNEST MONEY. The Earnest Money shall not be
applied as a credit to the Purchase Price at Closing, but shall be returned to
Purchaser at Closing. In the event of a termination of this Agreement by either
Seller or Purchaser for any reason, Escrow Agent is authorized to deliver the
Earnest 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 Earnest Money. In such
event, Escrow Agent may interplead the Earnest Money into a court of competent
jurisdiction in the county in which the Earnest
Page 6
7
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 against whom judgment is rendered in the action, or
if judgment is rendered in part against both parties, then in the proportions
the court determines.
ARTICLE 4 - DUE DILIGENCE
4.1 DUE DILIGENCE MATERIALS PREVIOUSLY DELIVERED OR MADE
AVAILABLE. Purchaser acknowledges receipt of and/or access to what Purchaser
understands to be the following (the "Property Information") on or before the
Effective Date:
4.1.1 RENT ROLL. Rent rolls including lists of security
deposits (collectively, the "Rent Roll") for the Property current as of
September 30, 2000;
4.1.2 LOAN DOCUMENTS. Copies of all documents (the "Loan
Documents") which evidence or secure the loans (the "Existing Loans")
encumbering the Property as identified on Exhibit F attached hereto and
incorporated herein by references.
4.1.3 FINANCIAL INFORMATION. Copies of operating statements
and a summary of capital expenditures pertaining to the Property for the twelve
(12) months preceding the Effective Date of this Agreement or such lesser
period as Seller has owned each applicable Property (the "Operating
Statements");
4.1.4 LEASE FORM. Copies of Seller's current standard lease
form for each Project;
4.1.5 ENVIRONMENTAL REPORTS. Copies of all environmental
reports or site assessments related to the Property prepared for the benefit of
Seller or in Seller's possession;
4.1.6 TAX STATEMENTS. Copies of all ad valorem tax statements
relating to the Property for the most current available tax period and for the
last two (2) years;
4.1.7 TITLE AND SURVEY. Copies of all of title insurance
information and surveys of the Property in Seller's possession;
4.1.8 SERVICE CONTRACTS. A list, together with copies, of
all service, supply, equipment rental, and other service contracts related to
the operation of the Property ("Service Contracts");
4.1.9 PERSONAL PROPERTY. A list of Tangible Personal
Property;
4.1.10 ENGINEERING REPORTS. Copies of any engineering and
other physical improvement inspection reports relating to the Property in the
possession of Seller.
4.1.11 BROKERAGE AGREEMENTS. Copies of all leasing and
other brokerage agreements relating to the Property in the possession of
Seller.
4.1.12 MANAGEMENT AGREEMENTS. Copies of all management
agreements relating to the Property in the possession of Seller.
Page 7
8
4.1.13 BUDGET. A copy of Seller's budget for operations for
the Property for the current year.
4.1.14 INSURANCE DOCUMENTS. Certificates of insurance and
copies of policies currently in effect with respect to each Project, and a
description of claims in excess of $50,000.00 made within the last two (2)
years and the status of such claims.
4.1.15 LEASE FILES. The lease files for all tenants, including
the Leases, amendments, guaranties, any letter agreements and assignments which
are in effect when made available ("Lease Files");
4.1.16 MAINTENANCE RECORDS AND WARRANTIES. Maintenance work
orders for the twelve (12) months preceding the Effective Date of this
Agreement and warranties, if any, on roofs, air conditioning units, fixtures
and equipment;
4.1.17 PLANS AND SPECIFICATIONS. Building plans and
specifications relating to the Property; and
4.1.18 LICENSES, PERMITS AND CERTIFICATES OF OCCUPANCY.
Licenses, permits and certificates of occupancy relating to the Property.
4.2 PHYSICAL DUE DILIGENCE. Until the Closing, Purchaser shall have
reasonable access to the Property at all reasonable times during normal
business hours, upon appropriate notice to tenants as permitted or required
under the Leases, for the purpose of conducting reasonably necessary tests,
including surveys and architectural, engineering, geotechnical and
environmental inspections and tests, provided that (i) Purchaser must give
Seller forty-eight (48) hours' prior telephone or written notice of any such
inspection or test, and with respect to any intrusive inspection or test (e.g.,
core sampling) must obtain Seller's prior written consent (which consent may
not be unreasonably withheld, conditioned or delayed), (ii) prior to performing
any inspection or test, Purchaser must deliver a certificate of insurance to
Seller evidencing that Purchaser and its contractors, agents or representatives
have in place not less than $1,000,000.00 (on a per occurrence basis) of
comprehensive general liability insurance for its activities on the Property
covering any accident arising in connection with the presence of Purchaser, its
contractors, agents and representatives on the Property, which insurance shall
name AIP and Asset Manager as additional insureds thereunder, and (iii) 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 and shall be responsible for and act as the
generator with respect to any wastes generated by those tests. Subject to the
provisions of Section 4.6 hereof, Purchaser or Purchaser's representatives may
meet with any tenant with respect to such tenant's Lease; provided, however,
Purchaser must contact Seller at least forty-eight (48) hours in advance by
telephone or fax to inform Seller of Purchaser's intended meeting and to allow
Seller the opportunity to attend such meeting if Seller desires. Subject to the
provisions of Section 4.6 hereof, Purchaser or Purchaser's representatives may
meet with any governmental authority for any good faith, reasonable purpose in
connection with the transaction contemplated by this Agreement; provided,
however, Purchaser must contact Seller at least forty-eight (48) hours in
advance by telephone or fax to inform Seller of Purchaser's intended meeting
and to allow Seller the opportunity to attend such meeting if Seller desires.
4.3 DUE DILIGENCE. Purchaser acknowledges that prior to the Effective
Date, Purchaser has (i) examined, inspected, and investigated the Property
Information and the Property and, in Purchaser's sole and absolute judgment and
discretion based upon Purchaser's knowledge as of the Effective Date, has
determined that the Property is acceptable to Purchaser, subject to the express
terms and conditions of
Page 8
9
this Agreement, (ii) obtained all necessary internal approvals, and (iii)
satisfied all other contingencies of Purchaser subject, however, to the
conditions to Closing as set forth in this Agreement. Purchaser also
acknowledges that, as far as Purchaser is aware, Purchaser has received or had
access to all Property Information and Purchaser has conducted all inspections
and tests of the Property that it considers important prior to the Effective
Date.
4.4 RETURN OF DOCUMENTS AND REPORTS. If this Agreement terminates for
any reason, Purchaser shall promptly return and/or deliver to Seller all
Property Information in Purchaser's possession and copies thereof.
Additionally, if this Agreement terminates for any reason other than Seller's
default, then Purchaser must deliver to Seller copies of all third party
reports, investigations and studies, other than economic analyses, attorney
work product or other legally privileged articles of information (collectively,
the "Reports" and, individually, a "Report") prepared for Purchaser in
connection with its due diligence review of the Property; provided, however,
Purchaser shall not be required to make any such deliveries unless and until
Purchaser has received all payments due from Seller, if any, pursuant to
Section 7.5. 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, and Seller shall have no right to rely on
any Report without the written consent of the party preparing same. Purchaser's
obligation to deliver the Property Information and the Reports to Seller shall
survive the termination of this Agreement.
4.5 SERVICE CONTRACTS. Purchaser has advised Seller in writing of
which Service Contracts it will assume and which Service Contracts Purchaser
requires that Seller deliver written termination at or prior to Closing. Seller
agrees to cause all management agreements to provide for termination without
cause and without penalties payable by Purchaser upon thirty (30) days' prior
written notice. Seller shall deliver at Closing notices of termination of all
Service Contracts required by Purchaser to be terminated. Purchaser must assume
the obligations arising from and after the Closing Date under those Service
Contracts that Purchaser has agreed to assume.
4.6 PROPRIETARY INFORMATION; CONFIDENTIALITY. Purchaser acknowledges
that the Property Information is proprietary and confidential and has been
delivered to Purchaser solely to assist Purchaser in determining the
feasibility of purchasing the Property. Purchaser shall not use the Property
Information for any purpose other than as set forth in the preceding sentence.
Purchaser shall not disclose the contents to any person other than to those
persons who are responsible for determining the feasibility of or are otherwise
involved in Purchaser's acquisition of the Property and who have agreed to
preserve the confidentiality of such information as required hereby
(collectively, "Permitted Outside Parties"). Purchaser shall not divulge the
contents of the Property Information or other information except in strict
accordance with the confidentiality standards set forth in this Section 4.6. In
permitting Purchaser to review the Property Information 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.
4.7 NO REPRESENTATION OR WARRANTY BY SELLER. Purchaser acknowledges
that, except as expressly set forth in this Agreement, neither Seller nor Asset
Manager has made nor makes any warranty or representation regarding the truth,
accuracy or completeness of the Property Information or the source(s) thereof.
Purchaser further acknowledges that some if not all of the Property Information
was prepared by third parties other than Seller and Asset Manager. Except as
expressly set forth in this Agreement, 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 Information, or in any other written or oral communications
transmitted or made available to Purchaser. Purchaser shall rely solely upon
(i) satisfaction of Purchaser's conditions expressly set forth in
Page 9
10
this Agreement, (ii) Seller's compliance with the terms and provisions of this
Agreement, and (iii) Purchaser's 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.
Seller has not undertaken any independent investigation as to the truth,
accuracy or completeness of the Property Information.
4.8 PURCHASER'S RESPONSIBILITIES. In conducting any inspections,
investigations or tests of the Property and/or Property Information after the
Effective Date, Purchaser and its agents and representatives shall: (i) not
unreasonably disturb the tenants or interfere with their use of the Property
pursuant to or in breach of the terms of their respective Leases; (ii) not
unreasonably interfere with the operation and maintenance of the Property;
(iii) not damage any part of the Property or any personal property owned or
held by any tenant or any third party; (iv) not injure or otherwise cause
bodily harm to Seller, Asset Manager, or their respective agents, guests,
invitees, contractors and employees or any tenants or their guests or invitees;
(v) comply with all applicable laws; (vi) promptly pay when due the costs of
all tests, investigations, and examinations done with regard to the Property;
(vii) not permit any liens to attach to the Property by reason of the exercise
of Purchaser's rights hereunder; (viii) repair any damage to the Property
resulting directly or indirectly from any such inspection or tests; and (ix)
not reveal or disclose prior to Closing any information obtained during
Purchaser's inspection activities with respect to the Property prior to the
Effective Date concerning the Property and the Property Information to anyone
other than the Permitted Outside Parties, in accordance with the
confidentiality standards set forth in Section 4.6 above, or except as may be
otherwise required by law.
4.9 PURCHASER'S AGREEMENT TO INDEMNIFY. Purchaser indemnifies and
holds Seller and Asset Manager 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 the Exclusive Negotiation Agreement between
AIP and Lend Lease Real Estate, Inc. dated June 27, 2000 or any violation of
the provisions of Sections 4.2, 4.6 or 4.8; provided, however, the indemnity
shall not extend to protect Seller from any pre-existing liabilities for
matters merely discovered by Purchaser (e.g., latent environmental
contamination) so long as Purchaser's actions are conducted with reasonable
care in accordance with industry standards. 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 must provide to Seller,
immediately following the receipt of same by Purchaser, 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 are conducted with reasonable care in accordance with industry
standards.
Page 10
11
ARTICLE 5 - TITLE AND SURVEY
5.1 TITLE COMMITMENT. Purchaser has caused to be prepared and
delivered to Seller on or before the Effective Date: (i) current commitment(s)
for title insurance or preliminary title report (collectively, the "Title
Commitment") issued by the Title Company, in the aggregate amount of the
Purchase Price, with Purchaser as the proposed insured, and (ii) copies of all
documents of record referred to in the Title Commitment as exceptions to title
to the Property.
5.2 NEW OR UPDATED SURVEY. Purchaser may elect to obtain new surveys
or revise, modify, or re-certify any existing surveys (collectively, the
"Survey") as necessary in order for the Title Company to delete the survey
exception from any title policy (the "Title Policy") Purchaser elects to obtain
from the Title Company or to otherwise satisfy Purchaser's objectives.
5.3 TITLE REVIEW. Prior to the Effective Date, Purchaser has reviewed
title to the Property as disclosed by the Title Commitment and the Survey.
Seller shall have no obligation to cure title objections except financing liens
created by, under or through Seller that are not being assumed by Purchaser,
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
financing liens. Seller further agrees to remove any exceptions or encumbrances
to title which are created by, under or through Seller after the effective date
of each applicable Title Commitment without Purchaser's prior written consent
(if requested, such consent shall not be unreasonably withheld, conditioned or
delayed). The term "Permitted Exceptions" shall mean: the specific exceptions
(excluding exceptions that are part of the applicable promulgated title
insurance form) in the Title Commitment that the Title Company has not agreed
to remove from the Title Commitment as of the Effective Date and that Seller is
not required to remove as provided above; matters created by, through or under
Purchaser; items shown on the Survey; real estate taxes not yet due and
payable; rights of tenants as tenants only under the Leases; and any licensees
under any Service Contracts not terminated as of Closing in accordance with the
provisions hereof.
5.4 NEW EXCEPTIONS. Purchaser may have Seller's title to the Property
re-reviewed at any time and from time to time up to the Closing and may give
Seller written notice of any additional title exceptions which first appear of
record after the effective date of each applicable Title Commitment ("New
Exceptions"). Seller shall, if requested by Purchaser, (i) cause any such
exception created by, through or under Seller without Purchaser's written
consent (in its sole discretion) to be removed prior to the Closing and (ii)
use good faith, commercially reasonable efforts to remove any other New
Exceptions prior to the Closing. If any such New Exception is not removed prior
to Closing and will have a material adverse effect on the use and operation of
the applicable Project, in Purchaser's reasonable judgment, Purchaser may elect
either (a) in the case of an exception described in clause (i) above, to close
and receive credit against the Purchase Price equal to the lesser of (A) the
cost of curing such title objection or (B) any diminution in value, determined
by an independent third party appraiser, resulting from or likely to result
from such title objection, or (b) to terminate this Agreement as to the
affected Project, in which event the Purchase Price will be reduced by the
allocated Purchase Price of the affected Project, and the parties shall have no
further rights, duties or obligations hereunder with respect to such Project
except for those obligations which by their terms survive termination of this
Agreement. In addition, if Purchaser elects to terminate this Agreement as to a
certain Project as a result of one or more New Exceptions affecting such
Project, and such affected Project is a part of a cross-collateralized debt
pool and the relevant lender or lenders will not permit such Project to be
removed from the pool at no cost to Purchaser, Purchaser may elect to terminate
this Agreement as to all Properties, in which event the Earnest Money shall be
returned to Purchaser and the parties shall have no further rights, duties or
Page 11
12
obligations hereunder except for those obligations which by their terms survive
termination of this Agreement.
ARTICLE 6 - OPERATIONS AND RISK OF LOSS
6.1 ONGOING OPERATIONS. From the Effective Date through Closing,
Seller hereby covenants and agrees that:
6.1.1 LEASES SERVICE CONTRACTS AND LOAN DOCUMENTS. Seller
will perform its material obligations under the Leases, Service Contracts and
Loan Documents, including payment of all accrued and outstanding tenant
improvement and leasing commission costs relating to Leases in existence as of
the Effective Date.
6.1.2 NEW CONTRACTS. Except as provided in Subsection 6.1.4,
Seller will not enter into any contract that will be an obligation affecting
the Property 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 thirty (30) days' prior
notice, and which shall be terminated by Seller at Closing at no cost to
Purchaser, unless assumed by Purchaser at Purchaser's election made in writing
to Seller at least ten (10) days prior to Closing.
6.1.3 MAINTENANCE OF IMPROVEMENTS; REMOVAL OF PERSONAL
PROPERTY. Subject to Sections 6.2 and 6.3, Seller shall continue to make its
budgeted capital expenditures with respect to the Improvements in a
commercially reasonable manner in the ordinary course of Seller's business as
provided in the schedule attached hereto as Exhibit H and incorporated herein
by reference (the "Capital Expenditure Schedule"), and operate and maintain the
Property in the ordinary course of business and consistent with past practice.
Seller will not remove any Tangible Personal Property except as may be required
for necessary repair or replacement, and replacement shall be of approximately
equal quality and quantity as the removed item of Tangible Personal Property.
6.1.4 LEASING. Seller will continue to lease space in the
Improvements in the ordinary course of business; provided Purchaser must
approve any new Lease and will do so within five (5) business days of Seller's
delivery of the material terms of any proposed new Lease and financial
information on the proposed tenant that Seller is permitted to share with third
parties, or Purchaser's approval thereof shall be deemed to have been given.
Purchaser shall not unreasonably withhold or delay approval of any new Lease.
With respect to any new Lease that is approved or deemed approved by Purchaser
or with respect to the exercise by a tenant under an existing Lease of renewal
or expansion rights currently provided for in the applicable Lease which
renewal or expansion becomes effective after the Effective Date, Purchaser
shall be responsible for all third party tenant improvement and leasing
commission costs associated with such new Lease, renewal or expansion. For
purposes hereof, a "new Lease" shall also mean a renewal of an existing Lease
or expansion of space covered by an existing Lease that is not currently
provided for in the Lease documents evidencing the existing Lease.
6.1.5 MAINTENANCE OF INSURANCE. Seller shall maintain the
property insurance currently in effect with respect to the Property through the
last day prior to the Closing Date at no cost to Purchaser.
6.2 DAMAGE. If prior to Closing any Project is damaged by fire or
other casualty, Seller shall promptly notify Purchaser of the casualty and
estimate the cost to repair and the time required to
Page 12
13
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 at least four (4) Projects or any portion of at least four (4)
Projects prior to Closing, Purchaser may, at its option, terminate this
Agreement as to either all of the affected Projects or all of the Properties by
delivering written notice to Seller on or before the expiration of thirty (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-day period to make such election and to obtain insurance settlement
agreements with Seller's insurers). Upon any termination as to the affected
Projects instead of all of the Properties, the Purchase Price shall be reduced
by the allocated portion of the Purchase Price for the applicable Projects ,
and the parties hereto shall have no further rights or obligations hereunder as
to the affected Projects, other than those that by their terms survive the
termination of this Agreement. If Purchaser elects to terminate as to all of
the Properties, the Earnest Money shall be returned to Purchaser and the
parties shall have no further rights, duties or obligations hereunder except
for the obligations which by their terms survive termination of this Agreement.
Notwithstanding the foregoing, in the event Purchaser elects to terminate this
Agreement as to four (4) or more Projects due to Material Damage occurring to
the Properties, Seller shall have the option to terminate this Agreement as to
all Properties, in which event the Earnest Money shall be returned to Purchaser
and the parties shall have no further rights, duties or obligations hereunder
except for the obligations which by all of the terms survive termination of
this Agreement. In the event of Material Damage or destruction of three (3) or
fewer Projects or if Purchaser elects not to terminate this Agreement as to at
least four (4) affected Projects as detailed above within said thirty (30) day
period, then the parties shall proceed under this Agreement and close on
schedule, 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 (including any rent loss
insurance applicable to any period on and after the Closing Date) due Seller as
a result of such damage or destruction, 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. For the
purposes of this Agreement, "Material Damage" and "Materially Damaged" means
damage which, in Seller's reasonable estimation, exceeds $500,000.00 to repair
or which, in Seller's reasonable estimation, will take longer than ninety (90)
days to repair.
6.2.2 NOT MATERIAL. If any Project is damaged but not
Materially Damaged, then neither Purchaser nor Seller shall have the right to
terminate this Agreement as to the affected Project, and Seller shall, at its
option, either (i) repair the damage before the Closing in a manner reasonably
satisfactory to Purchaser, or (ii) assign to Purchaser all of Seller's proceeds
from insurance payable by reason of such damage, plus pay an amount to
Purchaser for any deductible, less any amount expended by Seller for repairs
made with Purchaser's approval (in which case Purchaser shall assume full
responsibility for all needed repairs).
6.3 CONDEMNATION. If proceedings in eminent domain are instituted with
respect to any Project comprising the Property or any portion thereof which
involves the taking of a portion of the Property exceeding $500,000.00 in
value, Purchaser and Seller shall have the same rights and obligations as
provided in Subsection 6.2.1 with respect to a casualty event affecting the
Property. Provided, if Purchaser is obligated or, if applicable, elects to
proceed under this Agreement, 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.
Page 13
14
ARTICLE 7 - SHAREHOLDER OBLIGATIONS; OTHER SELLER COVENANTS
7.1 SHAREHOLDER APPROVAL. Purchaser acknowledges that the transactions
contemplated by this Agreement are subject to the approval of the holders of a
two-thirds majority of the outstanding common shares of AIP ("Shareholder
Approval"). AIP agrees to use good faith and make commercially reasonable
efforts to obtain such Shareholder Approval as soon as practicable. On the
Effective Date, AIP shall deliver to Purchaser voting agreements from the
institutional shareholder designated members of AIP's Board of Trust Managers
who are eligible to vote and support the approval of the transaction
contemplated herein who hold shares and their respective institutional
affiliates which are shareholders of AIP, pursuant to which the signatories to
such voting agreements have agreed to vote in favor of the transactions
contemplated by this Agreement, subject to rights parallel to Seller's rights
hereunder with respect to a Superior Proposal (defined below).
7.2 PROXY STATEMENT. In furtherance, and not in limitation of the
foregoing, as soon as practicable after the execution of this Agreement using
good faith and commercially reasonable efforts, Seller shall finalize and file
with the United States Securities And Exchange Commission (the "SEC") a
preliminary proxy statement in accordance with the applicable rules and
regulations promulgated under the Securities Exchange Act of 1934 and
thereafter shall file as soon as is practicable a definitive proxy statement.
The proxy statement shall include a proposal to approve the transactions
contemplated in this Agreement (the "Shareholder Proposal") and shall include
the recommendation of AIP's Board of Trust Managers in favor of the proposal.
Seller shall use good faith and commercially reasonable efforts to respond to
any comments of the SEC and to cause the proxy statement to be mailed to AIP's
shareholders as promptly as practicable. Purchaser shall furnish all
information concerning Purchaser as AIP may reasonably request in connection
with such actions and the preparation of the proxy statement.
7.3 MANHATTAN TOWERS. In connection with the transactions contemplated
by this Agreement, Seller is attempting to sell as a project owned by Seller
known as the Manhattan Towers Project and located in Manhattan Beach,
California (the "Manhattan Towers Project") for a gross purchase price of at
least $48,000,000.00. Seller shall use good faith and commercially reasonable
efforts to cause the sale of the Manhattan Towers Project to occur on such
terms and prior to or contemporaneously with Closing.
7.4 DDR CLOSING. In connection with the transactions contemplated by
the Agreement, AIP intends to cause Developers Diversified Realty Corporation
("DDR") to acquire AIP, generally in accordance with the term sheet to which
DDR and AIP are parties. Seller shall use good faith and commercially
reasonable efforts to cause the merger with a subsidiary of DDR (or such other
structure as agreed upon by DDR and AIP which results in DDR owning AIP) to
occur contemporaneously with Closing.
7.5 BREAK UP FEE; REIMBURSEMENT. If (i) notwithstanding Seller's good
faith efforts, Seller does not (A) obtain Shareholder Approval on or before the
Outside Closing Date, or (B) cause the closing of the sale of the Manhattan
Towers Project to occur prior to or contemporaneously with Closing, or (C)
cause the closing of DDR's acquisition of the outstanding shares of AIP to
occur contemporaneously with Closing, and as a result of (A) or (B) or (C),
Seller elects or is required to terminate this Agreement; or (ii) following the
Effective Date, Seller receives a Superior Acquisition Proposal and as a result
of the fiduciary obligations of the board of trust managers of AIP, as
determined in good faith in consultation with outside counsel, Seller
determines to, and does, terminate this Agreement (which Seller shall hereby be
entitled to do); or (iii) the transactions contemplated by this Agreement are
not consummated because the conditions set forth in Section 9.2 are not
satisfied as a result of a default by Seller hereunder; or (iv) Seller does not
obtain Shareholder Approval on or before the Outside Closing Date, Seller shall
pay to
Page 14
15
Purchaser a break up fee of $3,000,000.00, and will reimburse Purchaser for the
actual and verifiable out-of-pocket costs, including legal fees actually
incurred by Purchaser or its affiliates, including Lend lease Real Estate
Investments, Inc., in connection with the transactions contemplated by this
Agreement, not to exceed $450,000.00 in the aggregate. Seller agrees to make
the election to terminate or not terminate this Agreement due to a termination
of AIP's merger agreement with DDR outlined in (C) above within fourteen (14)
days of any such termination of the merger agreement with DDR, or Seller shall
be deemed to have elected to waive such termination right and proceed to
Closing under the remaining applicable terms and conditions specified in this
Agreement. This Section 7.5 shall survive termination of this Agreement.
7.6 NON-SOLICITATION. After the Effective Date and prior to the
termination of this Agreement in accordance with its terms, Seller agrees that:
(a) neither it nor any officer, director, employee,
representative, advisor or agent of Seller or any business entity under its
direct control (collectively, the "Subsidiaries") shall initiate, solicit or
knowingly encourage, directly or indirectly, any inquiries or the making or
implementation of any proposal or offer (including, without limitation, any
proposal or offer to its shareholders) with respect to a merger, acquisition,
tender offer, exchange offer, consolidation, sale of assets or similar
transaction involving all or any significant portion of the assets or equity
securities of Seller or any of the Subsidiaries, other than the transactions
contemplated by this Agreement, the DDR merger agreement and the Manhattan
Towers agreement (any such proposal or offer being hereinafter referred to as
an "Acquisition Proposal") or engage in any negotiations concerning or provide
any confidential information or data to, or have any discussions with, any
person relating to an Acquisition Proposal, or otherwise facilitate any effort
or attempt to make or implement an Acquisition Proposal;
(b) it shall direct and use its reasonable best efforts to
cause its officers, board of trust managers, employees, agents and financial
advisors not to engage in any of the activities described in Section 7.6(a)
except to the extent expressly permitted by the proviso below;
(c) it will immediately cease and cause to be terminated any
existing activities, discussions or negotiations with any parties conducted
heretofore with respect to any of the foregoing; and
(d) it will notify Purchaser promptly if Seller receives any
such inquiries or proposals, or any requests for such information, or if any
such negotiations or discussions are sought to be initiated or continued with
it;
provided, however, that nothing contained in this Agreement shall prohibit the
board of trust managers of AIP (or the officers, board of trust managers of
AIP, employees, agents or financial advisors of Seller acting at the direction
of the board of trust of managers of AIP) from (i) furnishing information to or
entering into discussions or negotiations with, any person or entity that makes
an unsolicited Acquisition Proposal, if, and only to the extent that (x) the
board of trust managers of AIP determines in good faith following consultation
with counsel and with Seller's financial advisors that such action is required
for the board of trust managers of AIP to comply with its duties to
shareholders imposed by law or such proposal is a Superior Acquisition Proposal
(as hereinafter defined), (y) prior to furnishing such information to, or
entering into discussions or negotiations with, such person or entity, Seller
provides written notice to Purchaser to the effect that it is furnishing
information to, or entering into discussions with, such person or entity, and
(z) subject to any confidentiality agreement with such person or entity, Seller
keeps Purchaser informed of the status (not the terms) of any such discussions
or negotiations; or
Page 15
16
(ii) to the extent applicable, taking and disclosing to Seller's shareholders a
position contemplated by Rules 14d-9 and 14e-2 promulgated under the Exchange
Act with regard to an Acquisition Proposal. Nothing in this Section 7.6 shall
(1) permit Seller to terminate this Agreement (except as specifically provided
in Article 7 hereof), (2) permit Seller to enter into an agreement with respect
to an Acquisition Proposal during the term of this Agreement (other than a
confidentiality agreement in customary form executed as provided above) or (3)
affect any other obligation of Seller under this Agreement; provided, however,
that the board of trust managers of AIP may, subject to the provisions of
Section 7.5, approve and recommend a Superior Acquisition Proposal and, in
connection therewith, withdraw or modify its approval or recommendation of this
Agreement. Any disclosure that the board of trust managers of AIP may be
compelled to make with respect to the receipt of an Acquisition Proposal in
order to comply with its duties to shareholders of Seller or comply with
applicable law will not constitute a violation of this Section 7.6. As used
herein, "Superior Acquisition Proposal" means a bona fide Acquisition Proposal
made by a third party which the board of trust managers of AIP (or a duly
constituted committee thereof charged with considering Acquisition Proposals)
determines in good faith following consultation with counsel and with Seller's
financial advisors to be more favorable to Seller's shareholders from a
financial point of view than the transactions contemplated herein and which the
board of trust managers of AIP (or any such committee) determines is reasonably
capable of being financed and consummated.
ARTICLE 8 - EXISTING LOANS
Subject to Section 9.2.4, Purchaser shall either (i) acquire the Properties
subject to the Existing Loans, subject to the limitations on recourse set forth
in the documents evidencing or securing such loans, in which case Purchaser
shall assume such Existing Loans at Closing ; or (ii) the Existing Loans shall
be paid at Closing. Purchaser agrees to promptly notify Seller of Purchaser's
election to not assume any Existing Loan for which Purchaser's assumption has
been approved by the applicable lender. Purchaser and Seller shall cooperate in
good faith and use their commercially reasonable efforts to negotiate with the
relevant lenders prior to the Closing Date to: (i) obtain the required lender
consents to Purchaser's proposed assumptions; (ii) minimize prepayment and
assumption fees and charges; (iii) obtain favorable terms of assumption for any
loans contemplated to be assumed; and (iv) obtain estoppel statements from
applicable lenders.
ARTICLE 9 - CLOSING
9.1 CLOSING. The consummation of the transaction contemplated herein
("Closing") shall occur on the Closing Date at the offices of Locke Liddell &
Sapp LLP, 2200 Ross Avenue, Suite 2200, Dallas, Texas 75201 (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, completion or
waiver 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.
9.2 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:
9.2.1 REPRESENTATIONS AND WARRANTIES. The other party's
representations and warranties contained herein shall be true and correct in
all material respects as of the date of this Agreement and the Closing Date
provided, however, the representation contained in Subsection 11.1.2
Page 16
17
will be deemed satisfied at Closing provided no injunction is in place issued
by a court of competent jurisdiction prohibiting the Closing from occurring;
9.2.2 DELIVERIES, COVENANTS, OBLIGATIONS. As of the
Closing Date, the other party shall have tendered all deliveries to be made at
Closing and complied with all covenants and obligations herein to be complied
with on or prior to Closing;
9.2.3 ACTIONS, SUITS, ETC. There shall exist no pending
action, suit, arbitration, claim, attachment, proceeding, assignment for the
benefit of creditors, insolvency, bankruptcy, reorganization or other
proceedings, that enjoins the Closing.
9.2.4 LOAN ASSUMPTION. The obligations of Purchaser with
regard to Closing under this Agreement are, at its option, subject to
Purchaser's receipt of consent of lenders under the Existing Loans to
Purchaser's assumption of at least $118,000,000.00 of the principal balances of
the Existing Loans on terms that are the same in all material respects as those
currently applicable to such Existing Loans.
9.2.5 TITLE POLICY. The obligations of Purchaser with regard
to Closing under this Agreement are, at its option, subject to Title Company
having irrevocably committed in writing to issue to Purchaser an extended
coverage owner's policy of title insurance in an amount at least equal to the
Purchase Price on American Land Title Association (ALTA) Owner's Policy Form
B-1970 or Form B-1992 with exception for creditor's rights deleted, and all
conditions to such issuance having been met, insuring that, upon Closing,
Purchaser is the owner of the fee simple title to the Property, without
exception, whether standard or special, except for the Permitted Exceptions.
9.2.6 ESTOPPELS. The obligations of Purchaser with regard to
Closing under this Agreement are, at its option, subject to Seller having
delivered to Purchaser, no more than fifteen (15) days prior to Closing,
Acceptable Estoppel Certificates from at least (i) nine (9) of the ten (10)
largest tenants (measured by annual base rental obligations) of all of the
Properties, such tenants being identified on Exhibit I attached hereto and
incorporated herein by this reference (the "Major Tenants"), and (ii)
seventy-five percent (75%) of the remaining tenants (measured by rentable
square footage, not including the square footage of the nine (9) Major Tenants
for which Acceptable Estoppel Certificates have been delivered pursuant to
clause (i) above). An "Acceptable Estoppel Certificate" means an executed
Estoppel Certificate substantially in the form of Exhibit J attached hereto and
incorporated herein by this reference or in the form provided in the applicable
Lease, or with such modifications in form or substance as are approved by
Purchaser in its reasonable discretion.
9.2.7 LEASING COMMISSIONS; TENANT IMPROVEMENT COSTS. The
obligations of Purchaser with regard to Closing under this Agreement are, at
its option, subject to Seller having paid, performed and/or provided
appropriate credits to Purchaser at or prior to Closing with respect to tenant
improvement and leasing commission obligations relating to each Lease in place
as of the Effective Date that are accrued and outstanding as of the Closing
Date.
9.2.8 SHAREHOLDER APPROVAL. Shareholder Approval shall
have been obtained, as well as shareholder approval of the transaction with DDR
described in Section 7.14.
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),
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
Page 17
18
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. 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 nonintentional breaches of representations
and warranties of which the party electing to close had knowledge at the
Closing.
9.3 SELLER'S DELIVERIES IN ESCROW. As of or prior to the Closing
Date, Seller shall deliver in escrow to Escrow Agent the following:
9.3.1 DEED. One or more special warranty or other limited
warranty deeds (as Seller's local counsel or Title Company shall advise,
warranting title only against any party claiming by, through or under Seller)
in form acceptable for recordation under the law of the state where the
Property is located and including a list of Permitted Exceptions to which the
conveyance shall be subject, executed and acknowledged by Seller, conveying to
Purchaser Seller's interest in the Real Property (collectively, the "Deed");
9.3.2 BILL OF SALE, ASSIGNMENT AND ASSUMPTION. One or more
Bill of Sale, Assignment and Assumption of Leases and Contracts in the form of
Exhibit C attached hereto (collectively, the "Assignment"), executed and
acknowledged by Seller, vesting in Purchaser, without implied warranty,
Seller's right, title and interest in and to the property described therein
free of any claims, except for the Permitted Exceptions to the extent
applicable;
9.3.3 LENDER ASSUMPTION DOCUMENTS. The applicable Lender
Assumption Documents;
9.3.4 ESTOPPELS. All Acceptable Estoppel Certificates
received by Seller;
9.3.5. 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;
9.3.6 FIRPTA. A Foreign Investment in Real Property Tax Act
affidavit executed by Seller;
9.3.7 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;
9.3.8 RENT ROLL. Updated Rent Rolls for the Property.
9.3.9 ADDITIONAL DOCUMENTS. Any additional documents that
Escrow Agent or the Title Company may reasonably require for the proper
consummation of the transaction contemplated by this Agreement, including,
without limitation, the documents described on Exhibit L (Title Company
Requirements) (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).
9.3.10 CLOSING CERTIFICATE. A certificate confirming the
representations and warranties of Seller contained in Section 11.1 remain true
and correct in all material respect as of Closing.
Page 18
19
9.4 PURCHASER'S DELIVERIES IN ESCROW. As of or prior to the
Closing Date, Purchaser shall deliver in escrow to Escrow Agent the following:
9.4.1 BILL OF SALE, ASSIGNMENT AND ASSUMPTION. The
Assignment, executed and acknowledged by Purchaser;
9.4.2 LENDER ASSUMPTION DOCUMENTS. Any and all documents
reasonably required by Nationwide Life Insurance Company and Aegon Life
Insurance Company for Purchaser to assume, at its election, the approximate
indebtedness of $118,183,000.00 owing by Seller, to assume all obligations of
Seller under the Loan Documents, and to confirm that the applicable assumed
loans are not in default (the "Lender Assumption Documents"). In addition,
Purchaser will use commercially reasonable efforts (without incurring
additional expense) to cause Seller to be released from such indebtedness and
obligations from and after the Closing Date. In the event Purchaser desires to
and is able to cause National Realty Funding L.P. and/or Guaranty Federal Bank,
F.S.B. to permit Purchaser to assume the approximate respective indebtedness of
$23,630,000.00 and $7,893,000.00 owing by Seller, such lenders' assumption
documentation shall be included in the definition of "Lender Assumption
Documents" hereunder.
9.4.3 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 Purchaser by applicable state and local law in
connection with the conveyance of Real Property; and
9.4.4. INDEMNITY. In the event Seller is not released from
the indebtedness and obligations under the Loan Documents which are the subject
of the Lender Assumption Documents, Purchaser shall execute an indemnity
agreement in favor of Seller relating to claims occurring after Closing against
Seller with respect to the Loan Documents.
9.4.5. ADDITIONAL DOCUMENTS. Any additional documents that
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).
9.4.6. CLOSING CERTIFICATE. A certificate confirming the
representations and warranties of Purchaser contained Section 11.2 remain true
and correct in all material respects as of Closing.
9.5 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 reasonably required by Escrow Agent.
9.6 PURCHASE PRICE. At or before 1:00 p.m. local time on the Closing
Date, Purchaser shall deliver to Escrow Agent the Purchase Price, less the
principal amount of indebtedness assumed by Purchaser pursuant to the Lender
Assumption Documents, plus or minus applicable prorations in accordance with
Article 10 hereof, 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).
Page 19
20
9.7 POSSESSION. Seller shall deliver possession of the Property to
Purchaser at the Closing subject only to the Permitted Exceptions.
9.8 DELIVERY OF BOOKS AND RECORDS. At the Closing, Seller shall
deliver to the offices of Purchaser's property manager or to the Real Property
to the extent in Seller's or its property manager's possession or control:
Lease Files; maintenance records and warranties; plans and specifications;
licenses, permits and certificates of occupancy; copies or originals of all
books and records of account, contracts, and copies of correspondence with
tenants and suppliers; receipts for deposits, unpaid bills and other papers or
documents which pertain to the Property; all advertising materials; booklets;
keys; and other similar items, if any, used in the operation of the Property.
9.9 NOTICE TO TENANTS. Seller and Purchaser shall deliver to each
tenant immediately after the Closing a notice regarding the sale in
substantially the form of Exhibit E attached hereto, or such other form as may
be required by applicable law.
ARTICLE 10 - PRORATIONS, DEPOSITS, COMMISSIONS
10.1 PRORATIONS. At Closing, the following items shall be prorated as
of the date of Closing with all items of income and expense for the Property
being borne by Seller prior to the Closing and Purchaser from and after (but
including) the date of Closing: Tenant Receivables and other income and rents;
fees and assessments; prepaid expenses and obligations under Service Contracts;
accrued operating expenses; accrued and unpaid interest on the Existing Loans
assumed by Purchaser; 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:
10.1.1 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
arising out of a change in ownership shall be assumed by Purchaser effective as
of Closing and paid by Purchaser when due and payable, and Purchaser shall
indemnify Seller from and against any and all such Taxes, which indemnification
obligation shall survive the Closing.
10.1.2 UTILITIES. Purchaser and Seller shall take all steps
necessary to effectuate the transfer of all utilities to Purchaser's name as of
the Closing Date, and where necessary, Purchaser shall post deposits with the
utility companies. Seller shall ensure that all utility meters are read as of
the Closing Date. Seller shall be entitled to recover any and all deposits held
by any utility company as of the Closing Date.
10.1.3 TENANT RECEIVABLES. Rents due from tenants under
Leases and operating expenses and/or taxes payable by tenants under Leases
(collectively, "Tenant Receivables") shall be apportioned on the basis of the
period for which the same is payable and if, as and when collected, as follows:
(a) Purchaser shall apply rent and other income received from
tenants under Leases after Closing in the following order of priority: (i)
first, to payment of the current Tenant Receivables then due for the month in
which the Closing Date occurs, which amount shall be apportioned between
Purchaser and Seller as of the Closing Date as set forth in Section 10.1 hereof
(with Seller's portion thereof to be delivered to Seller); (ii) second, to
Tenant Receivables first coming due after Closing and applicable to the period
of time after Closing, which amount shall be retained by Purchaser; (iii)
third, to payment of Tenant Receivables first coming due after Closing but
applicable to the period of time before
Page 20
21
Closing, including, without limitation, the Tenant Receivables described in
Subsection 10.1.3(b) below (collectively, "Unbilled Tenant Receivables"), which
amount shall be delivered to Seller; and (iv) thereafter, to delinquent Tenant
Receivables which were due and payable as of Closing but not collected by
Seller as of Closing (collectively, "Uncollected Delinquent Tenant
Receivables"), which amount shall be delivered to Seller. Notwithstanding the
foregoing, Seller shall have the right to pursue the collection of Uncollected
Delinquent Tenant Receivables for a period of one (1) year after Closing
without prejudice to Seller's rights or Purchaser's obligations hereunder,
provided, however, Seller shall have no right to cause any such tenant to be
evicted or to exercise any other remedies set forth in such tenant's Lease
against such tenant other than to sue for collection. Any sums received by
Purchaser to which Seller is entitled shall be held in trust for Seller on
account of such past due rents payable to Seller, and Purchaser shall remit to
Seller any such sums received by Purchaser to which Seller is entitled within
ten (10) business days after receipt thereof less reasonable, actual costs and
expenses of collection, including reasonable attorneys' fees, court costs and
disbursements, if any. Seller expressly agrees that if Seller receives any
amounts after the Closing Date which are attributable, in whole or in part, to
any period after the Closing Date, Seller shall remit to Purchaser that portion
of the monies so received by Seller to which Purchaser is entitled within ten
(10) business days after receipt thereof. With respect to Unbilled Tenant
Receivables, Purchaser covenants and agrees to (A) bill the same when billable
pursuant to the applicable Lease and (B) cooperate with Seller to determine the
correct amount of operating expenses and/or taxes due pursuant to the
applicable Lease. The provisions of this Subsection 10.1.3(a) shall survive the
Closing.
(b) Without limiting the generality of the requirements of
Subsection 10.1.3(a)(ii) above, if the final reconciliation or determination of
operating expenses and/or taxes due under the Leases shows that a net amount is
owed by Seller to Purchaser, Purchaser's pro rata portion shall be paid by
Seller to Purchaser within ten (10) business days of such final determination
under the Leases. If the final determination of operating expenses and/or taxes
due under the Leases shows that a net amount is owed by Purchaser to Seller,
Purchaser shall, within ten (10) business days of such final determination,
remit to Seller Seller's portion of operating expenses and/or taxes for the
period up to and including the Closing Date, if, as and when received.
Purchaser agrees to receive and hold any monies received on account of such
past due expenses and/or taxes in trust for Seller and to pay same promptly to
Seller as aforesaid. The provisions of this Subsection 10.1.3(b) shall survive
the Closing.
10.2 CLOSING COSTS. Closing costs shall be allocated between Seller
and Purchaser in accordance with Section 1.2.
10.3 CAPITAL EXPENDITURES. To the extent Seller did not fund all
capital expenditures scheduled to be performed on or before the Closing Date
(as set forth on the Capital Expenditure Schedule), Purchaser shall receive a
credit against the Purchase Price in the estimated amount of such unfunded
capital expenditures, as shown on the Capital Expenditure Schedule.
10.4 FINAL ADJUSTMENT AFTER CLOSING. If final bills are not available
or cannot be issued prior to Closing for any item being prorated under Section
10.1, 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 thirty (30) days of written
notice. All such rights and obligations shall survive the Closing.
10.5 TENANT DEPOSITS. All tenant security deposits collected and not
applied by Seller in accordance with the terms of the applicable Lease and
applicable law (and interest thereon if required by law or contract) shall be
transferred or credited to Purchaser at Closing. As of the Closing, Purchaser
Page 21
22
shall assume Seller's obligations related to tenant security deposits, but only
to the extent they are credited or transferred to Purchaser.
10.6 NO COMMISSIONS. 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, and each
agrees to and does 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 11 - REPRESENTATIONS AND WARRANTIES
11.1 SELLER'S REPRESENTATIONS AND WARRANTIES. Seller represents
and warrants to Purchaser that:
11.1.1 ORGANIZATION AND AUTHORITY. Each entity comprising
"Seller" has been duly organized, is validly existing, and is in good standing
in the state in which it was formed. Subject to Shareholder Approval, Seller
has the full right and authority 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, subject to the Shareholder Approval. Except as
disclosed by Seller to Purchaser, the execution, delivery, and performance of
this Agreement and the Closing Documents by Seller will not result in any
violation of or default under, or require any notice, or consent under any of
Seller's organizational documents, any other agreement to which Seller is a
party or any law, judgment or order applicable to Seller.
11.1.2 CONFLICTS AND PENDING ACTIONS. Except as disclosed by
Seller to Purchaser, 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. There is no action or proceeding pending or, to Seller's knowledge,
threatened against Seller or relating to the Property, which challenges or
impairs Seller's ability to execute or perform its obligations under this
Agreement, and no order or other relief has been entered that imposes any
recorded lien or other encumbrance on any of the Property.
11.1.3 SERVICE CONTRACTS. To Seller's knowledge, the list of
Service Contracts to be delivered to Purchaser pursuant to this Agreement will
be correct and complete as of the date of its delivery.
11.1.4 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 Property, or any part thereof, that has not been corrected,
except as may be reflected by the Property Information.
11.1.5 LEASES. On or prior to the Effective Date, Seller has
delivered to Purchaser or made available to Purchaser, true, and correct and
complete copies of all leasing commissions and brokerage agreements currently
in effect for each Property, all of which are listed on Exhibit K, attached
hereto and incorporated herein by this reference (the "Commission Schedule").
Seller has delivered to the Purchaser or made available to Purchaser true and
correct and complete copies of all existing Leases. The
Page 22
23
Commission Schedule lists tenant improvement costs, brokers' commissions and
leasing fees for any tenant's prior space for which the landlord with respect
to any of the Properties is obligated or subject and which are unpaid as of
October 6, 2000, and (ii) all brokers' commissions and leasing fees which the
landlord with respect to any of the Properties is contractually obligated to
pay in the event any tenant exercises any renewal or expansion option.
As of the Effective Date, no Lease has been modified except as shown
in the Leases delivered to Purchaser. Each of the Leases is in full force and
effect. To Seller's knowledge, no uncured event of material default on the part
of Seller has occurred under any of the Leases and there exists no event which,
with the giving of notice or the passage of time, or both, would constitute
such a default. To Seller's knowledge, no uncured event of material default on
the part of any tenant has occurred under any of the Leases and, to Seller's
knowledge, there exists no event which, with the giving of notice or the
passage of time, or both, would constitute such a default. No tenant has any
defense, offset or claim against its obligation to pay rent or perform any of
its other obligations under its Lease. Except with respect to the "Battlefield
Property," no tenant has any right of right or first refusal or option to
purchase any part of the Property. If the tenant at the Battlefield Property
does elect to exercise its purchase option, the Battlefield Property shall no
longer be subject to this Agreement and the Purchase Price will be reduced by
the allocated Purchase Price thereof provided pursuant to a separate written
agreement between Seller and Purchaser and the parties shall have no further
rights, duties or obligations herewith respect to the Battlefield Property,
except for those obligations which by their terms survive termination of this
Agreement.
11.1.6 LOAN DOCUMENTS. On or prior to the Effective Date,
Seller has delivered to the Purchaser or made available to Purchaser true and
correct and complete copies of all existing Loan Documents. The Loan Documents
have not been modified except as shown in the Loan Documents. There are no
other documents or instruments which evidence, secure or otherwise govern the
Existing Loans. Seller has not received any notice of any material breach or
material default under the Loan Documents, and to Seller's knowledge, there is
no existing or uncured material default or material breach by any party under
the Loan Documents, and no facts or circumstances exist that, with the passage
of time or the giving of notice, or both, would constitute such a default or
breach by any party under the Loan Documents. To Seller's knowledge, the
current mortgagees or beneficiaries of the Existing Loans are the lenders
identified on Exhibit F. The outstanding principal balance of each of the
Existing Loans estimated as of February 28, 2001 is set forth on Exhibit F.
11.1.7 SERVICE CONTRACTS. On or prior to the Effective Date,
Seller has made available or delivered to the Purchaser true and correct and
complete copies of all Service Contracts related to the operation of the
Property. The Service Contracts have not been modified except as shown in the
Service Contracts. Seller has not received any notice of any material breach or
material default under the Service Contracts, and to Seller's knowledge, there
is no existing or uncured material default or material breach by any party
under the Service Contracts, and no facts or circumstances exist that, with the
passage of time or the giving of notice, or both, would constitute a default or
breach by any party under the Service Contracts.
11.1.8 MANAGEMENT AGREEMENTS. On or prior to the Effective
Date, Seller has made available or delivered to the Purchaser true and correct
and complete copies of all existing management agreements relating to the
Property. The management agreements have not been otherwise modified except as
shown in the management agreements delivered to Purchaser. Seller has not
received any notice of any uncured material breach or material default under
the management agreements, and to Seller's knowledge, there is no existing or
uncured material default or material breach by any party under the management
agreements, and no facts or circumstances exist that, with the passage of time
or the
Page 23
24
giving of notice, or both, would constitute such a default or breach by any
party under the management agreements.
11.1.9 CONDEMNATION. Seller has not received notice of, nor
does Seller have knowledge of any pending or contemplated condemnation, eminent
domain, or similar proceeding with respect to all or any portion of the
Properties.
11.1.10 PROPERTY TAXES. Seller has provided Purchaser with
copies of all notices and other documents relating to any and all property tax
reassessment proceedings or contests relating to or affecting any of the
Properties.
11.2 PURCHASER'S REPRESENTATIONS AND WARRANTIES. Purchaser
represents and warrants to Seller that:
11.2.1 ORGANIZATION AND AUTHORITY. Purchaser has been duly
organized and is validly existing as a limited partnership in good standing in
the State of Georgia and as of the Closing Date will be qualified to do
business in each state in which the Real Property is located. 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. The execution, delivery, and performance of this Agreement and the
Closing Documents by Purchaser will not result in any violation of or default
under, or require any notice, or consent under any of Purchaser's
organizational documents, any other agreement to which Purchaser is a party or
any law, judgment or order applicable to Purchaser.
11.2.2 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.
11.2.3. ADEQUATE FUNDS. Purchaser currently has or on the
Closing will have adequate funds to close on the purchase of the Projects in
accordance with the terms hereof.
11.3 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations
and warranties set forth in this Article 11 are made as of the date of this
Agreement and remade as of the Closing Date, but shall be deemed to be merged
into and waived by the instruments of Closing, and shall not survive the
Closing. Terms such as "to Seller's knowledge," "to the best of Seller's
knowledge," or like phrases do not include constructive knowledge, imputed
knowledge, or knowledge Seller does not have but could have obtained through
further investigation or inquiry. Terms such as "to Purchaser's knowledge," "to
the best of Purchaser's knowledge," or like phrases do not include constructive
knowledge, imputed knowledge, or knowledge Purchaser does 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. No broker, agent, or other party other than
Purchaser is authorized to make any representation or warranty for or on behalf
of Purchaser.
Page 24
25
ARTICLE 12 - DEFAULT AND REMEDIES
12.1 SELLER'S REMEDIES. If Purchaser fails to perform its obligations
pursuant to this Agreement at or prior to Closing for any reason except failure
by Seller to perform hereunder, Seller shall be entitled, as its sole remedy
(except as provided in Sections 4.9, 10.6, 12.3 and 12.4 hereof), to terminate
this Agreement and recover the Earnest 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 Earnest 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. Notwithstanding anything in this Section
12.1 to the contrary, in the event of Purchaser's default or a termination of
this Agreement, Seller shall have all remedies available at law or in equity in
the event Purchaser or any party related to or affiliated with Purchaser is
asserting any claims or right to the Property that would delay or prevent
Seller from having clear, indefeasible and marketable title to the Property. In
all other events Seller's remedies shall be limited to those described in this
Section 12.1 and Sections 4.9, 10.6, 12.3 and 12.4 hereof. IN NO EVENT SHALL
PURCHASER'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.
Seller's Initials Purchaser's Initials
------------ -------------
12.2 PURCHASER'S REMEDIES. If Seller fails to perform its obligations
pursuant to this Agreement for any reason except failure by Purchaser to
perform hereunder, Purchaser shall elect, as its sole remedy (except as
provided in Sections 10.6, 12.3, 12.4 and 12.5), either to (i) terminate this
Agreement by giving Seller timely written notice of such election prior to or
at Closing and recover the amounts specified under Section 7.5, or (ii) waive
said failure or breach and proceed to Closing. 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.
Seller's Initials Purchaser's Initials
------------ -------------
12.3 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, actual and verifiable fees and expenses,
including attorneys' fees, incurred in connection with such claims.
12.4 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 Earnest 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.
Page 25
26
12.5 LITIGATION INDEMNITY. Seller shall indemnify, save and hold
harmless Purchaser from and against any and all costs, losses, liabilities,
obligations, damages, lawsuits, deficiencies, claims, demands and expenses,
including without limitation attorney's fees and all amounts paid in
investigation, defense or settlement of any of the foregoing, incurred in
connection with, arising out of, or resulting from any litigation against
Seller, including without limitation, any shareholder litigation arising as a
result of the transactions contemplated by this Agreement, but excluding any
such item arising out of Purchaser's negligent or wrongful action or inaction.
The provisions of this Section 12.5 shall survive termination of this Agreement
or consummation of the transactions contemplated hereby.
ARTICLE 13 - DISCLAIMERS, RELEASE AND INDEMNITY
13.1 DISCLAIMERS BY SELLER.
(a) Except as expressly set forth in this Agreement, it is
understood and agreed that Seller and Asset Manager have not at any time made
and are not now making, and they specifically disclaim, any warranties or
representations of any kind or character, express or implied, with respect to
the Property, including, but not limited to, warranties or representations as
to (i) matters of title, (ii) 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, (iii) 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, (iv) 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, (v)
drainage, (vi) 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, (vii) the presence of
endangered species or any environmentally sensitive or protected areas, (viii)
zoning or building entitlements to which the Property or any portion thereof
may be subject, (ix) the availability of any utilities to the Property or any
portion thereof including, without limitation, water, sewage, gas and electric,
(x) usages of adjoining property, (xi) access to the Property or any portion
thereof, (xii) 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, (xiii) 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, (xiv) the existence or non-existence of
underground storage tanks, surface impoundments, or landfills, (xv) the
merchantability of the Property or fitness of the Property for any particular
purpose, (xvi) the truth, accuracy or completeness of the Property Information,
(xvii) tax consequences, or (xviii) any other matter or thing with respect to
the Property.
(b) Section 25359.7 of the California Health and Safety Code
requires owners of nonresidential property who know or have reasonable cause to
believe that any release of hazardous substance has come to be located on or
beneath real property to provide written notice of that condition to a buyer of
such real property. There is a possibility that a release of a hazardous
substance may have come to be located on or beneath one or more of the Projects
as described in the environmental reports and documents which have been
received and reviewed by Purchaser. By its execution of this Agreement,
Purchaser acknowledges its receipt of the foregoing notice given pursuant to
Section 25359.7 of the California Health and Safety Code.
Page 26
27
(c) Purchaser acknowledges that "Natural Hazards" described
in the following California Code Sections (the "Natural Hazard Laws") may
affect one or more of the Projects: Government Code Section 8589.3 (Special
Flood Hazard); Government Code Section 8589.5 (Potential Flooding); Government
Code Sections 51178 and 51179 (Very High Fire Hazard Severity Zone); Public
Resources Code Section 2622 (Earthquake Fault Zone); Public Resources Code
Section 2696 (Seismic Hazard Zone); and Public Resources Code Section 4125
(Wildland Forest Fire Risks and Hazards). Purchaser acknowledges and agrees
that Purchaser is an experienced real estate investor, and has been advised
that Purchaser should determine whether any lists or maps delineating
properties affected by such Natural Hazards are available and otherwise
determine whether any such Natural Hazards affect any of the Projects.
Purchaser further represents and warrants that Purchaser has independently
evaluated and investigated whether any or all of such Natural Hazards affect
the one or more of the Projects. Based on the foregoing, Purchaser knowingly
and intentionally waives any disclosures, obligations or requirements of Seller
with respect to Natural Hazards, including, without limitation, any disclosure
obligations or requirements under the following California Code Sections:
Government Code Sections 8589.3, 8589.4 and 51183.5 and Public Resources Code
Sections 2621.9, 2694 and 4136 (the "Natural Hazard Disclosure Requirements").
Purchaser acknowledges and agrees that this waiver has been specifically
negotiated and is an essential aspect of the bargain between the parties.
13.2 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 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, THE ASSET MANAGER, OR ANY 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. 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. SELLER SHALL NOT BE DEEMED TO HAVE MADE ANY
REPRESENTATION OR WARRANTY WITH RESPECT
Page 27
28
TO 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'S INITIALS
---------------
13.3 SELLER RELEASED FROM LIABILITY. Purchaser acknowledges that it
had the opportunity to inspect the Property prior to the Effective Date, 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 and Asset Manager from all
responsibility and liability to Purchaser, including without limitation,
liabilities under the Comprehensive Environmental Response, Compensation and
Liability Act Of 1980 (42 U.S.C. Sections 9601 et seq.), as amended ("CERCLA"),
California Health and Safety Code Sections 25300, et seq. and other similar
applicable state laws, directly or indirectly, regarding the condition
(including 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), valuation, salability or utility of the
Property, or its suitability for any purpose whatsoever; provided, however, the
foregoing release shall not include third party claims brought against
Purchaser for which Seller may be liable otherwise than under this Agreement.
By closing this transaction, Purchaser will be deemed to have waived any and
all objections to or complaints regarding (including, but not limited to,
federal, state and common law based actions), or any private right of action
under, state and federal law to which the Property is or may be subject,
including, but not limited to, CERCLA, physical characteristics and existing
conditions, including, without limitation, 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 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. Purchaser
expressly waives the provisions of Section 1542 of the California Civil Code
(or any similar provision or principle of law which may apply in any other
state where any Property is located) which provides:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
NOT KNOW OR EXPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH IF KNOWN TO HIM MUST HAVE MATERIALLY AFFECTED THE
SETTLEMENT WITH THE DEBTOR."
PURCHASER'S INITIALS:
----------------
13.4 "HAZARDOUS MATERIALS" DEFINED. For purposes hereof, "Hazardous
Materials" means "Hazardous Material," "Hazardous Substance," "Hazardous
Waste," "Extremely Hazardous Waste," "Restricted Hazardous Waste," "Pollutant
or Contaminant," and "Petroleum" and "Natural Gas Liquids,"
Page 28
29
as those terms are defined or used in Section 101 of CERCLA or under any laws,
ordinances, rules, requirements and regulations of any governmental authority
having jurisdiction with respect to the Property, 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, petroleum and infectious
materials.
13.5 INDEMNITY. Purchaser agrees to indemnify and hold Seller harmless
of and from any and all liabilities, claims, demands, and expenses of any kind
or nature which arise or accrue after Closing and relate to the ownership,
maintenance, or operation of the Property by Purchaser and its successors and
assigns, including, without limitation, in connection with Hazardous Materials
at, on or under the Property, but excluding any matters as to which Seller has
contractual liability. Such indemnity shall not apply to any Hazardous
Materials existing as of the Closing Date unless Purchaser's activities cause
the release and/or migration of any Hazardous Materials at, on or under the
Property existing as of the Closing Date.
13.6 SURVIVAL. The terms and conditions of this Article 13 shall
expressly survive the Closing, and not merge with the provisions of any closing
documents.
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 14 - MISCELLANEOUS
14.1 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 to one or more assignees upon the following conditions: (i) the
Assignee of Purchaser must be an entity controlling, controlled by, or under
common control with Purchaser or an entity in which Value Enhancement Fund IV,
L.P. is a direct or indirect investor, (ii) all of the Earnest Money must have
been delivered in accordance herewith, (iii) the assignee of Purchaser shall
assume all obligations of Purchaser hereunder, but Purchaser shall remain
primarily liable for the performance of Purchaser's obligations, (iv) Purchaser
shall notify Seller (which may be by telephone to Tony Koeijmans, Esq. at (972)
550-3204, and confirmed in writing within 24 hours) promptly following
Purchaser's designation of one or more assignees and (v) a copy of the fully
executed written assignment and assumption agreement shall be delivered to
Seller at least five (5) days prior to Closing.
14.2 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.
14.3 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.
Page 29
30
14.4 GOVERNING LAW. This Agreement shall, in all respects, be governed,
construed, applied, and enforced in accordance with the law of the State of
Texas.
14.5 SURVIVAL. The provisions of this Agreement that contemplate
performance after the Closing and the obligations of the parties not fully
performed at the Closing shall survive the Closing and shall not be deemed to be
merged into or waived by the instruments of Closing.
14.6 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.
14.7 TIME. Time is of the essence in the performance of this Agreement.
14.8 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 consent of
Seller; provided, however, that Purchaser may, subject to the provisions of
Section 4.6, make disclosure of this Agreement to its Permitted Outside Parties
as necessary to perform its obligations hereunder and as may be required under
laws or regulations applicable to Purchaser. Notwithstanding anything to the
contrary hereinafter set forth, Purchaser may disclose such information (i) to
its employees, members of professional firms serving it or potential lenders or
investors who need such information for purposes of evaluating the transactions
contemplated in this Agreement, provided any such persons or entities agree to
and shall maintain the confidentiality thereof, (ii) if any court or
governmental agency requires disclosure in order to comply with applicable
laws, (iii) pursuant to any legal requirement, any reporting requirement
pursuant to applicable law or the applicable rules by any securities exchange
or any accounting or auditing disclosure requirement, (iv) in any legal action,
to the extent necessary to enforce its rights under this Agreement, and (v) to
the extent that such information is a matter of public record. The provisions
of this Section 14.8 shall survive the termination of this Agreement.
14.9 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 (i) by depositing the same in the United States mail, postage paid,
certified and addressed to the party to be notified, with return receipt
requested, (ii) by overnight delivery using a nationally recognized overnight
courier, (iii) by personal delivery, or (iv) by facsimile, evidenced by
confirmed receipt. Notice deposited in the mail in the manner hereinabove
described shall be effective on the third (3rd) business day after such
deposit. Notice given in any other manner shall be effective only if and when
received by the party to be notified. 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.
14.10 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.
Page 30
31
14.11 CALCULATION OF TIME PERIODS. 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 a Saturday, Sunday or legal holiday for national banks in the location
where the Property is located, in which event the period shall run until the
end of the next day which is neither a Saturday, Sunday, or legal holiday. The
last day of any period of time described herein shall be deemed to end at 5:00
p.m. Central Standard Time.
14.12 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 14.9 other than facsimile.
14.13 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 12.1 hereof.
14.14 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.
14.15 DISCHARGE OF OBLIGATIONS. The acceptance of the Deed by
Purchaser shall be deemed to be a full performance and discharge of every
representation and warranty made by Seller herein and every agreement and
obligation on the part of Seller to be performed pursuant to the provisions of
this Agreement, except those which are herein specifically stated to survive
Closing.
14.16 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.
14.17 ASSET MANAGER: DESIGNATED REPRESENTATIVE. Seller has engaged the
companies listed on Exhibit G (collectively, "Asset Manager") to provide
certain asset management services with respect to the Property. One of the
Asset Managers, Chase Realty Advisors, Inc. ("Chase") has been engaged to act
as a liaison between Seller and Purchaser in connection with the Property and
this Agreement. Chase has appointed Stan Levy and Tom Grier ("Designated
Representative(s)") to deal with Purchaser. Whenever any approval, acceptance,
consent, direction or action of Seller is required pursuant to this Agreement,
Purchaser shall send to the Designated Representative a written notice
requesting same, which notice shall: (i) describe in detail the matter for
which such approval, acceptance, consent, direction or other action of Seller
is requested; (ii) be accompanied by a copy of any contract, agreement or other
document to be executed by Seller evidencing such approval, consent,
acceptance, direction or action of Seller; and (iii) be accompanied by such
other documents, written explanations and information as may be reasonably
necessary to explain the request fully and completely. Chase will communicate
Page 31
32
Seller's response to any such requests to Purchaser. Whenever any approval,
acceptance, consent, direction or action of Purchaser is required pursuant to
this Agreement, Seller shall send to Purchaser a written notice requesting
same, which notice shall: (i) describe in detail the matter for which such
approval, acceptance, consent, direction or other action of Purchaser is
requested; (ii) be accompanied by a copy of any contract, agreement or other
document to be executed by Purchaser evidencing such approval, consent,
acceptance, direction or action of Purchaser; and (iii) be accompanied by such
other documents, written explanations and information as may be reasonably
necessary to explain the request fully and completely.
14.18 REIT. Seller hereby advises Purchaser that Seller is qualified
as a real estate investment trust under the provisions of the Internal Revenue
Code of 1986, as amended, and that, by reason thereof, the maintaining of such
status and the avoiding of any activity which might cause a penalty tax to be
applied is of material concern to Seller. Accordingly, Purchaser agrees to make
any modifications or amendments to this Agreement requested by Seller prior to
Closing that may be necessary for Seller to maintain its status as a real
estate investment trust or in order for it to avoid a penalty tax; provided,
however, that Purchaser shall have no obligation to enter into any such
modification or amendment that would materially alter or affect, in Purchaser's
sole judgment, Purchaser's rights, duties, or obligations under this Agreement.
If Purchaser declines to modify or amend this Agreement for any reason in a
manner which Seller determines, in the good faith exercise of its reasonable
business judgment, is necessary to maintain its status as a real estate
investment trust or avoid a penalty tax, Seller shall have the right to
terminate this Agreement by written notice delivered to Purchaser. In the event
Seller exercises such termination right, neither party shall have any further
rights or obligations hereunder (except with respect to provisions of this
Agreement which recite that they survive termination), the Earnest Money shall
be returned to Purchaser and all other funds and documents deposited in escrow
shall be returned to the party depositing the same.
14.19 EXCULPATION. No present or future officer, director, trust
manager, employee or agent of Seller shall have any personal liability,
directly or indirectly, and recourse shall not be had against any such officer,
director, trust manager, employee, or agent, under or in connection with this
Agreement or any other document or instrument heretofore or hereafter executed
in connection with this Agreement either before or after Closing. Purchaser
hereby waives and releases any and all such personal liability and recourse.
The limitations of liability provided in this Section are in addition to, and
not in limitation of, any limitation on liability provided for elsewhere in
this Agreement or otherwise provided by law or in any other contract, agreement
or instrument. No present or future officer, director, trust manager, employee
or agent of Purchaser shall have any personal liability, directly or
indirectly, and recourse shall not be had against any such officer, director,
trust manager, employee or agent, under or in connection with this Agreement
either before or after Closing. Seller hereby waives and releases any and all
such personal liability and recourse. The limitations of liability provided in
this Section are in addition to, and not in limitation of any limitation on
liability provided for elsewhere in this Agreement or otherwise provided by law
or in any other contract, agreement or instrument.
14.20 JOINT AND SEVERAL LIABILITY OF SELLER. Each entity comprising
Seller shall be jointly and severally liable for all obligations of Seller
hereunder.
ARTICLE 15 - ESCROW AGENT
15.1 ESCROW PROVISIONS; PAYMENT AT CLOSING. If the Closing takes place
under this Agreement, Escrow Agent shall deliver the Earnest Money to Purchaser.
15.2 PAYMENT ON DEMAND. Upon receipt of any written certification from
Seller or Purchaser
Page 32
33
claiming the Earnest Money pursuant to the provisions of this Agreement, Escrow
Agent shall promptly forward a copy thereof to the other such party (i.e.,
Purchaser or Seller, whichever did not claim the Earnest Money pursuant to such
notice) and, unless such other party within ten (10) days thereafter notifies
Escrow Agent of any objection to such requested disbursement of the Earnest
Money, Escrow Agent shall disburse the Earnest Money to the party demanding the
same and shall thereupon be released and discharged from any further duty or
obligation hereunder.
15.3 EXCULPATION OF ESCROW AGENT. It is agreed that the duties of
Escrow Agent are herein specifically provided and are purely ministerial in
nature, and that Escrow Agent shall incur no liability whatsoever except for
its willful misconduct or gross negligence, so long as Escrow Agent is acting
in good faith. Seller and Purchaser do each hereby release Escrow Agent from
any liability for any error of judgment or for any act done or omitted to be
done by Escrow Agent in the good faith performance of its duties hereunder and
do each hereby indemnify Escrow Agent against, and agree to hold, save, and
defend Escrow Agent harmless from, any costs, liabilities, and expenses
incurred by Escrow Agent in serving as Escrow Agent hereunder and in faithfully
discharging its duties and obligations hereunder.
15.4 STAKEHOLDER. Escrow Agent is acting as a stakeholder only with
respect to the Earnest Money. If there is any dispute as to whether Escrow
Agent is obligated to deliver the Earnest Money or as to whom the Earnest Money
is to be delivered, Escrow Agent may refuse to make any delivery and may
continue to hold the Earnest Money until receipt by Escrow Agent of an
authorization in writing, signed by Seller and Purchaser, directing the
disposition of the Earnest Money, or, in the absence of such written
authorization, until final determination of the rights of the parties in an
appropriate judicial proceeding. If such written authorization is not given, or
a proceeding for such determination is not begun, within sixty (60) days of
notice to Escrow Agent of such dispute, Escrow Agent may bring an appropriate
action or proceeding for leave to deposit the Earnest Money in a court of
competent jurisdiction pending such determination. Escrow Agent shall be
reimbursed for all costs and expenses of such action or proceeding, including,
without limitation, reasonable attorneys' fees and disbursements, by the party
determined not to be entitled to the Earnest Money. Upon making delivery of the
Earnest Money in any of the manners herein provided, Escrow Agent shall have no
further liability or obligation hereunder.
[SIGNATURE PAGES AND EXHIBITS TO FOLLOW]
Page 33
34
SIGNATURE PAGE TO AGREEMENT OF
PURCHASE AND SALE
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year written below.
SELLER:
AMERICAN INDUSTRIAL PROPERTIES REIT,
a Texas real estate investment trust
Executed as of , 2000 By: /s/ Charles W. Wolcott
----------- ---------------------------------
Charles W. Wolcott, President and
Chief Executive Officer
AIP/BATTLEFIELD GP, INC.,
a Texas corporation
Executed as of , 2000 By: /s/ Charles W. Wolcott
----------- ---------------------------------
Charles W. Wolcott, President and
Chief Executive Officer
AIP-SWAG OPERATING, L.P.
a Texas limited partnership
By: AIP-Swag GP, Inc.
General Partner
Executed as of , 2000 By: /s/ Charles W. Wolcott
----------- -----------------------------
Charles W. Wolcott, President
and Chief Executive Officer
AIP PROPERTIES #3, L.P.,
a Delaware limited partnership
By: AIP Properties #3 GP, Inc.
General Partner
Executed as of , 2000 By: /s/ Charles W. Wolcott
----------- ------------------------------
Charles W. Wolcott, President
and Chief Executive Officer
Page 34
35
AIP OPERATING, L.P.,,
a Delaware limited partnership
By: American Industrial Properties
REIT General Partner
Executed as of November 1, 2000 By: /s/ Charles W. Wolcott
------------------------------
Charles W. Wolcott, President
and Chief Executive Officer
PURCHASER:
VALUE ENHANCEMENT FUND IV, L.P.,
a Georgia limited partnership
By: VEF IV GP, Inc.
General Partner
Executed as of November 1, 2000 By: /s/ James P. Ryan
------------------------------
James P. Ryan, President
JOINDER BY ESCROW AGENT
Escrow Agent has executed this Agreement in order to confirm that Escrow Agent
has received and shall hold the Earnest Money required to be deposited under
this Agreement and the interest earned thereto, in escrow, and shall disburse
the Earnest Money, and the interest earned thereon, pursuant to the provisions
of this Agreement.
COMMONWEALTH TITLE INSURANCE COMPANY
Executed as of November 7, 2000 By: /s/ Amanda Johnson
----------------------------------
Name: Amanda Johnson
--------------------------------
Title: Escrow Officer
-------------------------------
Page 35
36
LIST OF EXHIBITS
A - Legal Description of Real Property
A-1 List of Projects
B List of Tangible Personal Property
C - Bill of Sale, Assignment and Assumption of Leases and
Contracts
D - (Intentionally Left Blank)
E - Notice to Tenants
F Existing Loans
G - List of Asset Managers
H - Capital Expenditure Schedule
I - Ten Largest Tenants
J - Estoppel Certificate Form
K - Commission Schedule
L Title Company - Required Closing Document List
Page 36
37
EXHIBIT A
LEGAL DESCRIPTIONS
[DOES NOT INCLUDE VACANT LAND ADJACENT TO SUMMIT PARK
AND CAMERON CREEK]
38
EXHIBIT A-1
LIST OF PROJECTS
NO PROPERTY TYPE METRO AREA ST
-- -------- ---- ---------- --
1 107 Woodmere Light ind Folsom Ca
2 3100 Alfred Light ind Santa Clara Ca
3 485 Clyde Office Mountain View Ca
4 Academy Point Office Colorado Springs Co
5 Aerotech Light ind Colorado Springs Co
6 Avion Light ind Dallas Tx
7 Battlefield Light ind Manassas Va
8 Baytech Park Office San Jose Ca
9 Black Canyon Tech Light ind Phoenix Az
10 Bridgeway Tech Center Light ind Newark Ca
11 Cameron Creek Light ind Austin Tx
12 Central Park Light ind Dallas Tx
13 Centre Pointe Office Walnut Creek Ca
14 Columbia Corporate Ctr Light ind Aliso Viejo Ca
15 Corporex Plaza I Light ind Tampa Fl
16 Gibraltar Tech Center Office Sunnyvale Ca
17 Humboldt Tech Center Light ind Sunnyvale Ca
18 Huntington Light ind Monrovia Ca
19 Interlochen Office Park Light ind Broomfield Co
20 Inverness Light ind Denver Co
21 Junction II Bus Park Light ind San Jose Ca
22 Metro Business Park Light ind Phoenix Az
23 Northpointe B Light ind Sterling Va
Northpointe C Light ind Sterling Va
24 Northview Business Center Office Austin Tx
25 Presidents Plaza Light ind Tampa Fl
26 Skyway Light ind Dallas Tx
27 Southeast Commercial Center Light ind Austin Tx
28 Spring Valley Office Dallas Tx
29 Stewart Plaza Light ind Sunnyvale Ca
30 Summit Park Light ind Austin Tx
39
EXHIBIT B
LIST OF TANGIBLE PERSONAL PROPERTY
CENTRE POINTE OFFICE INVENTORY
02/28/2000
ITEM COUNT DATE OF PURCHASE WARRANTY EXPIRATION ESTIMATED VALUE
---- ----- ---------------- ------------------- ----------------
PROPERTY MANAGERS' OFFICE
Executive desk 1 1/15/1999 $ 1,200.00
Executive credenza 1 1/15/1999 $ 2,500.00
Executive high back chair 1 1/15/1999 $ 500.00
Framed print 1 10/1/1999 $ 65.00
calculator 1 5/1/1999 $ 115.00
NT work station w/ printer 1 1/15/1999 $ 1,785.05
$ 150.00
RECEPTION AREA
Sofa 1 1/15/1999 $ 900.00
bench table 1 1/15/1999 $ 300.00
end table 1 1/15/1999 $ 190.00
ADMINISTRATION AREA
Administrative desk 1 donated to crisis center 01-00
conference table 1 donated to crisis center 01-00
mid back managerial chairs 5 1/15/1999 $ 1,250.00
Arial map photo 1-680 (framed) 1 1/15/1999
4 drawer lateral file cabinet 1 3/1/1999 $ 700.00
3 drawer lateral file cabinet 1 3/1/1999 $ 550.00
2 drawer lateral file cabinet 1 3/1/1999 $ 420.00
Cannon QS200 typewriter 1 1/15/1999 $ 170.00
Cannon P126 D printing calculator 1 1/15/1999 $ 115.00
IBICO 1006 printing calculator 1 1/15/2000 $ 26.00
Motorola Radius SP10 3
GE Microwave 1 1/15/1999 $ 220.00
counter height refrigerator 1 1/15/1999 $ 320.00
office supplies (see inventory) 1
Copystar CS2221 copier 1 7/15/1999 Total office Systems lease
NT work station w/printer 2 gateway 1629006PC $ 3,600.00
Water dispenser (hot & cold) 1 1/15/2000 McKesson Water rental
LDC750 fax machine 1 7/15/1999 Total office Systems lease
Office Pro Cherry Collection
36" desk 3 1/26/2000 32951726 / 32951726 $ 420.00
36" hutch 2 1/26/2000 719506391 $ 400.00
peninsula 1 1/26/2000 31950289 $ 160.00
drawer 1 1/26/2000 31948574 $ 60.00
light pak 2 1/26/2000 $ 80.00
lateral file 1/26/2000 71939229 $ 250.00
corner desk 1 1/26/2000 31001257 $ 200.00
2 drawer file 1 1/26/2000 31002686 / 310022676 $ 320.00
3 drawer file 2 1/26/2000 31003304 $ 160.00
keyboard tray 1 1/26/2000 31952369 $ 60.00
task chair 1
1
1
1
1
40
PREVENTIVE MAINTENANCE PROGRAM
TOOL LIST
FOR
CENTRE POINTE 225
CATEGORY DESCRIPTION OWNERSHIP SERIAL/ASSET #
- -------- ----------- --------- --------------
ELECTRICAL TEST
1- 1/2" conduit bender AIP
1- 3/4" conduit bender AIP
1- Amp clamp-on meter AIP
1- GB wire strippers AIP
1- insulated wire cutters AIP
1- long nose pliers AIP
1- plastic fuse puller AIP
1- plug-in wiring tester AIP
1- set of allen wrenches AIP
1- set of screwdrivers AIP
1- standard pliers AIP
1- utility knife AIP
HAND TOOLS 1- 1 1/4 plastic gas tank AIP
1- 10 pc. Hex head socket set AIP
1- 12" channel lock pliers AIP
1- 12" crescent wrench AIP
1- 16 oz. claw hammer AIP
1- 3 piece visegrip set AIP
1- 5 piece tap and die set AIP
1- 6" 3pt. screwdriver AIP
1- 8" flat tip screwdriver AIP
1- 99 pc. Stanley socket set AIP
1- bench vise AIP
1- Bosch 1194 VSR drill AIP
1- carpenters square AIP
1- caulking gun AIP
1- combination L-square AIP
1- Dead blow hammer AIP
1- DeWalt cordless drill AIP
1- drill bit set AIP
1- Echo ES100 leaf blower AIP
1- flammable liquid cabinet AIP
1- garden hoses- 3/4" 150 Ft AIP
1- Landa pressure washer AIP
1- Large bearing puller AIP
1- maint. inspection mirror AIP
1- pair of diagonal cutters AIP
1- pair of linesman pliers AIP
1- Portable air compressor AIP
41
CATEGORY DESCRIPTION OWNERSHIP SERIAL/ASSET #
- -------- ----------- --------- --------------
HAND TOOLS 1- propane torch AIP
1- rigid pipe cutter AIP
1- set of 5 bastard files AIP
1- small torpedo level AIP
1- Stanley Comb. wrench set AIP
1- Starrett hacksaw AIP
1- steel fish tape-200 ft. AIP
1- storage bin- metal frame AIP
1- straight tin snips AIP
1- tool cabinet AIP
1- Tubing bender AIP
1- wet/dry vacuum 8 Gal. AIP
1- wheel grinder AIP
1- Zircon stud sensor AIP
1- 4 wheel door dolly AIP
2- batteries for drill AIP
2- elect. extension cord 25 Ft. AIP
2- extension poles- fibergl. AIP
2- metal dust pans AIP
2- shovels AIP
2- storage cabinets AIP
3- leaf rakes AIP
3- plastic 2 Gal. Gas tanks AIP
3- push brooms AIP
5- 5 gallon gas tanks AIP
6- elect. extension cord 50 Ft AIP
HVAC TOOLS 1- Dickson temp. recorder AIP
1- Electronic charging scale AIP
1- Fluke electrical meter AIP
1- Fluke thermometer AIP
1- Infrared thermometer AIP
1- Refrigeration vacuum pump AIP
1- RS-3 Amprobe AIP
1- Superheat thermometer AIP
LADDERS 1- 16 foot extension ladder AIP
1- 8 ft. Fiberglass ladder AIP
1- wooden 6 Ft. ladder AIP
4- fiberglass 6 Ft. ladders AIP
MISCELLANEOUS ITEMS 1- first aid kit AIP
1- Nextel cellular phone AIP
1- refrigerator for shop AIP
1- Sharp microwave AIP
42
+CATEGORY DESCRIPTION OWNERSHIP SERIAL/ASSET #
- --------- ----------- --------- --------------
MISCELLANEOUS ITEMS 2- Motorola radios AIP
2- Pagers AIP
2- sets of raingear and boots AIP
3- 6 foot lockers AIP
PLUMBING 1- 10" pipe wrench AIP
1- 2.5 lb. hammer AIP
1- 24" pipe wrench AIP
1- 8" vise grips AIP
1- dolly for snake AIP
1- faucet handle puller AIP
1- offset hex wrench AIP
1- Ridgid 75' drain snake AIP
1- Ridgid pipe cutter AIP
1- sink basin wrench AIP
1- standard pliers AIP
1- strainer nut wrench AIP
1- universal wrench AIP
2- plastic tool boxes AIP
UTILITYMANS TOOLS 1- 1/4" nut driver AIP
1- 10" crescent wrench AIP
1- 3/8" nut driver AIP
1- 35' Stanley tape measure AIP
1- 5/16" nut driver AIP
1- 6" crescent wrench AIP
1- channel lock pliers AIP
1- flat tip screwdriver AIP
1- Klein awl AIP
1- linesman pliers AIP
1- mag flashlight AIP
1- needle nose pliers AIP
1- phillips screwdriver AIP
1- set of allen wrenches AIP
1- set of smooth jaw pliers AIP
1- tool belt and pouch AIP
1- torpedo level AIP
1- utility knife AIP
43
PERSONAL PROPERTY AT NORTHVIEW BUSINESS CENTER SHOP
- One fax machine
- One personal computer and printer
- One telephone
- Two desks
- One old pressure washer (broken)
- One microwave and refrigerator
- One key cutting machine
- One sprayer
- One grinder
- One drill
- One electronic charging meter
- One shovel
- Three extension cords
- One post hole digger
- One floor scraper
- One sledge hammer
- One hand roto rooter
- Four tool cabinets
- Two shelves
- Channel locks
- Hammer
- Water gun
- Measuring tape
- Seven screw drivers
- One caulking gun
- One spud wrench
- One ten-piece wrench set
- Three pliers
- One pipe wrench
- One level
- One flashlight
- One pager
- One chisel
- One chalk line reel
- One four way water key
- 4" jaw vise
- Pair of gloves
- Goggles
- Caution tape
- One can of WD-40
44
- Electrical meter
- Rubber boots
- Two hole saws
- One set of gauges for testing and charging freon
- One spatula
- One digital hygrometer/thermometer
- One pair of knees pads
- Four chairs
- One radio
- Two ladders
- One dolly
- One wet vacuum
- Three water hoses
- One torch
- One squeegee
- One blower
- One rake
45
EXHIBIT C
BILL OF SALE, ASSIGNMENT AND ASSUMPTION
---------------------------------------
(name of property)
THIS BILL OF SALE, ASSIGNMENT AND ASSUMPTION is made as of the _____
day of __________________, by and between _____________________________________,
a _______________________ ("Assignor"), and _______________, a ____________
("Assignee").
WITNESSETH:
For good and valuable consideration, receipt and sufficiency of which
are hereby acknowledged Assignor hereby agree as follows:
1. Assignor hereby sells, transfers, assigns and conveys to Assignee
the following:
a. All right, title and interest of Assignor in and to all
tangible personal property ("Personalty") set forth in the inventory on Exhibit
A attached hereto and made a part hereof, located in the County of __________,
State of ____________, as more particularly described in Exhibit B attached
hereto and made a part hereof ("Real Property"), but excluding tangible
personal property owned or leased by Assignor's property manager or the tenants
of the Real Property under the Tenant Leases (as defined below).
b. All right, title and interest of Assignor in and to those
certain leases described on Exhibit C attached hereto and made a part hereof
(the "Tenant Leases"), relating to the leasing of space in the Real Property
and all of the rights, interests, benefits and privileges of the lessor
thereunder, and to the extent Assignee has not received a credit therefor under
the Purchase Agreement (as defined below), all prepaid rents and security and
other deposits held by Assignor under the Tenant Leases and not credited or
returned to tenants, but subject to all terms conditions, reservations and
limitations set forth in the Tenant Leases. Assignor hereby represents and
warrants to Assignee that Assignor is the landlord under the Leases.
c. To the extent assignable, all right, title and interest in
and to those certain contracts set forth on Exhibit D attached hereto and made
a part hereof, and all warranties, guaranties, indemnities and claims
(including, without limitation, for workmanship, materials and performance) and
which exist or may hereafter exist against any contractor, subcontractor,
manufacturer or supplier or laborer or other services relating thereto
(collectively, the "Contracts").
2. This Bill of Sale, Assignment and Assumption is given pursuant to
that certain Agreement of Sale and Purchase (as amended, the "Purchase
Agreement ") dated as of _____________, between Assignor and Assignee,
providing for, among other things, the conveyance of the Personalty, the Tenant
Leases and the Contracts.
3. As set forth in Article 11 of the Purchase Agreement, which is
hereby incorporated by reference as if herein set out in full and except as set
forth herein or in the Purchase Agreement, the property conveyed hereunder is
conveyed by Assignor and accepted by Assignee AS IS, WHERE IS, AND WITHOUT ANY
WARRANTIES OF WHATSOEVER NATURE, EXPRESS OR IMPLIED, EXCEPT AS EXPRESSLY SET
FORTH HEREIN AND IN THE PURCHASE AGREEMENT, IT BEING THE INTENTION OF ASSIGNOR
AND ASSIGNEE EXPRESSLY TO NEGATE AND EXCLUDE ALL WARRANTIES, INCLUDING, WITHOUT
LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR ANY
PARTICULAR PURPOSE, WARRANTIES CREATED BY ANY AFFIRMATION OF FACT OR PROMISE OR
BY ANY DESCRIPTION OF THE PROPERTY CONVEYED HEREUNDER, OR BY ANY SAMPLE OR
46
MODEL THEREOF, AND ALL OTHER WARRANTIES WHATSOEVER CONTAINED IN OR CREATED BY
THE ___________ UNIFORM COMMERCIAL CODE.
4. Assignee hereby accepts the assignment of the Personalty, the Tenant
Leases and the Contracts and agrees to assume and discharge, in accordance with
the terms thereof, all of the obligations thereunder arising on or after the
date hereof.
5. Assignee agrees to indemnify and hold harmless Assignor from any
cost, liability, damage or expense (including attorneys' fees) arising out of or
relating to Assignee's failure to perform any of the foregoing obligations
arising from and accruing on or after the date hereof.
6. Assignor agrees to indemnify and hold harmless Assignee from any
cost, liability, damage or expense (attorneys' fees) arising out of or relating
to Assignor's failure to perform any of the obligations of Assignor under the
Tenant Leases or Contracts, to the extent accruing prior to the date hereof.
7. This Bill of Sale, Assignment and Assumption may be executed in any
number of counterparts, each of which shall be deemed an original, but all of
which shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Bill of
Sale, Assignment and Assumption as of the date first above written.
ASSIGNOR:
,
------------------------
a
-----------------------
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
ASSIGNEE:
,
------------------------
a
-----------------------
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
[INSERT APPROPRIATE ACKNOWLEDGMENTS FOR THE STATE]
Exhibit A Personalty
Exhibit B Real Property
Exhibit C Tenant Leases
Exhibit D Contracts
47
EXHIBIT D
[INTENTIONALLY LEFT BLANK]
48
EXHIBIT E
NOTICE TO TENANTS
______________, 2000
Dear Tenant:
You are hereby notified that _________ Real Estate Limited Partnership
("Seller"), the current owner of [Property] in [City, State] (the "Property")
and the current owner of the landlord's interest in your lease in the Property,
has sold the Property to [Purchaser] ("New Owner"), as of the above date. In
connection with such sale, Seller has assigned and transferred its interest in
your lease and any and all security deposits thereunder or relating thereto to
New Owner, and New Owner has assumed and agreed to perform all of the landlord's
obligations under your lease (including any obligations set forth in your lease
to repay or account for any security deposits thereunder from and after such
date).
Accordingly, (a) all your obligations under the lease from and after the date
hereof, including your obligation to pay rent, shall be performable to and for
the benefit of New Owner, its successors and assigns, and (b) all the
obligations of the landlord under the lease, including any obligations to repay
or account for any security deposits hereunder, shall be the binding obligation
of New Owner and its successors and assigns. Unless and until you are otherwise
notified in writing by New Owner, the address of New Owner for all purposes
under your lease is:
Very truly yours,
SELLER:
,
------------------------
------------------------
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
NEW OWNER:
,
------------------------
------------------------
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
49
EXHIBIT F
EXISTING LOANS
(IN THOUSANDS)
TOTAL OUTSTANDING LOAN BALANCE AS OF 2-28-01 $156.540
Loans to be Paid at Closing
Security Life $ 2.610
Aegon (Huntington) $ 4.224
--------
$ 6.834
Loan Assumption assumed
National Realty Funding $ 23.630
Guarantee Federal $ 7.893
--------
$ 31.523
Loans to be assumed at Closing
Nationwide $ 34.083
Aegon $ 84.100
--------
$118.183
LOAN ASSUMPTION RANGE $118.183 - $149.706
50
EXHIBIT G
LIST OF ASSET MANAGERS
PROPERTY MANAGEMENT
PROPERTY COMPANY PROPERTY MANAGER METRO AREA ST
- -------- ------- ---------------- ---------- --
Academy Point Sierra Tammy Begley Colorado Springs CO
Aerotech Sierra Tammy Begley Colorado Springs CO
Alfred AIP Fatima Vegas Santa Clara CA
Avion AIP Beth Cupit Dallas TX
Battlefield Cambridge Betty Rose Manassas VA
Baytech Park AIP Fatima Vegas San Jose CA
Black Canyon AIP Brad Clauson Phoenix AZ
Bridgeway AIP Fatima Vegas Newark CA
Cameron Creek USAA Paula Boyd Austin TX
Central Park AIP Beth Cupit Dallas TX
Centre Pointe AIP Fatima Vegas Walnut Creek CA
Clyde AIP Fatima Vegas Mountain View CA
Columbia USAA Brenna Walraven Aliso Viejo CA
Corporex Plaza I USAA Bill Ante Tampa FL
Gibraltar AIP Fatima Vegas Sunnyvale CA
Humboldt AIP Fatima Vegas Sunnyvale CA
Huntington USAA Stephanie Perry Monrovia CA
Interlocken USAA Kim Sohl Griffith Broomfield CO
Inverness USAA Kim Sohl Griffith Denver CO
Junction II AIP Fatima Vegas San Jose CA
Metro AIP Brad Clauson Phoenix AZ
Northpointe B & C Cambridge Betty Rose Sterling VA
Northview Tarantino Les Buchanan Austin TX
Presidents Plaza USAA Bill Ante Tampa FL
SE Commercial USAA Paula Boyd Austin TX
Skyway AIP Patti Martin Dallas TX
Spring Valley AIP Beth Cupit Dallas TX
Stewart Plaza AIP Fatima Vegas Sunnyvale CA
Summit Park USAA Paula Boyd Austin TX
Woodmere AIP Fatima Vegas Folsom CA
51
EXHIBIT H
CAPITAL EXPENDITURE SCHEDULE
BUDGET ACTUAL INCURRED
CAPITAL INCURRED CAPITAL
CAPITAL ITEM REPAIRS DATE REPAIRS BUDGET VS. ACTUAL TI EAST WEST
------------ ------- -------- -------- -------------------- ---- ----
107 Woodmere Roof Repairs 17,080 (17,080)
----------- ------------- ---------------
107 Woodmere Parking Lot 7,258 Aug-00 8,865 1,607
------- ----------- ------------- ---------------
107 Woodmere -- --
------- ----------- ------------- ---------------
107 WOODMERE 24,338 8,865 (15,473) -- (15,473)
------- ----------- ------------- ---------------
3100 Alfred Parking Lot 7,605 Oct-00 7,605 --
----------- ------------- ---------------
3100 Alfred -- --
----------- ------------- ---------------
3100 Alfred -- --
------- ----------- ------------- ---------------
3100 ALFRED 7,605 7,605 -- -- --
------- ----------- ------------- ---------------
485 Clyde Parking Lot 12,395 Jul-00 6,895 (5,500)
----------- ------------- ---------------
485 Clyde --
----------- ------------- ---------------
485 Clyde --
------- ----------- ------------- ---------------
485 CLYDE 12,395 6,895 (5,500) -- (5,500)
------- ----------- ------------- ---------------
Academy Point Shower Stall Repairs 15,000 Sep-00 6,561 (8,439)
----------- ------------- ---------------
Academy Point Under budget -- Sep-00 8,439 8,439
----------- ------------- ---------------
Academy Point Seal Parapet Caps 16,000 (16,000)
------- ----------- ------------- ---------------
ACADEMY POINT 31,000 15,000 (16,000) -- (16,000)
------- ----------- ------------- ---------------
AeroTech Water-proof Buildings 30,000 -- (30,000)
----------- ------------- ---------------
AeroTech -- --
----------- ------------- ---------------
AeroTech -- --
------- ----------- ------------- ---------------
AEROTECH 30,000 -- (30,000) -- (30,000)
------- ----------- ------------- ---------------
Battlefield Parking Lot 60,000 (60,000)
----------- ------------- ---------------
Battlefield Water-proof Buildings -- Sep-00 63,669 63,669
----------- ------------- ---------------
Battlefield -- --
----------- ------------- ---------------
Battlefield -- --
------- ----------- ------------- ---------------
BATTLEFIELD 60,000 63,669 3,669 3,669 --
------- ----------- ------------- ---------------
Bridgeway Tech Traffic Signal 39,000 Jun-00 17,096 (21,904)
----------- ------------- ---------------
Bridgeway Tech Under budget -- Jun-00 21,904 21,904
----------- ------------- ---------------
Bridgeway Tech Curling Slab 18,300 Mar-00 16,630 (1,670)
----------- ------------- ---------------
Bridgeway Tech Under budget -- Mar-00 1,670 1,670
------- ----------- ------------- ---------------
BRIDGEWAY TECH 57,300 57,300 -- -- --
------- ----------- ------------- ---------------
Centre Pointe Roof Replace #225 44,650 (44,650)
----------- ------------- ---------------
Centre Pointe Lobby Restoration 45,000 Apr-00 5,240 (39,760)
----------- ------------- ---------------
Centre Pointe Restroom Renovate 17,000 (17,000)
----------- ------------- ---------------
Centre Pointe -- --
------- ----------- ------------- ---------------
CENTRE POINTE 106,650 5,240 (101,410) -- (101,410)
------- ----------- ------------- ---------------
Columbia Corp. Expansion Joint 27,500 (27,500)
----------- ------------- ---------------
Columbia Corp. Painting 21,715 Jan-00 21,715 --
----------- ------------- ---------------
Columbia Corp. -- --
------- ----------- ------------- ---------------
COLUMBIA CORP. 49,215 21,715 (27,500) -- (27,500)
------- ----------- ------------- ---------------
Gibraltar Tech HVAC Replacement 15,000 Jun-00 6,284 (8,716)
----------- ------------- ---------------
Gibraltar Tech -- --
------- ----------- ------------- ---------------
GIBRALTAR TECH 15,000 6,284 (8,716) -- (8,716)
------- ----------- ------------- ---------------
Inverness HVAC Replacement 28,200 Jun-00 25,188 (3,012)
----------- ------------- ---------------
Inverness Under budget -- Jun-00 3,012 3,012
----------- ------------- ---------------
Inverness Backflow Valve 2,000 (2,000)
----------- ------------- ---------------
Inverness -- --
------- ----------- ------------- ---------------
INVERNESS 30,200 28,200 (2,000) -- (2,000)
------- ----------- ------------- ---------------
Northpointe B Caulking 5,000 Aug-00 1,600 (3,400)
----------- ------------- ---------------
Northpointe B -- --
------- ----------- ------------- ---------------
NORTHPOINTE B 5,000 1,600 (3,400) (3,400) --
------- ----------- ------------- ---------------
Northpointe C Caulking 11,300 Aug-00 1,600 (9,700)
----------- ------------- ---------------
Northpointe C Concrete Repairs 3,900 Jan-00 3,900 --
------- ----------- ------------- ---------------
NORTHPOINTE C 15,200 5,500 (9,700) (9,700) --
------- ----------- ------------- ---------------
Northview Business Parking Lot 35,000 Sep-00 31,122 (3,878)
----------- ------------- ---------------
Northview Business TWC Battery Replacing -- Sep-00 6,625 6,625
----------- ------------- ---------------
Northview Business -- --
------- ----------- ------------- ---------------
NORTHVIEW BUSINESS 35,000 37,747 2,747 -- 2,747
------- ----------- ------------- ---------------
Presidents ADA Compliance 15,852 (15,852)
----------- ------------- ---------------
Presidents Fire Sprinkler 3,000 Sep-00 1,500 (1,500)
----------- ------------- ---------------
Presidents HVAC Replacement -- Jul-00 6,593 6,593
----------- ------------- ---------------
Presidents Parking Lot -- Apr-00 12,586 12,586
------- ----------- ------------- ---------------
PRESIDENTS 18,852 20,679 1,827 1,827 --
------- ----------- ------------- ---------------
Summit Park Structural Review 3,500 (3,500)
----------- ------------- ---------------
Summit Park -- --
----------- ------------- ---------------
Summit Park -- --
------- ----------- ------------- ---------------
SUMMIT PARK 3,500 -- (3,500) -- (3,500)
------- ----------- ------------- ---------------
GRAND TOTAL 501,255 * 286,299 (214,956) (7,604) (207,352)
======= =========== ============= =============== ====== ========
(214,956)
52
EXHIBIT I
TEN LARGEST TENANTS
PROPERTY TENANT SF ANNUAL BASE RENT
-------- ------ ------- ----------------
1 Baytech Park Cisco Systems Inc 188,825 $3,512,145.00
2 Battlefield Business Park A T & T Resource Management Corporation 154,226 $1,079,582.04
3 Interlocken Office Park McData Corporation 121,970 $1,488,033.96
4 Northview Business Center MCI Telecommunications Corp. 111,366 $1,113,660.00
5 Bridgeway Technology Center InVision Technologies Inc 95,245 $1,051,504.80
6 485 Clyde Consilium, Inc. 61,600 $ 680,064.00
7 Humboldt Tech Center Digital Link Corporation 60,030 $1,111,875.60
8 Black Canyon Technical Center Sunstrand Aerospace 60,000 $ 504,000.00
9 107 Woodmere Lockheed Martin Tactical Systems, Inc. 57,496 $ 558,861.12
10 Northview Business Center Progressive County Mutual Insurance Company 49,519 $ 613,045.20
53
EXHIBIT J
ESTOPPEL CERTIFICATE FORM
Landlord:
--------------------------------
Tenant:
----------------------------------
Premises:
---------------------------------
Original Lease Date:
----------------------
Amendments:
-------------------------------
The undersigned Tenant under the above-referenced lease (the "LEASE") hereby
certifies to _________________ ("PURCHASER") and its successors and assigns, as
the prospective purchaser of the real property of which the premises demised
under the Lease is a part (the "PREMISES"), and to any lender providing
financing to Purchaser in connection with any loan secured by a mortgage of
such real property ("LENDER"), as follows:
(1) The copy of the Lease attached hereto as Schedule 1 is a true,
correct and complete copy of the Lease which is in full force
and effect and which has not been amended, supplemented or
changed other than as reflected in the documents attached
hereto as Schedule 1.
(2) The term of the lease commenced on ___________ and expires on
___________.
(3) Tenant is in possession of the Premises. Tenant has no right
or option to purchase all or any part of the Premises. Tenant
has not assigned, transferred or pledged the Lease or any
interest therein or sublet any portion of the Premises except
as follows:_________________________________.
(4) All rent has been paid through _______________________.
(5) No advance rental or other payment has been made in connection
with the Lease, except rental for the current month, and there
is no "free rent" or other concession, allowance or
reimbursement due under the remaining term of the Lease,
except ___________________________________.
(6) A security deposit in the amount of $_____________ is being
held by Landlord. Landlord is not holding any other deposits
under the Lease.
54
(7) Tenant has no defenses or set-offs to the payment of rent. All
obligations and conditions under the Lease to be performed to
date by Landlord have been satisfied, including, without
limitation, any construction and/or work-letter obligations,
except as follows: ________________________________.
(8) There are no outstanding leasing or other commissions or
leasing fees to be paid by Landlord under the Lease and there
are no leasing commissions or fees which will become due from
Landlord under the Lease in the event Tenant exercises any
renewal or expansion option, except as follows:
______________________.
(9) To the best of the undersigned's knowledge, there is no
existing event of default on the part of the Landlord or the
Tenant in any of the terms and conditions of the Lease and no
event has occurred which, with the passage of time or giving
of notice, or both, would constitute an event of default.
(10) The Lease is valid and in full force and effect and represents
the entire agreement between the parties, and the Lease has
not been amended, modified, supplemented, extended, renewed or
assigned, except as set forth on page 1 of this certificate.
(11) There are no actions, voluntary or involuntary, pending
against the Tenant or any guarantor of Tenant's obligations
under the bankruptcy laws of the United States or any state
thereof.
(12) This certification is made knowing that Purchaser and Lender
are relying upon the representations herein made.
TENANT:
Date: , 2000 By:
--------------------- -------------------------
Name:
-----------------------
Title:
----------------------
55
EXHIBIT K
COMMISSION SCHEDULE
OUTSTANDING TI AND LEASING COMMISSION OBLIGATIONS AS OF 10/6/00
TI FUNDED
TRANS. T.I. AMOUNT BY
PROJECT TENANT TYPE SQFT PER LEASE 10/06/00
- ------- ------ ---- ---- ----------- -----------
AeroTech bd Systems, Inc. New 6,109 $ 48,872 $ 43,110
Avion Yokogawa Renewal 6,879 $ 6,879 $ --
Black
Canyon Micro Photonix New 13,945 $ 69,725 $ 5,772
Central Graphics Imaging
Park Center, LTD Renewal 6,300 $ 12,600 $ --
Centre
Pointe Citibank, FSM Renewal 8,531 $ 15,000 $ --
Centre Sebastian
Pointe International New 4,294 $ 17,176 $ --
Columbia American Benefit New 10,449 $ 31,347 $ 20,697
Mortgage
Columbia UTMC
Microelectronic New 4,978 $ 24,890 $ 44,643
Corporex Tradesmen
International New 2,550 $ 28,050 $ --
Corporex Strategic
Technologies New 2,240
Huntington St. Matthews
Publishing New 1,493 $ 7,465 $ 6,600
Inverness Transtracheal Renewal 14,511 $ -- $ --
Metro Publishers
Management Corp Renewal 5,015 $ 6,269 $ 5,452
Metro Sun West
Foodservice Expansion 1,466 $ 1,261 $ 3,750
Northview Progressive
Insurance New 49,519 $247,595 $126,089
Presidents Kelly Services Renewal $ 5,625 $ --
Stewart Pharmacyclics,
Plaza Inc. New 7,360 $ 83,600 $ --
Totals $606,354 $256,112
COMM
TI AMOUNT FUNDED COMM
PROJECT BALANCE PER LEASE BY 10/06/00 BALANCE COMMENTS
- ------- ------- --------- ----------- ------- --------
AeroTech $ 5,762 $ --
Avion $ 6,879 $ -- TI will be complete by 10/31/00.
Black
Canyon $ 63,953 $ -- T is paying rent effective 6/1/00,
but will not be occupying the
premises due to competition with
the adjacent customer (Mayan
Networks). T.I.s to date include
architectural fees.
Central
Park $ 12,600 $ -- Per lease agreement customer can
complete any time during the lease
term.
Centre
Pointe $ 15,000 $ 21,395.74 $ 10,697.87 $10,697.87
Centre
Pointe $ 17,176 $ 29,474.02 $ 14,737.01 $14,737.01
Columbia $ 10,650 $ -- Came under budget and TI is
complete.
Columbia
$(19,753) $ 13,395.80 $ 10,819.70 $ 2,576.10 Tenant has been billed for overage.
Corporex
$ 28,050 $ --
Corporex
$ 3,132.42 $ 1,566.21 $ 1,566.21
Huntington
$ 865 $ --
Inverness $ -- $ 18,791.75 $ 9,395.88 $ 9,395.87 Deal was "As-Is"
Metro
$ 817 $ -- $4,800 cash allowance included in
lease along with touch up paint,
steam cleaning of carpeting and
replacement of burned out lights
in president's office.
Metro
$ (2,489) $ --
Northview
$121,506 $ --
Presidents $ 5,625 $ --
Stewart
Plaza $ 83,600 $ 70,864.75 $ 35,432.38 $35,432.37 Customer completed TI 10/03/00.
Totals $350,242 $ 157,054 $ 82,649 $74,405.43
56
EXHIBIT K
(CONTINUED)
COMMISSION SCHEDULE
CURRENT LEASING AGREEMENTS AS OF 10/4/00
- -------------------------------------------------------------------------------------------------------------------------
CURRENT AGREEMENT
--------------------------------------
PROPERTY LEASING COMPANY OWNERSHIP ENTITY EFFECTIVE DATE TERMINATION DATE
- ------------- --------------- ---------------- -------------- ----------------
Academy Point Sierra Properties, Inc. American Industrial 04-May-98 30 days written notice
Properties REIT
Aerotech Sierra Properties, Inc. American Industrial 04-May-98 30 days written notice
Properties REIT
Alfred Grubb & Ellis Commercial Real Estate American Industrial 01-Apr-00 31-Oct-00
Services Properties REIT
Avion Robert Lynn Company American Industrial 06-Jun-00 31-Dec-00
Properties REIT
Battlefield Cambridge Asset Advisors Ltd. AIP/Battlefield GP, Inc 12-Oct-98 12-Oct-01
Partnership
Baytech Park Grubb & Ellis Commercial Real Estate American Industrial 01-Apr-00 30-Sep-00
Services Properties REIT
Black Canyon Grubb & Ellis Commercial Brokerage American Industrial 20-Dec-99 24-Nov-00
Group Properties REIT
Bridgeway Grubb & Ellis Company American Industrial 01-May-00 31-Oct-00
Properties REIT
Cameron Creek Quorum Real Estate American Industrial 01-Mar-99 30 days written notice
Corporation Properties REIT
Central Park Robert Lynn Company American Industrial 06-Jun-00 31-Dec-00
Properties REIT
Centre Pointe Grubb & Ellis Company American Industrial 01-May-00 31-Oct-00
Properties REIT
Columbia Quorum Real Estate American Industrial 01-Mar-99 30 days written notice
Corporation Properties REIT
Corporex Plaza Quorum Real Estate American Industrial 01-Mar-99 30 days written notice
I Corporation Properties REIT
Gibraltar Grubb & Ellis Commercial Real Estate American Industrial 01-Apr-00 31-Oct-00
Services Properties REIT
- -----------------------------------------------
PROPERTY METRO AREA STATE
- -------- ---------- -----
Academy Point Colorado CO
Springs
Aerotech Colorado CO
Springs
Alfred Santa Clara CA
Avion Dallas TX
Battlefield Manassas VA
Baytech Park San Jose CA
Black Canyon Phoenix AZ
Bridgeway Newark CA
Cameron Creek Austin TX
Central Park Dallas TX
Centre Pointe Walnut Creek CA
Columbia Aliso Viejo CA
Corporex Plaza Tampa FL
I
Gibraltar Sunnyvale CA
57
- -------------------------------------------------------------------------------------------------------------------------
CURRENT AGREEMENT
--------------------------------------
PROPERTY LEASING COMPANY OWNERSHIP ENTITY EFFECTIVE DATE TERMINATION DATE
- ------------- --------------- ---------------- -------------- ----------------
Humboldt Grubb & Ellis Commercial Real Estate American Industrial 01-Apr-00 31-Oct-00
Services Properties REIT
Huntington Quorum Real Estate AIP Prop #3 01-Mar-99 30 days written notice
Corporation LP
Interlocken USAA Real Estate Management Company American Industrial 15-Jan-99 30 days written notice
Properties REIT
Inverness USAA Real Estate Management Company American Industrial 15-Jan-99 30 days written notice
Properties REIT
Junction II Grubb & Ellis Company American Industrial 01-May-00 31-Oct-00
Properties REIT
Metro Grubb & Ellis Commercial Brokerage American Industrial 20-Dec-99 24-Nov-00
Group Properties REIT
Northpointe B Cambridge Asset Advisors Ltd. American Industrial 12-Oct-98 12-Oct-01
Partnership Properties REIT
Northpointe C Cambridge Asset Advisors Ltd. American Industrial 12-Oct-98 12-Oct-01
Partnership Properties REIT
Northview Tarantino Properties Inc American Industrial 30-Apr-98 30 days written notice
Properties REIT
Presidents Quorum Real Estate American Industrial 01-Mar-99 30 days written notice
Plaza Corporation Properties REIT
SE Commercial Quorum Real Estate American Industrial 01-Mar-99 30 days written notice
Corporation Properties REIT
Skyway Bradford Realty Services of Dallas, American Industrial 24-Sep-99 31-Mar-00
Inc. Properties REIT
Stewart Plaza Grubb & Ellis Company American Industrial 01-May-00 31-Oct-00
Properties REIT
Summit Park Quorum Real Estate American Industrial 01-Mar-99 30 days written notice
Corporation Properties REIT
Woodmere Grubb & Ellis Commercial Real Estate American Industrial 01-Apr-00 31-Oct-00
Services Properties REIT
- ---------------------------------------------------
PROPERTY METRO AREA STATE
- -------- ---------- -----
Humboldt Sunnyvale CA
Huntington Monrovia CA
Interlocken Broomfield CO
Inverness Denver CO
Junction II San Jose CA
Metro Phoenix AZ
Northpointe B Sterling VA
Northpointe C Sterling VA
Northview Austin TX
Presidents Tampa FL
Plaza
SE Commercial Austin TX
Skyway Dallas TX
Stewart Plaza Sunnyvale CA
Summit Park Austin TX
Woodmere Folsom CA
o Any funds remaining in the "TI Balance" and the "Comm Balance" at the time
of Closing shall be credited to Purchaser.
58
EXHIBIT L
ADDITIONAL CLOSING DOCUMENTS
The following documents each in a form acceptable to the Title Company and
Seller:
COLORADO PROPERTIES:
1. Form DR 1083 to comply with the Disclosure/Withholding Provisions of
C.R.S. 39-22- 604.5.
2. Real Property Transfer Declaration - Form TD-1000.
3. Resolution or other suitable documentation from Seller authorizing the
sale of subject property and the execution of the necessary conveyance
documents.
4. Satisfactory Affidavit and Agreement indemnifying Commonwealth Land
Title Insurance Company ("CLTIC") against unfilled mechanic's liens
and materialmens liens.
5. Satisfactory Affidavit and Indemnity regarding possessory rights.
As to Inverness Business Park, Englewood, Colorado:
Duly executed Trust Affidavit for American Industrial Properties REIT
disclosing the name of the Trust, and the names and addresses of the
trust managers empowered to act pursuant to CRS 38-30-166, as amended.
TEXAS:
As to all Texas properties:
1. Copy of Trust Agreement of American Industrial Properties Trust to
determine authority of Trustee.
2. Owner's Affidavit as to Debts, Liens, Possession and Taxes.
As to Spring Valley Business Park, Richardson, Texas:
Verification from Secretary of State, Delaware, that the Certificate
of Limited Partnership Agreement for AIP Operating, L.P. (the
"Partnership") is properly filed.
2. Delivery of copy of Partnership Agreement of the Partnership to CLTIC
for determination of who has authority to act for the Partnership.
59
As to Summit Park, Travis County, Texas:
An estoppel from Seller, to the extent Seller is the applicable
Declarant, confirming payment of assessments and/or current
maintenance charges due pursuant to that certain (i) Declaration of
Sign and Landscaping Easements and Maintenance Covenants dated March
31, 1988 and recorded on May 2, 1988 in O.R. Book 10666, page 988,
Travis County, Texas, (ii) Declaration of Easements and Maintenance
Covenants dated March 31, 1988 in O.R. Book 10667, page 14, aforesaid
records, (iii) Private Access Easement and Maintenance Agreement dated
March 31, 1988 recorded on May 2, 1988 in O.R. Book 10667, page 1, and
(iv) Private Access Easement and Maintenance Agreement dated March 31,
1988 recorded on May 2, 1988 in O.R. Book 10666, page 975, aforesaid
records (collectively, the "Declarations") and further confirming that
the Property, as developed, complies with the terms and conditions of
the Declarations, and that no defaults exist with respect to the
Declarations.
Seller and Buyer must execute "System Form 090" entitled "Notice to
Purchasers of Real Property" at Closing.
As to Ben White Business Park Section 2, Phase 2, Travis County, Texas:
Seller to provide authority documentation required by CLTIC.
FLORIDA:
As to both Florida properties:
1. Affidavit satisfactory in form to CLTIC from an attorney authorized to
practice law in the State of Texas stating his opinion that American
Industrial Properties REIT is a Texas real estate investment trust
created in the State of Texas in accordance with the laws of the State
of Texas and is a legal entity which has the ability to own and convey
real property, which Affidavit must be recorded in the Public Records.
2. Memorandum satisfactory to CLTIC to be recorded in the Public Records
which confirms the trustees or officers authorized to execute deeds on
behalf of the REIT.
3. Seller/Borrower's Affidavit.
ARIZONA:
As to all Arizona properties:
1. Certified copy of Resolution of the Board of Trustees of American
Industrial Properties REIT authorizing the execution and delivery by
the proper parties of
60
the documents required to close this transaction. The Certification
must be given by parties other than those that are signing and must
state that the Resolution has not been revoked.
2. Preliminary inspection report by CLTIC and a subsequent inspection
immediately prior to recording of documents.
3. Certificate of Owner itemizing all Leases by name of tenant, date,
terms and any options to renew. Certificate must also state that there
are no rights of first refusal or options to purchase the Property.
As to Black Canyon, Phoenix, Arizona only:
Owner Affidavit and Indemnity for Black Canyon.
Affidavit of Property Value for Black Canyon.
As to Metro Business Park, Phoenix, Arizona only:
1. Owner's Affidavit and Indemnity for Black Canyon.
2. Affidavit of Property Value for Metro Business Park.
VIRGINIA
As to both Virginia properties:
1. Seller must deliver the Nonresident Real Property Owner Exemption
Certificate at closing.
2. Delivery by Seller of Seller's Affidavit.
3. Title Company requires delivery by Seller of a Comprehensive
Endorsement Affidavit.
4. Delivery to title company of the Trust Agreement for American
Industrial Properties REIT. (Northpointe B and C only)
5. Delivery of sufficient corporate authority documentation from
AIP/Battlefield, Inc., to satisfy title company requirements.
(Battlefield site only)
CALIFORNIA PROPERTIES:
As to all California properties:
1. Seller must provide to CLTIC a Seller's Affidavit.
2. Seller must deliver all documentation required of Seller by CLTIC
sufficient to allow CLTIC to issue the required extended coverage
owner's policies to Purchaser in the form of the currently issued
proforma title policies approved by Purchaser, including all
endorsements attached thereto.