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EXHIBIT 10.65
INDUSTRIAL PROPERTY PORTFOLIO
AGREEMENT OF PURCHASE AND SALE
This Agreement, dated as of April 30, 1998, is between Spieker
Northwest, Inc., a California corporation ("Seller"), and American Industrial
Properties REIT, a Texas Real Estate Investment Trust ("Buyer").
ARTICLE I
PURCHASE AND SALE OF PROPERTY
SECTION 1.1 SALE.
Seller agrees to sell to Buyer, and Buyer agrees to purchase from
Seller, subject to the terms, covenants and conditions set forth herein, that
certain real property located in Austin, Texas; Albuquerque, New Mexico;
Colorado Springs, Colorado; Phoenix, Arizona; and Tucson, Arizona, together
with any and all rights, privileges and easements appurtenant thereto owned by
Seller, which real property is more particularly described in EXHIBIT A
(comprised of EXHIBIT A-1 through EXHIBIT A-6) attached hereto and made a part
hereof (collectively the "Land"), together with all of Seller's right, title
and interest in all rights, privileges and easements appurtenant to the Land,
including, without limitation, all minerals, oil, gas and other hydrocarbon
substances on and under and that may be produced from the Land, as well as all
of Seller's right, title and interest in all development rights, land use
entitlements, including without limitation building permits, licenses, permits
and certificates, utilities commitments, air rights, water, water rights,
riparian rights, and water stock relating to the Land and any rights-of-way or
other appurtenances used in connection with the beneficial use and enjoyment of
the Land and all of Seller's right, title and interest in and to all roads,
easements, rights-of-way and alleys adjoining, serving or servicing the Land
(collectively, the "Appurtenances"); together with all of Seller's right, title
and interest in all improvements and fixtures located on the Land and
Appurtenances, and all of Seller's right, title and interest in all apparatus,
and equipment used in connection with the operation or occupancy of the Land
and Appurtenances, such as heating and air conditioning systems and facilities
used to provide any utility, refrigeration, ventilation, garbage disposal or
other services on the Land and Appurtenances, and along with all on-site
parking facilities (collectively, the "Improvements", and together with the
Land and Appurtenances, the "Real Property"); together with the personal
property owned by Seller, if any, located on the Real Property and used
exclusively in the operation or maintenance of the Real Property, as described
in SCHEDULE 1 attached hereto and made a part hereof but excluding any such
personal property in Seller's property management offices, if any, on the Real
Property (the "Personal Property"); together with any intangible personal
property now or hereafter owned by Seller and used in the use or operation of
the Real Property and Personal Property, including, without limitation,
Seller's rights, if any, to the use of any trade names or trademarks in
connection with the Real Property, provided that Seller makes no representation
or warranty as to whether Seller has rights to the use of any trade names or
trademarks or any other rights with respect to any trade names or trademarks,
and Seller's right, title and interest with respect to
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leases, rental agreements, subleases and tenancies affecting the Real Property
and Seller's interest in all security deposits, prepaid rents and lease
guaranties (collectively, the "Intangible Property"). The Real Property,
Personal Property and Intangible Property are collectively referred to herein
as the "Property".
SECTION 1.2 PURCHASE PRICE.
(a) The purchase price of the Property is Forty-Three Million
Five Hundred Thousand Dollars ($43,500,000) (the "Purchase Price"), allocated
as provided on Exhibit B.
(b) The Purchase Price shall be paid as follows:
(1) UPON THE EXECUTION OF THIS AGREEMENT BY BUYER AND
SELLER, BUYER SHALL DEPOSIT IN ESCROW WITH COMMONWEALTH LAND TITLE COMPANY OF
DALLAS (THE "TITLE COMPANY") AN ALL-CASH PAYMENT IN THE AMOUNT OF FOUR HUNDRED
THIRTY-FIVE THOUSAND DOLLARS ($435,000) (THE "DEPOSIT").
(2) THE DEPOSIT SHALL BE HELD IN AN INTEREST BEARING
ACCOUNT AND ALL INTEREST THEREON SHALL BE DEEMED A PART OF THE DEPOSIT. IF THE
SALE OF THE PROPERTY AS CONTEMPLATED HEREUNDER IS CONSUMMATED, THEN THE DEPOSIT
SHALL BE PAID TO SELLER AT THE CLOSING AND CREDITED AGAINST THE PURCHASE PRICE.
IF THE SALE OF THE PROPERTY IS NOT CONSUMMATED DUE TO SELLER'S DEFAULT
HEREUNDER, THEN, AS BUYER'S SOLE REMEDIES, BUYER MAY EITHER: (1) TERMINATE THIS
AGREEMENT AND RECEIVE A REFUND OF THE DEPOSIT, IN WHICH EVENT NEITHER PARTY
SHALL HAVE ANY FURTHER RIGHTS OR OBLIGATIONS HEREUNDER EXCEPT AS PROVIDED IN
SECTIONS 6.1, 9.3 AND 9.9 BELOW, OR (2) BUYER MAY ENFORCE SPECIFIC PERFORMANCE
OF THIS AGREEMENT. IF THE SALE IS NOT CONSUMMATED DUE TO ANY DEFAULT BY BUYER
HEREUNDER, THEN SELLER SHALL RETAIN THE DEPOSIT AS LIQUIDATED DAMAGES. THE
PARTIES HAVE AGREED THAT SELLER'S ACTUAL DAMAGES, IN THE EVENT OF A FAILURE TO
CONSUMMATE THIS SALE DUE TO BUYER'S DEFAULT, WOULD BE EXTREMELY DIFFICULT OR
IMPRACTICABLE TO DETERMINE. AFTER NEGOTIATION, THE PARTIES HAVE AGREED THAT,
CONSIDERING ALL THE CIRCUMSTANCES EXISTING ON THE DATE OF THIS AGREEMENT, THE
AMOUNT OF THE DEPOSIT IS A REASONABLE ESTIMATE OF THE DAMAGES THAT SELLER WOULD
INCUR IN SUCH EVENT. BY PLACING THEIR INITIALS BELOW, EACH PARTY SPECIFICALLY
CONFIRMS THE ACCURACY OF THE STATEMENTS MADE ABOVE AND THE FACT THAT EACH PARTY
WAS REPRESENTED BY COUNSEL WHO EXPLAINED, AT THE TIME THIS AGREEMENT WAS MADE,
THE CONSEQUENCES OF THIS LIQUIDATED DAMAGES PROVISION. THE FOREGOING IS NOT
INTENDED TO LIMIT BUYER'S OBLIGATIONS UNDER SECTIONS 6.1, 9.3 AND 9.9.
INITIALS: SELLER ________ BUYER _______
(3) THE BALANCE OF THE PURCHASE PRICE, WHICH IS FORTY-THREE
MILLION SIXTY-FIVE THOUSAND DOLLARS ($43,065,000), SHALL BE PAID TO SELLER IN
IMMEDIATELY AVAILABLE FUNDS, SUBJECT TO THE PRORATIONS AND ADJUSTMENTS AS
PROVIDED IN THIS AGREEMENT, AT THE CONSUMMATION OF THE PURCHASE AND SALE
CONTEMPLATED HEREUNDER (THE "CLOSING").
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ARTICLE II
CONDITIONS
SECTION 2.1 CONDITION PRECEDENT.
Buyer's obligation to purchase the Property is conditioned upon the
following:
(a) Buyer's review and approval of updated preliminary title
reports or commitments, together with copies of the underlying documents, and
any surveys of the Property in Seller's possession. Seller shall furnish to
Buyer a copy of such reports, together with the underlying documents, and any
surveys in Seller's possession, within three (3) days after the date Seller
receives a fully executed original of this Agreement (the "Delivery Period").
(b) Buyer's review and approval of all tenant leases and any
other occupancy agreements (as may have been amended, restated or renewed,
hereinafter collectively referred to as the "leases") affecting the Property.
Seller shall furnish to Buyer copies of the leases within the Delivery Period.
(c) Buyer's review and approval of the physical condition of
the Property.
(d) Buyer's review and approval of all zoning, land use,
building, environmental and other statutes, rules, or regulations applicable to
the Property.
(e) Subject to the provisions of the paragraph below, Buyer's
review and approval of operating statements with respect to the Property for
1995, 1996, 1997 and for January and February 1998, and if prepared, March
1998, certificates of occupancy, licenses, approvals and permits regarding the
Property, plans and specifications, soils and other reports, service contracts,
and other contracts or documents which will be binding on Buyer after Closing.
Seller shall deliver to Buyer within the Delivery Period copies of all such
items in Seller's possession or in the possession of any current third party
property manager of Seller which pertain to the Property; provided, however,
Seller shall make any plans and specifications in its possession and any such
contracts or documents of significance to the Property in its possession which
pertain to the Property, available at the Property for Buyer's inspection and
copying, at Buyer's expense, during reasonable business hours, and in lieu of
Seller's furnishing Buyer with copies thereof. Notwithstanding the foregoing,
Buyer's review shall not include a review of Seller's internal economic
memoranda or reports, attorney-client privileged materials or Seller's
appraisals of the Property, if any.
(f) Buyer's review and approval of any other matters Buyer
deems relevant to the Property, including, but not limited to, the following
items to the extent in Seller's possession: a current rent roll, a schedule of
the Personal Property, copies of the most recent tax bills, security incident
reports, a schedule of filed litigation regarding or affecting the Property, a
current aged receivables report, and copies of construction and equipment
warranties.
(g) Seller's agreement to cooperate, and to cause its third
party employees, including without limitation its property manager and
consultants, to cooperate with Buyer and Buyer's agents and consultants during
the Contingency Period.
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SECTION 2.2 CONTINGENCY PERIOD.
(a) Buyer shall have until April 27, 1998 to review and approve
the matters described in Sections 2.1(b)-(g) above in Buyer's sole discretion
and Buyer shall have until April 29, 1998, to review and approve the matters
described in 2.1(a) (such period being referred to herein as the "Contingency
Period"). If Buyer determines to proceed with the purchase of the Property,
then Buyer shall, before the end of the Contingency Period, notify Seller in
writing that Buyer has approved all of the matters described in Section
2.1(a)-(g) above subject to other termination rights contained herein,
including the right to terminate this Agreement pursuant to subsection 4.1(c)
below. If before the end of the Contingency Period, Buyer fails to provide
written notice of its election to proceed with the purchase of the Property or
to terminate this Agreement, then Buyer shall be deemed to have elected to
terminate this Agreement. In the event Buyer elects to terminate this Agreement
by written notice to Seller or is deemed to have elected to terminate this
Agreement pursuant to the terms hereof, the Deposit and any accrued interest
thereon shall be returned to Buyer, and neither party shall have any further
rights or obligations hereunder except as provided in Sections 6.1, 9.3 and 9.9
below.
(b) Promptly following the execution of this Agreement, Seller
shall provide to Buyer's representatives and its independent accounting firm
access to all financial and other information relating to the operation of the
Property which is Seller's possession. Seller shall authorize any attorneys who
have represented Seller in any material litigation pertaining to or affecting
the Property to respond, at Buyer's expense, to inquiries from Buyer's
representatives and independent accounting firm. If this Agreement terminates
prior to the Closing, other than by reason of a default of Seller, Buyer shall
deliver to Seller copies of any audited financial statements of the Property
prepared for Buyer and assign to Seller without warranty all of Buyer's rights
thereto.
ARTICLE III
BUYER'S EXAMINATION
SECTION 3.1 REPRESENTATIONS AND WARRANTIES OF SELLER.
Subject to the provisions of Sections 3.2 and 3.3 below, Seller hereby
makes the following representations and warranties, provided that Seller makes
no representations or warranties with respect to the matters (the "Disclosure
Items") which will be set forth in SCHEDULE 2 which Seller shall deliver to
Buyer within five (5) business days after the mutual execution and delivery
hereof and which at that time will be attached hereto and made a part hereof.
Notwithstanding anything to the contrary contained herein or in any document
delivered in connection herewith, Seller shall have no liability with respect
to the Disclosure Items.
(a) Seller has not (i) made a general assignment for the
benefit of creditors, (ii) filed any voluntary petition in bankruptcy or
suffered the filing of any involuntary petition by Seller's creditors, (iii)
suffered the appointment of a receiver to take possession of all, or
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substantially all, of Seller's assets, (iv) suffered the attachment or other
judicial seizure of all, or substantially all, of Seller's assets, (v) admitted
in writing its inability to pay its debts as they come due, or (vi) made an
offer of settlement, extension or composition to its creditors generally.
(b) Seller is not a "foreign person" as defined in Section 1445
of the Internal Revenue Code of 1986, as amended (the "Code") and any related
regulations.
(c) This Agreement (i) has been duly authorized, executed and
delivered by Seller, and (ii) does not violate any provision of any agreement
or judicial order to which Seller is a party or to which Seller or the Property
is subject.
(d) Seller has the power and authority to enter into this
Agreement and to perform its obligations hereunder.
(e) To the best of Seller's knowledge, the only tenant leases
in force for the Property are set forth in the tenant list attached hereto as
EXHIBIT C and made a part hereof and to the best of Seller's knowledge, there
are no tenant improvement obligations of Landlord except as set forth in the
leases or as otherwise disclosed to Buyer in writing.
(f) To the best of Seller's knowledge, no consents are required
for the performance of Seller's obligations hereunder.
(g) To the best of Seller's knowledge, Seller has not received
written notice from any Significant Tenant, as defined below, that Seller has
not performed its material obligations under such Significant Tenant's lease.
As used herein, the term Significant Tenant shall mean any tenant occupying
five percent (5%) or more of any one of the six (6) real properties comprising
the Real Property.
(h) To the best of Seller's knowledge, the only service
contracts and amendments thereto that will be in effect on the Closing Date are
described on SCHEDULE 5 attached hereto and made a part hereof, subject to the
provisions of Article VII below.
(i) As of the date of this Agreement, Seller has not received
any written notice of any pending or threatened condemnation of all or any
portion of the Property.
(j) As of the date of this Agreement, Seller has not received
written notice of any litigation that is pending or threatened with respect to
the Property, except (i) litigation fully covered by insurance policies
(subject to customary deductibles), or (ii) litigation set forth in SCHEDULE 6
attached hereto and made a part hereof.
(k) As of the date of this Agreement, except as set forth in
the Due Diligence Materials, as defined below, Seller has not received any
written notice from any governmental authority that all or any portion of any
Property is in material violation of any applicable building codes or any
applicable environmental law (relating to clean-up or abatement), zoning law or
land use law, or any other applicable local, state or federal law or regulation
relating to the Property, which material violation has not been cured or
remedied prior to the date of this Agreement.
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(l) Seller has not granted any option or right of first refusal
or first opportunity to any party of acquire any fee or ground leasehold
interest in any portion of the Property.
Each of the representations and warranties of Seller contained in this
Section 3.1: (1) is true as of the date of this Agreement; (2) shall be deemed
remade by Seller, and shall be true in all material respects as of the date of
Closing, subject to (A) any Exception Matters (as defined below), (B) the
Disclosure Items, and (C) other matters expressly permitted in this Agreement
or otherwise specifically approved in writing by Buyer including, without
limitation, the documents, surveys, reports, items and other materials
delivered to or made available to Buyer pursuant to Article II hereof (the "Due
Diligence Materials"), and (3) shall survive the close of escrow as provided in
Section 3.3 below.
SECTION 3.2 NO LIABILITY FOR EXCEPTION MATTERS.
(a) As used herein, the term "Exception Matter" shall refer to
a matter disclosed to Buyer in writing or discovered by Buyer before the
Closing, that would make a representation or warranty of Seller contained in
this Agreement untrue or incorrect, including, without limitation, matters
disclosed in writing to Buyer by Seller or by any other person. If Buyer
obtains knowledge of any Exception Matter after the date hereof, Buyer may
terminate this Agreement and receive a return of the Deposit upon written
notice to Seller within five (5) days after Buyer learns of such Exception
Matter if Seller elects not to cure or remedy any such Exception Matter.
(b) Buyer shall promptly notify Seller in writing of any
Exception Matter of which Buyer obtains knowledge before the Closing. If Buyer
obtains knowledge of any Exception Matter before the Closing, but nonetheless
elects to proceed with the acquisition of the Property, Buyer shall consummate
the acquisition of the Property subject to such Exception Matter and Seller
shall have no liability with respect to such Exception Matter, notwithstanding
any contrary provision, covenant, representation or warranty contained in this
Agreement or in any document delivered pursuant to the terms hereof. If Buyer
elects to terminate this Agreement on the basis of any Exception Matter, Buyer
shall so notify Seller in writing within five (5) days following Buyer's
discovery of the Exception Matter, and the Deposit shall be returned to Buyer.
Buyer's failure to give such notice within such 5-day period shall be deemed a
waiver by Buyer of such Exception Matter. Upon any such termination of this
Agreement, neither party shall have any further rights or obligations
hereunder, except as provided in Sections 6.1, 9.3 and 9.9 below. Seller shall
have no obligation to cure or remedy any Exception Matter, and, subject to
Buyer's right to terminate this Agreement as set forth above, Seller shall have
no liability whatsoever to Buyer with respect to any Exception Matters.
SECTION 3.3 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
The representations and warranties of Seller and Buyer contained
herein shall survive six months from the Closing, except that Buyer's
representations and warranties in Sections 3.5(d) shall survive indefinitely.
Any claim which Buyer or Seller may have at any time against the other for a
breach of any such representation or warranty (other than those contained in
Sections 3.5(d), whether known or unknown, which is not asserted by written
notice to Seller or Buyer
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within nine (9) months after the Closing shall not be valid or effective, and
the party shall have no liability with respect thereto.
SECTION 3.4 SELLER'S KNOWLEDGE
For purposes of this Agreement and any document delivered at Closing,
whenever the phrase "to the best of Seller's knowledge" or the "knowledge" of
Seller or words of similar import are used, they shall be deemed to refer to
the current actual knowledge of Dennis Singleton and John Foster at the times
indicated only and not any implied, imputed or constructive knowledge, without
any independent investigation having been made or any implied duty to
investigate.
SECTION 3.5 REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
(a) Buyer represents and warrants to Seller that this Agreement
and all documents executed by Buyer which are to be delivered to Seller at
Closing do not and at the time of Closing will not violate any provision of any
agreement or judicial order to which Buyer is a party or to which Buyer is
subject.
(b) Buyer represents and warrants to Seller that Buyer has not
(i) made a general assignment for the benefit of creditors, (ii) filed any
voluntary petition in bankruptcy or suffered the filing of any involuntary
petition by Buyer's creditors, (iii) suffered the appointment of a receiver to
take possession of all, or substantially all, of Buyer's assets, (iv) suffered
the attachment or other judicial seizure of all, or substantially all, of
Buyer's assets, (v) admitted in writing its inability to pay its debts as they
come due, or (vi) made an offer of settlement, extension or composition to its
creditors generally.
(c) Buyer is duly formed and validly existing under the laws of
the State of Texas. Buyer has duly authorized, executed and delivered this
Agreement.
(d) Buyer is purchasing the Property as investment rental
property, and not for Buyer's own operations or use.
Each of the representations and warranties of Buyer contained in this
Section shall be deemed remade by Buyer as of the Closing and shall survive the
Closing as provided in Section 3.3 above.
SECTION 3.6 BUYER'S INDEPENDENT INVESTIGATION.
(a) Buyer acknowledges and agrees that it has been given or
will be given before the end of the Contingency Period, a full opportunity to
inspect and investigate each and every aspect of the Property, either
independently or through agents of Buyer's choosing, including, without
limitation:
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(1) ALL MATTERS RELATING TO TITLE, TOGETHER WITH ALL
GOVERNMENTAL AND OTHER LEGAL REQUIREMENTS SUCH AS TAXES, ASSESSMENTS, ZONING,
USE PERMIT REQUIREMENTS AND BUILDING CODES.
(2) THE PHYSICAL CONDITION AND ASPECTS OF THE PROPERTY,
INCLUDING, WITHOUT LIMITATION, THE INTERIOR, THE EXTERIOR, THE SQUARE FOOTAGE
WITHIN THE IMPROVEMENTS ON THE REAL PROPERTY AND WITHIN EACH TENANT SPACE
THEREIN, THE STRUCTURE, SEISMIC ASPECTS OF THE PROPERTY, THE PAVING, THE
UTILITIES, AND ALL OTHER PHYSICAL AND FUNCTIONAL ASPECTS OF THE PROPERTY. SUCH
EXAMINATION OF THE PHYSICAL CONDITION OF THE PROPERTY SHALL INCLUDE AN
EXAMINATION FOR THE PRESENCE OR ABSENCE OF HAZARDOUS MATERIALS, AS DEFINED
BELOW, WHICH SHALL BE PERFORMED OR ARRANGED BY BUYER AT BUYER'S SOLE EXPENSE.
FOR PURPOSES OF THIS AGREEMENT, "HAZARDOUS MATERIALS" SHALL MEAN INFLAMMABLE
EXPLOSIVES, RADIOACTIVE MATERIALS, ASBESTOS, POLYCHLORINATED BIPHENYLS, LEAD,
LEAD-BASED PAINT, UNDER AND/OR ABOVE GROUND TANKS, HAZARDOUS MATERIALS,
HAZARDOUS WASTES, HAZARDOUS SUBSTANCES, OIL, OR RELATED MATERIALS, WHICH ARE
LISTED OR REGULATED IN THE COMPREHENSIVE ENVIRONMENTAL RESPONSE, COMPENSATION
AND LIABILITY ACT OF 1980, AS AMENDED (42 U.S.C. SECTIONS 6901, ET SEQ.), THE
RESOURCES CONSERVATION AND RECOVERY ACT OF 1976 (42 U.S.C. SECTION 6901, ET
SEQ.), THE CLEAN WATER ACT (33 U.S.C. SECTION 1251, ET SEQ.), THE SAFE DRINKING
WATER ACT (14 U.S.C. SECTION 1401, ET SEQ.), THE HAZARDOUS MATERIALS
TRANSPORTATION ACT (49 U.S.C. SECTION 1801, ET SEQ.), THE AND TOXIC SUBSTANCE
CONTROL ACT (15 U.S.C. SECTION 2601, ET SEQ.), THE ARIZONA ENVIRONMENTAL
QUALITY ACT, A.R.S. SECTIONS 49-201, ET SEQ.; THE ARIZONA "STATE SUPERFUND"
PROVISIONS, A.R.S. SECTIONS 49-281, ET SEQ.; THE ARIZONA SOLID WASTE MANAGEMENT
PROVISIONS, A.R.S. SECTIONS 49-701, ET SEQ.; THE ARIZONA HAZARDOUS WASTE
MANAGEMENT ACT, A.R.S. SECTIONS 49-921, ET SEQ.; AND THE ARIZONA UNDERGROUND
STORAGE TANK PROVISIONS, A.R.S. SECTIONS 49-1001, AND ANY OTHER APPLICABLE
FEDERAL, STATE OR LOCAL LAWS.
(3) ANY EASEMENTS AND/OR ACCESS RIGHTS AFFECTING THE
PROPERTY.
(4) THE LEASES AND ALL MATTERS IN CONNECTION THEREWITH,
INCLUDING, WITHOUT LIMITATION, THE ABILITY OF THE TENANTS TO PAY THE RENT AND
THE ECONOMIC VIABILITY OF THE TENANTS.
(5) THE SERVICE CONTRACTS AND ANY OTHER DOCUMENTS OR
AGREEMENTS OF SIGNIFICANCE AFFECTING THE PROPERTY.
(6) ALL OTHER MATTERS OF MATERIAL SIGNIFICANCE AFFECTING
THE PROPERTY.
(b) BUYER SPECIFICALLY ACKNOWLEDGES AND AGREES THAT SELLER IS
SELLING AND BUYER IS PURCHASING THE PROPERTY ON AN "AS IS WITH ALL FAULTS"
BASIS AND THAT BUYER IS NOT RELYING ON ANY REPRESENTATIONS OR WARRANTIES OF ANY
KIND WHATSOEVER, EXPRESS OR IMPLIED, FROM SELLER, ITS AGENTS, OR BROKERS AS TO
ANY MATTERS CONCERNING THE PROPERTY EXCEPT AS EXPRESSLY SET FORTH IN SECTION
3.1 ABOVE, INCLUDING WITHOUT LIMITATION: (i) the quality, nature, adequacy and
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physical condition and aspects of the Property, including, but not limited to,
the structural elements, seismic aspects of the Property, foundation, roof,
appurtenances, access, landscaping, parking facilities and the electrical,
mechanical, HVAC, plumbing, sewage, and utility systems, facilities and
appliances, the square footage within the improvements on the Real Property and
within each tenant space therein, (ii) the quality, nature, adequacy, and
physical condition of soils, geology and any groundwater, (iii) the existence,
quality, nature, adequacy and physical condition of utilities serving the
Property, (iv) the development potential of the Property, and the Property's
use, habitability, merchantability, or fitness, suitability, value or adequacy
of the Property for any particular purpose, (v) the zoning or other legal
status of the Property or any other public or private restrictions on use of
the Property, (vi) the compliance of the Property or its operation with any
applicable codes, laws, regulations, statutes, ordinances, covenants,
conditions and restrictions of any governmental or quasi-governmental entity or
of any other person or entity, (vii) the presence of Hazardous Materials on,
under or about the Property or the adjoining or neighboring property, (viii)
the quality of any labor and materials used in any improvements on the Real
Property, (ix) the condition of title to the Property, (x) the leases, service
contracts, or other agreements affecting the Property and (xi) the economics of
the operation of the Property.
SECTION 3.7 RELEASE.
(a) Without limiting the above, but subject to the
representations and warranties of Seller contained in Section 3.1 hereof, Buyer
on behalf of itself and its successors and assigns waives its right to recover
from, and forever releases and discharges, Seller, Seller's affiliates,
Seller's investment manager, the partners, trustees, beneficiaries,
shareholders, members, directors, officers, employees and agents of each of
them, and their respective heirs, successors, personal representatives and
assigns (collectively, the "Seller Related Parties"), from any and all demands,
claims, legal or administrative proceedings, losses, liabilities, damages,
penalties, fines, liens, judgments, costs or expenses whatsoever (including,
without limitation, attorneys' fees and costs), whether direct or indirect,
known or unknown, foreseen or unforeseen, that may arise on account of or in
any way be connected with (i) the physical condition of the Property including,
without limitation, all structural and seismic elements, all mechanical,
electrical, plumbing, sewage, heating, ventilating, air conditioning and other
systems, the environmental condition of the Property and Hazardous Materials
on, under or about the Property, or (ii) any law or regulation applicable to
the Property, including, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended (42 U.S.C.
Sections 6901, et seq.), the Resources Conservation and Recovery Act of 1976
(42 U.S.C. Section 6901, et seq.), the Clean Water Act (33 U.S.C. Section 1251,
et seq.), the Safe Drinking Water Act (14 U.S.C. Section 1401, et seq.), the
Hazardous Materials Transportation Act (49 U.S.C. Section 1801, et seq.), and
the Toxic Substance Control Act (15 U.S.C. Section 2601, et seq.), and any
other federal, state or local law.
SECTION 3.8 SURVIVAL.
The provisions of this Article III shall survive the Closing, subject
to the qualifications and limitations contained herein.
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ARTICLE IV
TITLE
SECTION 4.1 CONDITIONS OF TITLE.
At the Closing, Seller shall convey title to the Real Property to
Buyer by special warranty deeds (the "Deeds") subject to no exceptions other
than:
(a) Interests of tenants in possession;
(b) Non-delinquent liens for real estate taxes and assessments;
and
(c) Any exceptions disclosed by the preliminary title reports
and commitments and any amendments or supplements thereto delivered to Buyer
during the Contingency Period, or the Due Diligence Materials, and any other
exceptions to title which would be disclosed by an inspection and/or survey of
the Property, except for any exceptions which Seller, in Seller's sole
discretion, elects to remove from title pursuant to the provisions of this
Section below.
Buyer shall notify Seller in writing before the expiration of the
Contingency Period if Buyer has an objection to any of the aforesaid matters.
If Buyer does not give Seller timely written notice of any such objection, all
of the foregoing exceptions shall be the "Conditions of Title." If Buyer does
give Seller timely written notice of any such matters objected to by Buyer (the
"Disapproved Matters"), then Seller shall notify Buyer in writing within one
(1) business day after receipt, as to whether Seller will remove any of the
Disapproved Matters from title to the Property prior to Closing. Seller shall
have absolutely no obligation to remove any Disapproved Matter. If Seller
elects in writing to remove any Disapproved Matter, then Seller shall do so at
Seller's cost prior to Closing and the Conditions of Title shall include all
said matters referred to in clauses (b) and (c) above except for any such
Disapproved Matter removed by Seller. If Seller elects not to remove all such
Disapproved Matters or if Seller does not give Buyer written notice of its
election within the one (1) business day period, then this Agreement shall
terminate, the Deposit shall be returned to Buyer and neither party shall have
any further rights or obligations hereunder, except as provided in Section 6.1,
9.3 and 9.9 hereof unless on or before three (3) business days after Seller's
receipt of Buyer's Disapproved Matters, Buyer gave Seller written notice that
Buyer is waiving its objections to the Disapproved Matters and agrees in such
notice that the Disapproved Matters shall be part of the Conditions of Title.
If there are additional exceptions to title that were not disclosed to Buyer
during the Contingency Period and that are disclosed to Buyer after the
expiration of the Contingency Period, then Buyer shall have, as Buyer's sole
rights and remedies, the right to approve such additional exceptions and
proceed with the Closing or to terminate this Agreement as provided below.
Buyer shall notify Seller in writing on or before three (3) business days after
receiving notice of any additional exception to title as to whether Buyer
approves or disapproves such exceptions. Buyer's failure to give Seller written
notice of Buyer's approval during such three (3) business day period shall be
deemed an election by Buyer to disapprove the title exceptions. If Buyer
disapproves the additional exceptions by providing written notice to Seller
within said three (3) business day period, then this Agreement shall terminate
and the Deposit shall be returned to Buyer and neither party shall have any
further rights or obligations hereunder except as provided in Sections 6.1, 9.3
and 9.9
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below. If Buyer approves the additional title exceptions, such additional title
exceptions shall become part of the Conditions of Title.
By acceptance of the Deeds and the Closing of the purchase and sale of the
Property, (i) Buyer agrees it is assuming for the benefit of Seller all of the
obligations of Seller with respect to the Conditions of Title from and after
the Closing, and (ii) Buyer agrees that Seller shall have conclusively
satisfied its obligations with respect to title to the Property. The provisions
of this Section shall survive the Closing. Nothing herein is intended to limit
Buyer's right to approve title matters in its sole discretion during the
Contingency Period pursuant to the provisions of Article II above.
SECTION 4.2 EVIDENCE OF TITLE.
Delivery of title in accordance with the foregoing shall be evidenced
by the willingness of the Title Company to issue, at Closing, its Owner's ALTA
Policies of Title Insurance (for the properties located in Arizona and
Colorado) and a standard form owner policy of title insurance (for the
properties located in Texas and New Mexico), in the amount of the Purchase
Price showing title to the Real Property vested in Buyer, subject to the
Conditions of Title (the "Title Policy"). Buyer shall have prepared, at Buyer's
cost, the ALTA surveys of the Property necessary to support the issuance of the
Title Policy. Buyer shall provide Seller with copies of such surveys at no cost
to Seller.
ARTICLE V
RISK OF LOSS AND INSURANCE PROCEEDS
SECTION 5.1 MINOR LOSS.
Buyer shall be bound to purchase the Property for the full Purchase
Price as required by the terms hereof, without regard to the occurrence or
effect of any damage to the Property or destruction of any improvements thereon
or condemnation of any portion of the Property, provided that: (a) the cost to
repair any such damage or destruction, or the diminution in the value of the
remaining Property as a result of a partial condemnation, does not exceed Four
Hundred Thirty-Five Thousand Dollars ($435,000) and (b) upon the Closing, there
shall be a credit against the Purchase Price due hereunder equal to the amount
of any insurance proceeds or condemnation awards collected by Seller as a
result of any such damage or destruction or condemnation, plus the amount of
any insurance deductible, less any sums expended by Seller toward the
restoration or repair of the Property. If the proceeds or awards have not been
collected as of the Closing, then the amount of such proceeds or awards shall
be a credit against the Purchase Price, subject to the amount needed to
reimburse Seller for sums expended to repair or restore the Property, and
Seller shall retain the rights to such proceeds and awards.
SECTION 5.2 MAJOR LOSS.
If the amount of the damage or destruction or condemnation as
specified above exceeds Four Hundred Thirty-Five Thousand Dollars ($435,000),
then Buyer may, at its option to be exercised within ten (10) days of Seller's
notice of the occurrence of the damage or destruction or the commencement of
condemnation proceedings, either terminate this Agreement or
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consummate the purchase for the full Purchase Price as required by the terms
hereof. If Buyer elects to terminate this Agreement or fails to give Seller
notice within such 10-day period that Buyer will proceed with the purchase, then
the Deposit shall be returned to Buyer and neither party shall have any further
rights or obligations hereunder except as provided in Sections 6.1, 9.3 and 9.9
below. If Buyer elects to proceed with the purchase, then upon the Closing,
there shall be a credit against the Purchase Price due hereunder equal to the
amount of any insurance proceeds or condemnation awards collected by Seller as a
result of any such damage or destruction or condemnation, plus the amount of any
insurance deductible, less any sums expended by Seller toward the restoration or
repair of the Property. If the proceeds or awards have not been collected as of
the Closing, then the amount of such proceeds or awards shall be a credit
against the Purchase Price, subject to the amount needed to reimburse Seller for
sums expended to repair or restore the Property, and Seller shall retain the
rights to such proceeds and awards.
ARTICLE VI
BROKERS AND EXPENSES
SECTION 6.1 BROKERS.
The parties represent and warrant to each other that no broker or
finder was instrumental in arranging or bringing about this transaction except
for CB Commercial Real Estate ("Seller's Broker"). There are no claims or
rights for brokerage commissions or finder's fees in connection with the
transactions contemplated by this Agreement, except for the commission due, if
any, to Seller's Broker, which shall be paid at Closing pursuant to a separate
agreement between Seller and Seller's Broker. If any other person brings a
claim for a commission or finder's fee based upon any contact, dealings or
communication with Buyer or Seller, then the party through whom such person
makes his claim shall defend the other party (the "Indemnified Party") from
such claim, and shall indemnify the Indemnified Party and hold the Indemnified
Party harmless from any and all costs, damages, claims, liabilities or expenses
(including without limitation, reasonable attorneys' fees and disbursements)
incurred by the Indemnified Party in defending against the claim. The
provisions of this Section 6.1 shall survive the Closing or, if the purchase
and sale is not consummated, any termination of this Agreement.
SECTION 6.2 EXPENSES.
Except as provided in Sections 4.2 above and 8.5 below, each party
hereto shall pay its own expenses incurred in connection with this Agreement
and the transactions contemplated hereby.
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ARTICLE VII
LEASES AND OTHER AGREEMENTS
SECTION 7.1 BUYER'S APPROVAL OF NEW LEASES AND AGREEMENTS
AFFECTING THE PROPERTY.
Between the date hereof and the Closing, Seller shall not enter into
any new lease or other agreement affecting the Property, or modify or terminate
any existing lease or other agreement affecting the Property, without first
obtaining Buyer's written approval, which, during the Contingency Period, will
not be unreasonably withheld or delayed. Buyer shall have sole discretion after
the Contingency Period to approve or disapprove any such proposed action.
Notwithstanding the foregoing, if Buyer fails to give Seller notice of its
approval or disapproval of any such proposed action within three (3) business
days after Seller notifies Buyer in writing of Seller's desire to take such
action and provides to Buyer an economic term sheet for the lease, reasonable
financial information on the tenant and other information reasonably requested
by Buyer, then Buyer shall be deemed to have given its approval. Buyer agrees
that Buyer has approved the proposed leases and lease terms more particularly
described in SCHEDULE 3 attached hereto and made a part hereof.
SECTION 7.2 TENANT IMPROVEMENT COSTS AND LEASING COMMISSIONS.
With respect to any new lease or lease modification entered into by
Seller before the Closing Date and not shown on the original list of leases
presented to Buyer and attached hereto as SCHEDULE 4 and made a part hereof or
lease renewal or lease extension that is approved by Buyer or deemed approved
by Buyer, if Seller performs or pays or contracts for any tenant improvement
work or pays or contracts for any leasing commissions before the Closing, then
such expenses shall be reimbursed by Buyer to Seller at Closing, and Buyer
shall, at Closing, assume any and all remaining obligations with respect to
such tenant improvements and leasing commissions pursuant to the Assignment of
Leases as defined below. Buyer shall reimburse Seller for Seller's out of
pocket legal costs incurred to negotiate any new lease or lease modification,
or any lease renewal or extension occurring after the date on SCHEDULE 4. On
and after the Closing, Seller shall have no further obligations with respect to
any leases or other agreements affecting the Property, including, without
limitation, tenant improvement work and leasing commissions. Notwithstanding
the foregoing, Buyer and Seller acknowledge that at Closing, Buyer shall
receive a credit of (i) Ninety-Six Thousand Sixty-Three Dollars and
Thirty-Three cents ($96,063.33) for Sun Strand's unused tenant improvement
allowance and the cost of the transformer, (ii) One Hundred Forty-Four Thousand
Dollars ($144,000) for CIGNA's lease non-renewal fee, and (iii) One Hundred
Fifty Thousand Dollars ($150,000) for the roof located at Tucson Tech Center.
The provisions of this Section shall survive the Closing.
SECTION 7.3 TENANT NOTICES.
At the Closing, Seller shall furnish Buyer with a signed notice to be
given to each tenant of the Property. The notice shall disclose that the
Property has been sold to Buyer, that, after the Closing, all rents should be
paid to Buyer and that Buyer shall be responsible for all the tenant's
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security deposit, provided that Buyer is given credit at Closing for such
security deposit. The form of the notice shall be otherwise reasonably
acceptable to the parties.
SECTION 7.4 OPERATION OF PROPERTY.
From the date hereof, Seller shall maintain and operate the Property
in the ordinary course of business; provided, however, that Seller shall not be
obligated to make capital expenditures except as may be necessary to maintain
the Property in the same condition it was in at the expiration of the
Contingency Period, subject to normal wear and tear and loss by casualty.
ARTICLE VIII
CLOSING AND ESCROW
SECTION 8.1 ESCROW INSTRUCTIONS.
Upon execution of this Agreement, the parties hereto shall deposit an
executed counterpart of this Agreement with the Title Company, and this
instrument shall serve as the instructions to the Title Company as the escrow
holder for consummation of the purchase and sale contemplated hereby. Seller
and Buyer agree to execute such reasonable additional and supplementary escrow
instructions as may be appropriate to enable the Title Company to comply with
the terms of this Agreement; provided, however, that in the event of any
conflict between the provisions of this Agreement and any supplementary escrow
instructions, the terms of this Agreement shall control.
SECTION 8.2 CLOSING.
The Closing hereunder shall be held and delivery of all items to be
made at the Closing under the terms of this Agreement shall be made at the
offices of the Title Company on May 6, 1998, and before 5:00 p.m. local time,
or such other earlier date and time as Buyer and Seller may mutually agree upon
in writing (the "Closing Date"). Upon ten (10) days' written notice to Buyer,
Seller shall have the right to extend the Closing Date by a period of up to
forty-five (45) days. The Closing Date and time may not otherwise be extended
without the prior written approval of both Seller and Buyer.
SECTION 8.3 DEPOSIT OF DOCUMENTS.
(a) At or before the Closing, Seller shall deposit into escrow
the following items with respect to the Property:
(1) THE DULY EXECUTED AND ACKNOWLEDGED DEEDS IN THE FORM
ATTACHED HERETO AS EXHIBIT D CONVEYING THE REAL PROPERTY TO BUYER SUBJECT TO
THE CONDITIONS OF TITLE;
(2) FOUR (4) DULY EXECUTED COUNTERPARTS OF THE BILL OF SALE
IN THE FORM ATTACHED HERETO AS EXHIBIT E (THE "BILL OF SALE");
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(3) FOUR (4) DULY EXECUTED COUNTERPARTS OF AN ASSIGNMENT
AND ASSUMPTION OF LEASES, SERVICE CONTRACTS AND WARRANTIES IN THE FORM ATTACHED
HERETO AS EXHIBIT F (THE "ASSIGNMENT OF LEASES");
(4) AN AFFIDAVIT PURSUANT TO SECTION 1445(B)(2) OF THE
FEDERAL CODE, AND ON WHICH BUYER IS ENTITLED TO RELY, THAT SELLER IS NOT A
"FOREIGN PERSON" WITHIN THE MEANING OF SECTION 1445(F)(3) OF THE FEDERAL CODE;
(5) AN AFFIDAVIT OF PROPERTY VALUE FOR THE PROPERTIES
LOCATED IN ARIZONA;
(6) A STATUTORY NOTICE TO PURCHASERS OF REAL PROPERTY FOR
THE PROPERTY LOCATED IN TEXAS;
(7)AN ASSIGNMENT AND ASSUMPTION OF DECLARANT OBLIGATIONS
FOR THE PROPERTY LOCATED IN NEW MEXICO IN THE FORM ATTACHED HERETO AS EXHIBIT
H;
(8) A REAL PROPERTY TRANSFER DECLARATION FOR THE PROPERTIES
LOCATED IN COLORADO;
(9) A DR-1083 FOR THE PROPERTIES LOCATED IN COLORADO; AND
(10) AN ASSIGNMENT AND ASSUMPTION OF DECLARANT OBLIGATION
FOR THE PROPERTY LOCATED IN TEXAS IN THE FORM ATTACHED HERETO AS EXHIBIT I.
(b) At or before Closing, Buyer shall deposit into escrow the
following items:
(1) FUNDS NECESSARY TO CLOSE THIS TRANSACTION;
(2) FOUR (4) DULY EXECUTED COUNTERPARTS OF THE BILL OF
SALE; AND
(3) FOUR (4) DULY EXECUTED COUNTERPARTS OF THE ASSIGNMENT
OF LEASES;
(4) AN AFFIDAVIT OF PROPERTY VALUE FOR THE PROPERTIES
LOCATED IN ARIZONA;
(5) A STATUTORY NOTICE TO PURCHASERS OF REAL PROPERTY FOR
THE PROPERTY LOCATED IN TEXAS;
(6)AN ASSIGNMENT AND ASSUMPTION OF DECLARANT OBLIGATIONS
FOR THE PROPERTY LOCATED IN NEW MEXICO IN THE FORM ATTACHED HERETO AS EXHIBIT
H; AND
(7)AN ASSIGNMENT AND ASSUMPTION OF DECLARANT OBLIGATION FOR
THE PROPERTY LOCATED IN TEXAS IN THE FORM ATTACHED HERETO AS EXHIBIT I.
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(c) Buyer and Seller shall each deposit such other instruments
as are reasonably required by the Title Company or otherwise required to close
the escrow and consummate the purchase and sale of the Property in accordance
with the terms hereof, including, without limitation, an agreement (the
"Designation Agreement") designating Title Company as the "Reporting Person"
for the transaction pursuant to Section 6045(e) of the Federal Code and the
regulations promulgated thereunder, and executed by Seller, Buyer and Title
Company. The Designation Agreement shall be in a form reasonably acceptable to
the parties, and, in any event, shall comply with the requirements of Section
6045(e) of the Federal Code and the regulations promulgated thereunder.
(d) Seller shall deliver to Buyer originals of the leases,
copies of the tenant correspondence files (for the three (3) most recent years
of Seller's ownership of the Property only), and originals of any other items
which Seller was required to furnish Buyer copies of or make available at the
Property pursuant to Section 2.1(e) above except for Seller's general ledger
and other internal books or records, within two (2) business days after the
Closing Date. If requested by Buyer, Seller shall provide Buyer with reasonable
access to Seller's original tenant correspondence files after Closing. Seller
shall deliver to Buyer a set of keys to the Property on the Closing Date.
SECTION 8.4 ESTOPPEL CERTIFICATES.
(a) If in accordance with Article II of this Agreement Buyer
elects to proceed with the purchase of the Property, then Seller shall use its
reasonable efforts to obtain recertifications of estoppel certificates from
each tenant of the Property in the form attached hereto as EXHIBIT G or in
another form approved by Buyer. It shall be a condition to Buyer's obligation
to close the sale and purchase of the Property that on or before the Closing,
Buyer is able to obtain a recertification of an estoppel certificate in the
form described above from all of the tenants listed on Schedule 7 attached
hereto and from tenants of the Property covering at least ninety percent (90%)
of the rentable/revenue producing square footage of the Property (which tenants
shall include those listed on Schedule 7).
(b) If the condition contained in Section 8.4(a) above is not
satisfied, then Buyer may, by written notice given to Seller before the
Closing, elect to terminate this Agreement and receive a refund of the Deposit
or waive said condition. If Buyer so elects to terminate this Agreement,
neither party shall have any further rights or obligations hereunder except as
provided in Section 6.1 above and Sections 9.3 and 9.9 below.
SECTION 8.5 PRORATIONS.
(a) Rents, including, without limitation, percentage rents, if
any, and any additional charges and expenses payable under tenant leases, all
as and when actually collected (whether such collection occurs prior to, on or
after the Closing Date); real property taxes and assessments; water, sewer and
utility charges; amounts payable under any service contracts; annual permits
and/or inspection fees (calculated on the basis of the period covered); and any
other expenses of the operation and maintenance of the Property (including,
without limitation, expenses already paid by Seller but which are being
amortized over time by Seller and with respect to which Seller shall receive a
credit at Closing in the amount of the unamortized portion
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thereof), shall all be prorated as of 12:01 a.m. on the date the Deeds are
recorded on the basis of a 365-day year. Seller shall receive a credit at
Closing for the tenant improvements and leasing commissions described in
Section 7.2. Any sums collected by Buyer from tenants after the Closing shall
be promptly paid to current rents and then to Seller to the extent of any
remaining rents and other sums which were delinquent at Closing. Buyer shall
use reasonable efforts to collect such delinquent rents but shall have no
obligation to commence a legal proceeding to collect such sums. If Buyer has
not been able to collect any delinquent rents within ninety (90) days after the
Closing, Seller may bring legal actions to collect such rents, provided Seller
shall have no right to terminate any tenant's lease. The amount of any security
deposits under tenant leases shall be credited against the Purchase Price.
Seller shall receive credits at Closing for the amount of any utility or other
deposits with respect to the Property. Seller shall use reasonable efforts to
obtain a utility reading immediately prior to the Closing Date. Buyer shall
cause all utilities to be transferred into Buyer's name and account at the time
of Closing. Seller and Buyer hereby agree that if any of the aforesaid
prorations and credits cannot be calculated accurately on the Closing Date,
then the same shall be calculated as soon as reasonably practicable after the
Closing Date and either party owing the other party a sum of money based on
such subsequent proration(s) or credits shall promptly pay said sum to the
other party.
(b) For the properties located in Arizona, Seller shall pay for
the premium for a standard coverage title policy. Buyer shall pay for (i) the
additional premium for extended coverage and (ii) the cost of all endorsements.
The escrow fees and recording costs shall be equally borne by both Buyer and
Seller.
For the property located in New Mexico, Seller shall pay
for the title insurance policy. Buyer shall pay for (i) the cost of all
endorsements and the costs of deleting the standard preprinted exceptions, (ii)
all recording costs and (iii) the environmental audit and any other
inspections. The escrow fees shall be equally borne by both Buyer and Seller.
For the property located in Texas, Seller shall pay for (i)
the title insurance premium, and (ii) the cost of recording the deed. Buyer
shall pay for the cost of all endorsements. The escrow fees shall be equally
borne by both Buyer and Seller.
For the properties located in Colorado, Buyer shall pay for
(i) all recording costs, (ii) the documentary fees and (iii) the costs of all
endorsements and extended title coverage. Seller shall pay for the premium for
basic title coverage. The escrow fees shall be equally borne by both Buyer and
Seller.
All other costs associated with the closing of the
transaction contemplated herein shall be paid in accordance with the local
custom of the county in which the Property is located.
(c) The provisions of this Section 8.5 shall survive the
Closing.
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ARTICLE IX
MISCELLANEOUS
SECTION 9.1 NOTICES.
Any notices required or permitted to be given hereunder shall be given
in writing and shall be delivered (a) in person, (b) by certified mail, postage
prepaid, return receipt requested, (c) by Facsimile with confirmation of
receipt, or (d) by a commercial overnight courier that guarantees next day
delivery and provides a receipt, and such notices shall be addressed as
follows:
To Buyer: American Industrial Properties REIT
6210 North Beltline, Suite 170
Irving, TX 75063-2656
Attention: Mr. Lew Friedland
Fax No.: (972) 756-0704
Phone No.: (972) 756-6000
with a copy to: Liddell, Sapp, Zivley, Hill & LaBoon, L.L.P.
2001 Ross Avenue, Suite 3000
Dallas, TX 25201-8001
Att'n: Brad B. Hawley, Esq.
Fax No.: (214) 849-5599
To Seller : Spieker Properties
2180 Sand Hill Road, Suite 200
Menlo Park, CA 94025
Att'n: Dennis E. Singleton
Fax No.: (650) 854-6594
with copies to: Spieker Properties
2180 Sand Hill Road, Suite 200
Menlo Park, CA 94025
Att'n: Sara Reynolds
Fax No.: (650) 854-6594
Spieker Properties
590 LaPlace Court, Suite 100
Carlsbad, CA 92008
Att'n: Fred Reed
Fax No.: (760) 931-1761
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and a copy to: Orrick, Herrington & Sutcliffe LLP
400 Sansome Street
San Francisco, California 94111
Att'n: Michael H. Liever, Esq.
Fax No.: (415) 773-4285
or to such other address as either party may from time to time specify in
writing to the other party. Any notice shall be effective only upon delivery.
SECTION 9.2 ENTIRE AGREEMENT.
This Agreement, together with the Exhibits hereto, contains all
representations, warranties and covenants made by Buyer and Seller and
constitutes the entire understanding between the parties hereto with respect to
the subject matter hereof. Any prior correspondence, memoranda or agreements
are replaced in total by this Agreement together with the Exhibits hereto.
SECTION 9.3 ENTRY AND INDEMNITY.
In connection with any entry by Buyer, or its agents, employees or
contractors onto the Property, Buyer shall give Seller reasonable advance
notice of such entry and shall conduct such entry and any inspections in
connection therewith so as to minimize, to the greatest extent possible,
interference with Seller's business and the business of Seller's tenants and
otherwise in a manner reasonably acceptable to Seller. Without limiting the
foregoing, prior to any entry to perform any on-site testing, Buyer shall give
Seller written notice thereof, including the identity of the company or persons
who will perform such testing and the proposed scope of the testing. Seller
shall approve or disapprove, in Seller's sole discretion, the proposed testing
within three (3) business days after receipt of such notice. If Seller fails to
respond within such three (3) business day period, Seller shall be deemed to
have disapproved the proposed testing. If Buyer or its agents, employees or
contractors take any sample from the Property in connection with any such
approved testing, Buyer shall provide to Seller a portion of such sample being
tested to allow Seller, if it so chooses, to perform its own testing. Seller or
its representative may be present to observe any testing or other inspection
performed on the Property. Upon the request of Seller, Buyer shall promptly
deliver to Seller copies of any reports relating to any testing or other
inspection of the Property performed by Buyer or its agents, employees or
contractors. Buyer shall not contact any governmental authority without first
obtaining the prior written consent of Seller thereto, and Seller, at Seller's
election, shall be entitled to have a representative on any phone or other
contact made by Buyer to a governmental authority and present at any meeting by
Buyer with a governmental authority. Buyer shall maintain, and shall assure
that its contractors maintain, public liability and property damage insurance
in amounts and in form and substance adequate to insure against all liability
of Buyer and its agents, employees or contractors, arising out of any entry or
inspections of the Property pursuant to the provisions hereof, and Buyer shall
provide Seller with evidence of such insurance coverage upon request by Seller.
Buyer shall indemnify and hold Seller harmless from and against any costs,
damages, liabilities, losses, expenses, liens or claims (including, without
limitation, reasonable attorney's fees) arising out of or relating to any entry
on the Property by Buyer, its agents, employees or contractors in the course of
performing the inspections, testings or inquiries
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provided for in this Agreement. The foregoing indemnity shall survive beyond
the Closing, or, if the sale is not consummated, beyond the termination of this
Agreement.
SECTION 9.4 TIME.
Time is of the essence in the performance of each of the parties'
respective obligations contained herein.
SECTION 9.5 ATTORNEYS' FEES.
If either party hereto fails to perform any of its obligations under
this Agreement or if any dispute arises between the parties hereto concerning
the meaning or interpretation of any provision of this Agreement, then the
defaulting party or the party not prevailing in such dispute, as the case may
be, shall pay any and all costs and expenses incurred by the other party on
account of such default and/or in enforcing or establishing its rights
hereunder, including, without limitation, court costs and reasonable attorneys'
fees and disbursements.
SECTION 9.6 ASSIGNMENT.
Buyer's rights and obligations hereunder shall not be assignable
without the prior written consent of Seller. Buyer shall in no event be
released from any of its obligations or liabilities hereunder in connection
with any assignment. In connection with any assignment pursuant to the terms
hereof, the assignee shall assume all of the rights and obligations of Buyer
hereunder pursuant to a document acceptable to Seller and delivered to Seller
prior to the assignment. Subject to that limitation, this Agreement shall inure
to the benefit of and be binding upon the parties hereto and their respective
successors and assigns.
SECTION 9.7 COUNTERPARTS.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which taken together shall
constitute one and the same instrument.
SECTION 9.8 GOVERNING LAW.
This Agreement shall be governed by and construed in accordance with
the laws of the State in which the relevant portion of the Property is located.
SECTION 9.9 CONFIDENTIALITY AND RETURN OF DOCUMENTS.
Buyer and Seller shall each maintain as confidential any and all
material obtained about the other or, in the case of Buyer, about the Property,
this Agreement or the transactions contemplated hereby, and shall not disclose
such information to any third party except if required by law. This provision
shall survive the Closing or any termination of this Agreement.
SECTION 9.10 INTERPRETATION OF AGREEMENT.
The article, section and other headings of this Agreement are for
convenience of reference only and shall not be construed to affect the meaning
of any provision contained
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herein. Where the context so requires, the use of the singular shall include
the plural and vice versa and the use of the masculine shall include the
feminine and the neuter. The term "person" shall include any individual,
partnership, joint venture, corporation, trust, unincorporated association, any
other entity and any government or any department or agency thereof, whether
acting in an individual, fiduciary or other capacity.
SECTION 9.11 LIMITED LIABILITY.
The obligations of Seller are intended to be binding only on the
property of Seller and shall not be personally binding upon, nor shall any
resort be had to, the private properties of any of its trustees, officers,
beneficiaries, directors, members, or shareholders, the general partners,
officers, directors, members, or shareholders thereof, or any employees or
agents of Seller.
SECTION 9.12 AMENDMENTS.
This Agreement may be amended or modified only by a written instrument
signed by Buyer and Seller.
SECTION 9.13 NO RECORDING.
Neither this Agreement or any memorandum or short form thereof may be
recorded by Buyer.
SECTION 9.14 DRAFTS NOT AN OFFER TO ENTER INTO A LEGALLY BINDING
CONTRACT.
The parties hereto agree that the submission of a draft of this
Agreement by one party to another is not intended by either party to be an
offer to enter into a legally binding contract with respect to the purchase and
sale of the Property. The parties shall be legally bound with respect to the
purchase and sale of the Property pursuant to the terms of this Agreement only
if and when the parties have been able to negotiate all of the terms and
provisions of this Agreement in a manner acceptable to each of the parties in
their respective sole discretion, including, without limitation, all of the
Exhibits and Schedules hereto, and both Seller and Buyer have fully executed
and delivered to each other a counterpart of this Agreement, including, without
limitation, all Exhibits and Schedules hereto.
SECTION 9.15 NO PARTNERSHIP.
The relationship of the parties hereto is solely that of Seller and
Buyer with respect to the Property and no joint venture or other partnership
exists between the parties hereto. Neither party has any fiduciary relationship
hereunder to the other.
SECTION 9.16 NO THIRD PARTY BENEFICIARY.
The provisions of this Agreement are not intended to benefit any third
parties.
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SECTION 9.17 LIMITATION ON LIABILITY.
Notwithstanding anything to the contrary contained herein, after the
Closing the maximum aggregate liability of Seller, and the maximum aggregate
amount which may be awarded to and collected by Buyer, under this Agreement
(including, without limitation, for any breach of representation and warranty
contained herein) and any and all documents executed pursuant hereto or in
connection herewith (collectively the "Other Documents") including, without
limitation, the Deeds, the Bills of Sale and the Assignments of Leases, shall
under no circumstances whatsoever exceed Two Percent (2%) of the Purchase
Price.
SECTION 9.18 BUYER'S ACKNOWLEDGMENT OF SATISFACTION OF CONDITIONS.
Notwithstanding anything to the contrary contained herein including,
without limitation, the provisions of Article II and Section 4.1, Buyer
acknowledges and agrees that it has reviewed and approved all of the Due
Diligence Materials, conditions and other items and matters described or
referred to in Section 2.1(a) through (g) and the title matters described in
Section 4.1, and that the conditions contained in Sections 2.1(a) through (g)
and Section 4.1 have been satisfied.
SECTION 9.19 LIMITATION ON INDEMNIFICATION.
To the extent, if at all, that N.M. Stat. Ann. Section 56-7-1 is
applicable to this Agreement, or any related documents, any agreement to
indemnify any indemnitee in this Agreement or any related documents, will not
extend to liability, claims, damages, losses or expenses, including fees of
lawyers, arising out of (i) the preparation or approval of maps, drawings,
opinions, reports, surveys, change orders, designs or specifications by an
indemnitee or the agents or employees of the indemnitee or (ii) the giving of
or the failure to give directions or instructions by the indemnitee, or the
agents or employees of the indemnitee, where such giving or failure to give
directions or instructions is the primary cause of bodily injury to persons or
damage to the property.
SECTION 9.20 SPECIAL PROVISIONS REGARDING PROPERTIES LOCATED IN
THE STATE OF COLORADO.
Special taxing districts may be subject to general obligation
indebtedness that is paid by revenues produced from annual tax levies on the
taxable property within such districts. Property owners in such districts may
be placed at risk for increased mill levies and excessive tax burdens to
support the servicing of such debt where circumstances arise resulting in the
inability of such a district to discharge such indebtedness without such an
increase in mill levies. Buyer should investigate the debt financing
requirements of the authorized general obligation indebtedness of such
districts, existing mill levies of such district servicing such indebtedness,
and the potential for an increase in such mill levies.
SECTION 9.21 MANAGER LETTERS.
Buyer will have its accountants audit the operating statements and
books and records with respect to each of the real properties constituting the
Property. Buyer has requested that each manager of each such real property (a
"Manager") give the Buyer a certification letter (the
22
23
"Certification Letter") with respect to such operating statements and books and
records. Seller is willing to allow each such Manager to provide such a
Certification Letter only upon the terms and conditions set forth in this
Section. Buyer hereby expressly acknowledges and agrees that Manager in giving
the Certification Letter is doing so only on its own behalf and not on behalf
of or as agent of Spieker. Buyer hereby agrees to, and shall, indemnify and
hold Seller and the Seller Related Parties harmless from and against any and
all claims, losses, liabilities, damages, causes of action, costs and expenses,
including, without limitation, attorney's fees and costs, of whatever nature,
arising out of or in connection with the Certification Letters and the reliance
thereon by Buyer or any other party. Each Manager must confirm to Spieker in a
letter acceptable to Spieker that it is giving the Certification Letter on its
own behalf and not on behalf of or as agent of Seller and that the Manager will
not look to Spieker for indemnification, compensation or any other obligations
with respect to any Certification Letter.
SECTION 9.22 LETTER OF CREDIT.
At or before Closing, Seller shall deliver into escrow (i) the
original Bank of America Irrevocable Standby Letter of Credit No. C7340430, as
amended (the "Dell LC"); (ii) a copy of the Letter to Bank of America dated
April 29, 1998 and executed by Michael Watt, Chief Operating Officer of Dell
Financial Services and any supplements thereto (the "Dell Letter"); and (iii) a
copy of the Letter to Bank of America dated April 30, 1998 and executed by Sara
H. Reynolds, Vice President and General Counsel of Seller (the "Spieker
Letter").
SECTION 9.23 METWEST, INC.'S LEASE.
Spieker Properties, L.P., a California limited partnership shall
execute a Guaranty for the benefit of Buyer in the form attached hereto as
Exhibit J and made a part hereof.
SECTION 9.24 SURVIVAL.
(a) Except as expressly set forth to the contrary herein, no
representations, warranties, covenants or agreements of the parties contained
herein shall survive the Closing.
(b) The provisions of this Article IX shall survive Closing.
23
24
The parties hereto have executed this Agreement as of the respective
dates written below.
SELLER: SPIEKER NORTHWEST INC.,
a California corporation
By: /s/ CRAIG G. VOUGHT
-------------------------------------
Craig G. Vought
Its: Vice President
------------------------------------
BUYER: AMERICAN INDUSTRIAL PROPERTIES REIT
a Texas Real Estate Investment Trust
By: /s/ [ILLEGIBLE]
-------------------------------------
Its: V.P.
------------------------------------
24
25
LIST OF EXHIBITS AND SCHEDULES
EXHIBITS
Exhibit A Real Property Description Exhibit A-1 through Exhibit A-6
Exhibit B Allocation of Purchase Price
Exhibit C List of Tenant Leases
Exhibit D Special Warranty Deed
Exhibit E Bill of Sale
Exhibit F Assignment of Leases, Service Contracts and Warranties
Exhibit G Tenant Estoppel Certificate
Exhibit H Assignment and Assumption of Declarant Obligations
Exhibit I Assignment and Assumption of Declarant Obligations
Exhibit J Guaranty
SCHEDULES
Schedule 1 Personal Property List
Schedule 2 Disclosure Items
Schedule 3 Preapproved Leases
Schedule 4 List of Original Leases
Schedule 5 List of Service Contracts
Schedule 6 Pending or Threatened Litigation
Schedule 7 List of Major Tenants
25
26
EXHIBIT A-1
SUMMIT PARK AND LAND
AUSTIN, TEXAS
[SEE ATTACHED]
A-1
27
EXHIBIT A-2
BROADBENT BUSINESS PARK AND LAND
ALBUQUERQUE, NEW MEXICO
[SEE ATTACHED]
A-2
28
EXHIBIT A-3
ACADEMY POINT ATRIUM II
COLORADO SPRINGS, COLORADO
[SEE ATTACHED]
A-3
29
EXHIBIT A-4
AERO TECH R&D
COLORADO SPRINGS, COLORADO
[SEE ATTACHED]
A-4
30
EXHIBIT A-5
BLACK CANYON TECH CENTER
PHOENIX, ARIZONA
[SEE ATTACHED]
A-5
31
EXHIBIT A-6
TUCSON TECH CENTER
TUCSON, ARIZONA
[SEE ATTACHED]
A-6
32
EXHIBIT B
ALLOCATION OF PURCHASE PRICE
PROPERTY PURCHASE PRICE
-------- --------------
Tucson Tech Center, Arizona $4,300,000
Black Canyon Tech, Arizona $7,850,000
Aero Tech R & D, Colorado $6,600,000
Academy Pointe Atrium II, Colorado $8,650,000
Broadbent Business Park, New Mexico $5,400,000
Summit Park, Texas $8,200,000
Summit Land and Broadbent Land $2,500,000
B-1
33
EXHIBIT C
LIST OF TENANT LEASES
BY PROPERTY
C-1
34
EXHIBIT D
SPECIAL WARRANTY DEED
[See Attached]
D-1
35
EXHIBIT A
[Legal Description]
[See Attached]
36
EXHIBIT B
(a) Interests of tenants in possession pursuant to the terms of their leases;
(b) Non-delinquent liens for real estate taxes and assessments
(c) Exceptions disclosed by the preliminary title reports and commitments and
amendments thereto received by Grantee, and any other exceptions to title
which would be disclosed by an inspection of the Property and/or matters
shown on the surveys of the Property [we will specify the matters].
37
CUT AND PASTE GLOBAL ACKNOWLEDGMENT FORM
INSERT
38
EXHIBIT E
BILL OF SALE
----------------------------------------
This Bill of Sale (the "Bill of Sale") is made and entered into ,
199__, by and between Spieker Northwest, Inc., a California corporation
("Assignor"), and AMERICAN INDUSTRIAL PROPERTIES REIT, a Texas Real Estate
Investment Trust ("Assignee").
In consideration of the sum of Ten Dollars ($10) and other good and
valuable consideration paid by Assignee to Assignor, the receipt and
sufficiency of which are hereby acknowledged by Assignor, Assignor does hereby
assign, transfer, convey and deliver to Assignee, its successors and assigns,
free and clear of any liens or encumbrances created by, through or under
Assignor except as set forth in Exhibit C, all items of tangible personal
property, if any, which are owned by Assignor and situated upon and used
exclusively in connection with the land described on the attached Exhibit A
(the "Land") and the improvements located thereon (the "Improvements"), and
which are described on the attached Exhibit B, but specifically excluding any
and all personal property owned by tenants or otherwise considered the property
of tenants under any leases affecting the Land or Improvements (the " Personal
Property").
This Bill of Sale is made subject, subordinate and inferior to the
easements, covenants and other matters and exceptions set forth on Exhibit C,
attached hereto and made a part hereof for all purposes.
ASSIGNEEACKNOWLEDGES AND AGREES THAT, EXCEPT AS EXPRESSLY PROVIDED IN
THAT CERTAIN AGREEMENT OF PURCHASE AND SALE DATED ___________, 1998, BY AND
BETWEEN ASSIGNOR AND ASSIGNEE (THE "AGREEMENT"), ASSIGNOR HAS NOT MADE, DOES
NOT MAKE AND SPECIFICALLY DISCLAIMS ANY REPRESENTATIONS, WARRANTIES, PROMISES,
COVENANTS, AGREEMENTS OR GUARANTIES OF ANY KIND OR CHARACTER WHATSOEVER,
WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN, PAST, PRESENT OR FUTURE, OF, AS
TO, CONCERNING OR WITH RESPECT TO (A) THE NATURE, QUALITY OR CONDITIONS OF THE
PERSONAL PROPERTY, (B) THE INCOME TO BE DERIVED FROM THE PERSONAL PROPERTY, (C)
THE SUITABILITY OF THE PERSONAL PROPERTY FOR ANY AND ALL ACTIVITIES AND USES
WHICH ASSIGNEE MAY CONDUCT THEREON, (D) THE COMPLIANCE OF OR BY THE PERSONAL
PROPERTY OR ITS OPERATION WITH ANY LAWS, RULES, ORDINANCES OR REGULATIONS OF
ANY APPLICABLE GOVERNMENTAL AUTHORITY OR BODY, (E) THE HABITABILITY,
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF THE PERSONAL PROPERTY,
OR (F) ANY OTHER MATTER WITH RESPECT TO THE PERSONAL PROPERTY. ASSIGNEE FURTHER
ACKNOWLEDGES AND AGREES THAT, HAVING BEEN GIVEN THE OPPORTUNITY TO INSPECT THE
PERSONAL PROPERTY, ASSIGNEE IS RELYING SOLELY ON ITS OWN INVESTIGATION OF THE
PERSONAL PROPERTY AND NOT ON ANY INFORMATION PROVIDED OR TO BE PROVIDED BY
ASSIGNOR, EXCEPT AS SPECIFICALLY PROVIDED IN THE AGREEMENT. ASSIGNEE FURTHER
ACKNOWLEDGES AND AGREES THAT ANY INFORMATION PROVIDED OR TO BE PROVIDED WITH
RESPECT TO THE PERSONAL PROPERTY WAS OBTAINED FROM A VARIETY OF SOURCES AND
THAT ASSIGNOR HAS NOT MADE ANY INDEPENDENT INVESTIGATION OR VERIFICATION OF
SUCH
E-1
39
INFORMATION. ASSIGNEE FURTHER ACKNOWLEDGES AND AGREES THAT THE SALE OF THE
PERSONAL PROPERTY AS PROVIDED FOR HEREIN IS MADE ON AN "AS IS, WHERE IS"
CONDITION AND BASIS "WITH ALL FAULTS," EXCEPT AS SPECIFICALLY PROVIDED IN THE
AGREEMENT.
The obligations of Assignor are intended to be binding only on the
property of Assignor and shall not be personally binding upon, nor shall any
resort be had to, the private properties of any of its trustees, officers,
beneficiaries, directors, members, or shareholders, or of its general partners,
officers, directors, members, or shareholders thereof, or any employees or
agents of Assignor.
IN WITNESS WHEREOF, Assignor and Assignee have caused this Bill of
Sale to be executed on the date and year first above written.
ASSIGNOR: SPIEKER NORTHWEST INC.,
a California corporation
By:
--------------------------------------
Its:
-------------------------------------
ASSIGNEE: AMERICAN INDUSTRIAL PROPERTIES REIT,
a Texas Real Estate Investment Trust
By:
--------------------------------------
Its:
-------------------------------------
E-2
40
EXHIBIT A
[LEGAL DESCRIPTION]
E-A-1
41
EXHIBIT B
[PERSONAL PROPERTY
E-A-1
42
EXHIBIT C
(d) Interests of tenants in possession pursuant to the terms of their leases;
(e) Non-delinquent liens for real estate taxes and assessments
(f) Exceptions disclosed by the preliminary title reports and commitments and
amendments thereto received by Grantee, and any other exceptions to title
which would be disclosed by an inspection of the Property and/or matters
shown on the surveys of the Property [we will list such matters].
E-A-1
43
EXHIBIT F
ASSIGNMENT OF LEASES, SERVICE CONTRACTS
AND WARRANTIES
-------------------------------
This Assignment of Lease, Service Contracts and Warranties (this
"Assignment") is made and entered into , 199__, by and between SPIEKER
NORTHWEST, INC., a California corporation ("Assignor"), and AMERICAN INDUSTRIAL
PROPERTIES REIT, a Texas Real Estate Investment Trust ("Assignee").
For good and valuable consideration paid by Assignee to Assignor, the
receipt and sufficiency of which are hereby acknowledged by Assignor, Assignor
does hereby assign, transfer, set over and deliver unto Assignee all of
Assignor's right, title, and interest in (i) those certain leases (the
"Leases") listed on Exhibit A, attached hereto and made a part hereof for all
purposes except for Seller's right to collect delinquent rent and other
delinquent sums owing under such Leases for the period prior to the date
hereof, (ii) those certain service contracts, tenant improvement agreements and
leasing commission agreements (the "Contracts") listed on Exhibit B, if any,
attached hereto and made a part hereof for all purposes, and (iii) those
certain warranties held by Assignor (the "Warranties") listed on Exhibit C,
attached hereto and made a part hereof for all purposes.
This Assignment is made subject, subordinate and inferior to the
easements, covenants and other matters and exceptions set forth on Exhibit D,
attached hereto and made a part hereof for all purposes.
ASSIGNEE ACKNOWLEDGES AND AGREES, BY ITS ACCEPTANCE HEREOF, THAT,
EXCEPT AS EXPRESSLY PROVIDED IN THAT CERTAIN AGREEMENT OF PURCHASE AND SALE,
DATED AS OF _____________, 1998, BY AND BETWEEN ASSIGNOR AND ASSIGNEE (THE
"AGREEMENT"), THE LEASES, THE CONTRACTS AND THE WARRANTIES ARE CONVEYED "AS IS,
WHERE IS" AND IN THEIR PRESENT CONDITION WITH ALL FAULTS, AND THAT ASSIGNOR HAS
NOT MADE, DOES NOT MAKE AND SPECIFICALLY DISCLAIMS ANY REPRESENTATIONS,
WARRANTIES, PROMISES, COVENANTS, AGREEMENTS OR GUARANTIES OF ANY KIND OR
CHARACTER WHATSOEVER, WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN, PAST,
PRESENT OR FUTURE, OF, AS TO, CONCERNING OR WITH RESPECT TO THE NATURE, QUALITY
OR CONDITION OF THE LEASES, THE CONTRACTS OR THE WARRANTIES, THE INCOME TO BE
DERIVED THEREFROM, OR THE ENFORCEABILITY, MERCHANTABILITY OR FITNESS FOR ANY
PARTICULAR PURPOSE OF THE LEASES, THE CONTRACTS OR THE WARRANTIES.
Except as otherwise expressly provided in the Agreement, by accepting
this Assignment and by its execution hereof, Assignee assumes the payment and
performance of, and agrees to pay, perform and discharge, all the debts, duties
and obligations to be paid, performed or discharged from and after the date
hereof, by (a) the "landlord" or the "lessor" under the terms, covenants and
conditions of the Leases, including, without limitation, brokerage commissions
and compliance with the terms of the Leases relating to tenant improvements and
security
F-1
44
deposits, and (b) the owner under the Contracts and/or the Warranties. Assignee
agrees to indemnify, hold harmless and defend Assignor from and against any and
all claims, losses, liabilities, damages, costs and expenses (including,
without limitation, reasonable attorneys' fees) resulting by reason of the
failure of Assignee to pay, perform or discharge any of the debts, duties or
obligations assumed or agreed to by Assignee hereunder. Assignor agrees to
indemnify Assignee and hold harmless and defend Assignee from and against any
and all claims, damages, liabilities, losses, costs and expenses (including,
without limitation, reasonable attorneys' fees) resulting by reason of the
failure of Assignor to have paid, performed, or discharged any debts, duties or
obligations which Assignor was obligated to have paid, performed, or
discharged, and which accrued, during Assignor's ownership of the Property (as
such term is defined in the Agreement), by (a) the "landlord" or the "lessor"
under the terms, covenants and conditions of the Leases, or (b) the Owner under
the Contracts and/or Warranties, excluding with respect to clauses (a) and (b)
any such debts, duties or obligations arising out of or in any way related to
the physical condition of the Property.
The obligations of Assignor are intended to be binding only on the
property of Assignor and shall not be personally binding upon, nor shall any
resort be had to, the private properties of any of its trustees, officers,
beneficiaries, directors, members, or shareholders, or of its investment
manager, the general partners, officers, directors, members, or shareholders
thereof, or any employees or agents of Assignor or its investment manager.
All of the covenants, terms and conditions set forth herein shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns.
IN WITNESS WHEREOF, Assignor and Assignee have caused this Assignment
to be executed on the day and year first above written.
ASSIGNOR: SPIEKER NORTHWEST INC.,
a California corporation
By:
--------------------------------------
Its:
-------------------------------------
ASSIGNEE: AMERICAN INDUSTRIAL PROPERTIES REIT,
a Texas Real Estate Investment Trust
By:
--------------------------------------
Its:
-------------------------------------
F-2
45
EXHIBIT G
TENANT ESTOPPEL CERTIFICATE
(TENANT NAME)
Name
Address
Re: ____________
Dear _________:
You provided an estoppel certificate to Spieker Northwest, Inc.
("Spieker") in connection with its acquisition of the real property (the
"Property") of which you are a tenant. The estoppel certificate is attached
hereto and made a part hereof (the "Estoppel Certificate"). _______________
("Buyer") is in the process of negotiating with Spieker a purchase agreement
for the acquisition of the Property by Buyer. In the event Spieker and Buyer
are able to negotiate a purchase agreement, Buyer has requested that Spieker
obtain from you a recertification of your Estoppel Certificate.
We would appreciate it if you would sign the enclosed extra
counterpart of this letter and return it to
_________________________________________________________by Federal Express to
confirm that all of the information and statements contained in the Estoppel
Certificate are true and correct as of this date of the letter [EXCEPT - UPDATE
ANY INFORMATION NECESSARY] and that all rent and other sums payable under the
Lease have been paid through March 1998.
Thank you very much for your cooperation in this matter.
Very truly yours,
SPIEKER NORTHWEST, INC.,
a California corporation
By:
--------------------------------------
Its:
-------------------------------------
We agree that the information
and statements contained in the Estoppel
Certificate are true and correct as of
the date of this letter [EXCEPT-UPDATE
ANY INFORMATION OR STATEMENTS] and that
G-1
46
all rent and other sums payable
under our Lease have been paid through
March 1998. Spieker, Buyer and any
successors or assigns of Buyer who may
acquire an interest in or title to the
Property, and any lender or its
successors or assigns that may make a
loan with respect to the Property, may
rely on this letter in proceeding with
the acquisition of the Property or in
proceeding with making such a loan.
- ------------------------------
By:
--------------------------------------
Its:
-------------------------------------
Dated: March __, 1998
G-2
47
EXHIBIT H
ASSIGNMENT AND ASSUMPTION OF DECLARANT OBLIGATIONS
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
American Industrial Properties REIT
6210 North Beltline, Suite 170
Irving, Texas 75063-2656
Attention: Mr. Lew Friedland
- --------------------------------------------------------------------------------
(SPACE ABOVE THIS LINE FOR RECORDER'S USE)
ASSIGNMENT AND ASSUMPTION OF DECLARANT OBLIGATIONS
(Broadbent Business Park)
THIS ASSIGNMENT AND ASSUMPTION ("Assignment") dated as of April
__, 1998, is between SPIEKER NORTHWEST, INC., a California corporation
("Assignor"), and AMERICAN INDUSTRIAL PROPERTIES REIT, a Texas Real Estate
Investment Trust ("Assignee").
A. Assignor is the declarant under that certain Declaration of
Protective Covenants dated February 29, 1980 and recorded on March 14, 1980 in
the real estate records of Bernalillo County, New Mexico as Document No.
80-15957 at Book 759 at Pages 691-713, as amended by that certain Amendment of
Declaration of Protective Covenants dated June 18, 1981 and recorded on June 19,
1981 in the real estate records of Bernalillo County in the State of New Mexico
as Document No. 81-32370 at Book 858 at Pages 932-940, and as amended by that
certain Second Amendment of Declaration of Protective Covenants dated July 18,
1986 and recorded on July 23, 1986 in the real estate records of Bernalillo
County, New Mexico as Document No. 86-67339 at Book 375-A at Pages 161-171 (the
"Declaration").
H-1
48
B. Assignor is the declarant by virtue of that certain
Assignment and Assumption of Declarant Obligations dated as of November 17, 1997
and recorded on November 17, 1997 in the real estate records of Bernalillo
County, New Mexico as Document No. 97-120850.
C. Assignor has transferred to Assignee its interest of Assignor
in the real property encumbered by the Declaration.
D. Assignor desires to assign to Assignee all of the rights and
obligations of Assignor as declarant under the Declaration, and Assignee desires
to accept the assignment of the rights and obligations and to assume Assignor's
rights and obligations as declarant under the Declaration, on the terms and
conditions below.
ACCORDINGLY, Assignor and Assignee agree:
1. As of the date of this Assignment (the "Effective Date"),
Assignor assigns to Assignee all of the rights and obligations of Assignor as
declarant under the Declaration.
2. Assignor hereby agrees to indemnify Assignee against and hold
Assignee harmless from any and all liabilities, losses, damages, claims, costs
or expenses, including, without limitation, reasonable attorneys' fees and costs
(collectively, the "Claims"), originating prior to the Effective Date and
relating to Assignor's rights and obligations as declarant under the
Declaration.
3. As of the Effective Date, Assignee hereby assumes all of
Assignor's rights and obligations as declarant under the Declaration and will
indemnify Assignor against and hold Assignor harmless from any and all Claims
originating on or after the Effective Date and relating to Assignor's rights and
obligations as declarant under the Declaration.
4. To the extent, if at all, Section 56-7-1 NMSA 1978 is
applicable to this Assignment, no indemnity obligation provided in this
Assignment with respect to the real property encumbered by the Declaration shall
extend to liability, claims, damages, losses or expenses, including attorney
fees, relating to the construction, installation, alteration, modification,
repair, maintenance, servicing, demolition, excavation, drilling, reworking,
grading, paving, clearing, site preparation or development of any real property
or of any improvement on, above or under real property and arising out of (a)
the preparation or approval of maps, drawings, opinions, reports, surveys,
change orders, designs or specifications by the indemnitee, or the agents or
employees of the indemnitee, or (b) the giving of or the failure to give
directions or instructions by the indemnitee, or the agents or employees of the
indemnitee, where the giving of or failure to give directions or instructions is
the primary cause of bodily injury to persons or damage to property.
5. In the event of any dispute between Assignor and Assignee
arising out of the obligations of Assignor under this Assignment or concerning
the meaning or interpretation of any provision contained in this Assignment, the
losing party shall pay the prevailing party's costs and expenses of the dispute,
including, without limitation, reasonable attorneys' fees and costs. Any such
attorneys' fees and other expenses incurred by either party in enforcing a
judgment in its favor under this Agreement shall be recoverable separately from
and in addition to any other
H-2
49
amount included in the judgment, and the attorneys' fees obligation is intended
to be severable from the other provisions of this Assignment and to survive and
not be merged into any such judgment.
6. This Assignment shall be binding on and inure to the benefit
of Assignor and Assignee and their respective successors, successors-in-interest
and assigns.
7. This Assignment may be executed in any number of
counterparts, each of which shall be deemed an original but all of which taken
together shall constitute one and the same instrument.
8. This Assignment shall be governed by and construed in
accordance with the laws of New Mexico.
Assignor and Assignee have executed this Assignment the day and
year first above written.
Assignor: SPIEKER NORTHWEST, INC.
a California corporation
By:
--------------------------------------
Its:
-------------------------------------
Assignee: AMERICAN INDUSTRIAL PROPERTIES REIT,
a Texas Real Estate Investment Trust
By:
--------------------------------------
Its:
-------------------------------------
H-3
50
EXHIBIT I
ASSIGNMENT AND ASSUMPTION OF DECLARANT OBLIGATIONS
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
American Industrial Properties REIT
6210 North Beltline, Suite 170
Irving, Texas 75063-2656
Attention: Mr. Lew Friedland
-------------------SPACE ABOVE THIS LINE FOR RECORDER'S USE------------------
ASSIGNMENT AND ASSUMPTION
(Summit Park)
THIS ASSIGNMENT AND ASSUMPTION ("Assignment") is made and
entered into as of April __, 1998, by and between SPIEKER NORTHWEST, INC., a
California corporation ("Assignor"), and AMERICAN INDUSTRIAL PROPERTIES REIT, a
Texas Real Estate Investment Trust, with reference to the following:
A. Assignor is the successor declarant/grantor each of the
following documents (the "Declarations"):
(i) That certain Declaration of Sign and Landscaping
Easements and Maintenance Covenants dated March 31, 1988 and recorded on May 2,
1988 in the Official Records of Travis County, Texas, at BOOK 10666, PAGE 988;
(ii) That certain Declaration of Easements and Maintenance
Covenants dated March 31, 1988 in the Official Records of Travis County, Texas,
at BOOK 10667, PAGE 14;
(iii) That certain Private Access Easement and Maintenance
Agreement dated March 31, 1988 and recorded on May 2, 1988 in the Official
Records of Travis County, Texas, at BOOK 10667, PAGE 1; and
I-1
51
(iv) That certain Private Access Easement and Maintenance
Agreement dated March 31, 1988 and recorded on May 2, 1988 in the Official
Records of Travis County, Texas, at BOOK 10666, PAGE 975.
B. The parties hereto desire that Assignee become the successor
declarant/grantor under the Declarations in connection with its acquisition from
Assignor of the real property (the "Property") to which the Declarations relate.
NOW, THEREFORE, in consideration of the mutual promises and
agreements hereinafter contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. Assignment and Assumption. Effective upon the date of
recordation (the "Effective Date") of the deed of the Property by Assignor to
Assignee, Assignor assigns to Assignee all of Assignor's rights, powers and
reservations under the Declarations, and Assignee accepts such assignment and
assumes and agrees to perform the duties and obligations of Assignor accruing or
arising under the Declarations from and including the Effective Date.
2. Indemnification.
(a) If Assignee fails to perform any duty or obligation
accruing or arising under the Declarations from and including the Effective
Date, Assignee shall indemnify and hold harmless Assignor from and against any
and all claims, demands, losses, damages, liabilities, costs and expenses
(including, without limitation, reasonable attorneys' fees) resulting therefrom.
If any litigation or other action is brought against Assignor by reason of any
such failure, Assignee shall, upon Assignor's request, defend same at Assignee's
expense by counsel reasonably satisfactory to Assignor.
(b) If Assignor fails to perform any duty or obligation
accruing or arising under the Declarations prior to the Effective Date, Assignor
shall indemnify and hold harmless Assignee from and against any and all claims,
demands, losses, damages, liabilities, costs and expenses (including, without
limitation, reasonable attorneys' fees) resulting therefrom. If any litigation
or other action is brought against Assignee by reason of any such failure,
Assignor shall, upon Assignee's request, defend same at Assignor's expense by
counsel reasonably satisfactory to Assignee.
3. Attorneys' Fees. In any litigation, arbitration or other
action or proceeding arising from this Assignment between the parties hereto,
the prevailing party shall be entitled to recover reasonable attorneys' fees and
costs incurred therein.
4. Successors and Assigns. This Assignment shall be binding
upon and inure to the benefit of the parties hereto and their respective heirs,
executors, administrators, successors and assigns.
5. Miscellaneous. This Assignment constitutes the entire
agreement between the parties hereto with respect to the subject matter hereof
and can be modified only by a writing signed by the parties hereto. This
Assignment shall be governed by and construed in accordance with the laws of the
State of Texas. Time is of the essence. This Assignment may be
I-2
52
executed in counterparts with the same effect as if the parties hereto had
executed the same document.
IN WITNESS WHEREOF, the parties hereto have executed this
Assignment and Assumption as of the date first set forth above.
AMERICAN INDUSTRIAL PROPERTIES REIT, SPIEKER NORTHWEST, INC.
a Texas Real Estate Investment Trust a California corporation
By: By:
-------------------------------- ------------------------------
Its: Its:
------------------------------- -----------------------------
I-3
53
SCHEDULE 1
LIST OF PERSONAL PROPERTY
S1-1
54
SCHEDULE 2
DISCLOSURE ITEMS
Tucson Tech Center, Arizona
o Some portions of the roof have leaks
o The roof needs repairs
o Avent, Inc. is currently appealing the 1998 tax valuation of the property
Black Canyon Tech, Arizona
o Metwest intends to sublease its leased space and/or vacate the leased space
before the expiration of its lease
o Sunstrand's tenant improvement allowance
o Drywells located on property may not be registered
Aerotech R&D, Colorado
o Some portions of the roof have leaks
Academy Pointe Atrium II, Colorado
o Compressor currently being replaced
o Property may not be in compliance with certain ADA requirements
o Overlook Systems and OAO Corporation have outstanding tenant improvement
allowances
Broadbent Business Park/Land, New Mexico
o Some portions of the roof have leaks
o Cigna's dispute with WCB (prior owner) over payment of building paint job
Summit Park/Land, Texas
o Radian has an outstanding tenant improvement allowance
o Dell Computer has an outstanding tenant improvement allowance
o Dell Computer one (1) Letter of Credit security deposit
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55
SCHEDULE 3
PREAPPROVED LEASES AND LEASE TERMS
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56
SCHEDULE 4
LIST OF EXISTING LEASES
(AS OF ______________________, 1998)
S4-1
57
SCHEDULE 5
LIST OF SERVICE CONTRACTS
[SEE ATTACHED]
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58
SCHEDULE 6
PENDING OR THREATENED LITIGATION
None
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59
SCHEDULE 7
LIST OF MAJOR TENANTS
[See Attached]
S7-1