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EXHIBIT 10.66
PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
NORTH AUSTIN OFFICE, LTD.
AND
AMERICAN INDUSTRIAL PROPERTIES REIT
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PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (the "Agreement") is dated as of
February ___, 1998, (the "Effective Date") by and between NORTH AUSTIN OFFICE,
LTD., a Texas limited partnership ("Seller"), and AMERICAN INDUSTRIAL
PROPERTIES REIT, a Texas real estate investment trust ("Buyer").
IN CONSIDERATION of the respective agreements hereinafter set forth,
Seller and Buyer agree as follows:
1. Property Included in Sale. Seller hereby agrees to sell and convey
to Buyer, and Buyer hereby agrees to purchase from Seller, subject to the terms
and conditions set forth herein, the following:
(a) that certain real property located in Austin, Travis County,
Texas, and being more particularly described in Exhibit A attached
hereto and incorporated herein for all purposes (the "Land");
(b) 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 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");
(c) all improvements and fixtures located on the Land and
appurtenances, including, without limitation, that certain office
building and related improvements located on the Land, and 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");
(d) all tangible personal property owned by Seller located on or in
or used in connection with the Real Property as of the date hereof and
as of the "Closing Date" (as defined in Paragraph 8(b) below)
including, without limitation, those items described in the Personal
Property Inventory attached hereto as Exhibit B attached hereto
(collectively, the "Tangible Personal Property"); and
(e) any intangible personal property now or hereafter owned by
Seller and used in the ownership, use or operation or development of
the Real Property and Tangible Personal Property, including, without
limitation, the right to use the name "WHITNEY JORDAN PLAZA" and any
other trade name now used in connection with the Real Property and, to
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the extent approved by Buyer pursuant to this Agreement, any contract
or lease rights (including, without limitation, the lessor's interest
in and to all tenant leases, rental agreements, subleases and
tenancies, including all amendments, modifications, agreements,
records, substantive correspondence, and other documents affecting in
any way a right to occupy any portion of the Real Property
(individually and collectively, the "Leases"), and Seller's interest
in all security deposits and prepaid rent, if any, under the Leases
and any and all guaranties of the Leases, utility contracts,
warranties or other agreements or rights relating to the ownership,
use and operation of the Real Property or Tangible Personal Property
(collectively, the "Intangible Property", and together with the
Tangible Personal Property, the "Personal Property").
All of the items referred to in Subparagraphs (a), (b), (c), (d) and
(e) above are collectively referred to as the "Property."
2. Purchase Price; Earnest Money.
(a) The purchase price of the Property is TWENTY-TWO MILLION TWO
HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS ($22,250,000.00), subject to
adjustments as provided in this Agreement (the "Purchase Price").
(b) The Purchase Price less any adjustments to the Purchase Price
provided this Agreement, shall be delivered in immediately available
funds at the closing of the purchase and sale contemplated hereunder
(the "Closing").
(c) Within one (1) day after the Effective Date, Buyer shall
deliver to title company (the "Escrow Holder") a copy of this
Agreement together with a certified check or wired funds in the amount
of $200,000.00; within thirty (30) days after the Effective Date,
Buyer shall deliver to Escrow Holder a certified check or wired funds
in the amount of $300,000.00, for a total of $500,000.00 (collectively
the "Earnest Money"), which Earnest Money shall be held in escrow by
the Escrow Holder and delivered to the party entitled thereto in
accordance with the provisions of this Agreement. The Earnest Money
shall be invested by the Escrow Holder in an interest-bearing escrow
account in a bank or other financial institution acceptable to Buyer.
All interest earned on the Earnest Money shall belong to Buyer and
shall be paid to Buyer on demand.
(d) A portion of the Earnest Money in the amount of One Hundred and
No/100 Dollars ($100.00) (the "Independent Contract Consideration")
shall be deemed independent consideration for Seller's execution and
delivery of this Contract. If the Closing occurs, the Independent
Contract Consideration shall be applied as a credit towards the
Purchase Price. However, if the Closing does not occur, for any
reason, the Independent Contract Consideration shall be paid by the
Escrow Holder to Seller.
(e) Subject to the Conditions Precedent to closing as set out in
paragraph 6 below but notwithstanding any other provision of this
Agreement to the contrary, thirty (30) days after the Effective Date,
$25,000.00 of the Earnest Money shall become non-refundable
(2)
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unless Buyer thereafter terminates this Agreement because of a
material default by Seller occurring thereafter, provided, however,
that in the event Seller does not provide a Preliminary Document
within the time required by subparagraph 4 (a) for the delivery to
Buyer of such Preliminary Document, the said 30-day time period shall
be extended by the number of additional days Seller takes to provide
such Preliminary Document to Buyer.
(f) Subject to the Conditions Precedent to closing as set out in
paragraph 6 below and subject to the conditions set out in section 5
(c) below, forty-five (45) days after the Effective Date, the
remainder of the Earnest Money shall become non-refundable.
3. Title to the Property.
(a) At the Closing, Seller shall convey to Buyer indefeasible and
insurable fee simple title to the Real Property and Improvements, by
duly executed and acknowledged special warranty deed substantially in
the form attached hereto as Exhibit C (the "Deed"). Evidence of
delivery of indefeasible and insurable fee simple title shall be the
issuance by Texas Professional Title, Inc. (the "Title Company") to
Buyer at the Closing of an Owner's Policy of Title Insurance in the
form promulgated by the Texas State Board of Insurance in the amount
of the Purchase Price at no more than the standard rates allowed by
the Texas Department of Insurance, insuring fee simple title to the
Real Property in Buyer, subject only to such exceptions as Buyer shall
approve pursuant to Paragraph 5, below (the "Title Policy"). The Title
Policy shall provide full coverage against mechanics' and
materialmen's liens, the printed form survey exception shall be
limited to "shortages in area" and the standard exception for taxes
shall read: "standby fees and taxes for the year 1998 and subsequent
years, and subsequent assessments for prior years due to change in
land usage or ownership" and shall contain such special endorsements
as Buyer may reasonably require, including, without limitation, any
endorsements required as a condition to Buyer's approval of any title
exceptions pursuant to Paragraph 5, below (the "Endorsements").
(b) At the Closing, Seller shall transfer title to the Tangible
Personal Property by a special warranty bill of sale in the form
attached hereto as Exhibit D (the "Bill of Sale"), such title to be
free of any liens, encumbrances or interests.
(c) At the Closing, Seller shall transfer title to the Intangible
Property, the "Assumed Contracts" (as hereinafter defined), and the
"Warranties and Guaranties" (as hereafter defined) by an assignment of
intangible property in the form attached hereto as Exhibit E (the
"Assignment of Intangible Property"), and shall assign the Leases by
an assignment of leases in the form attached hereto as Exhibit F (the
"Assignment of Leases"), such title to be free of any liens,
encumbrances or interests.
(d) Anything contained herein to the contrary notwithstanding and
notwithstanding any approval or consent given by Buyer hereunder,
Seller shall cause all monetary encumbrances, including without
limitation all mechanics' liens to be released from
(3)
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the Property on or prior to the Closing and shall cause the Title
Company to insure title to the Property as vested in Buyer without any
exception for such matters.
4. Due Diligence Documents.
(a) Within ten (10 ) days after the Effective Date, Seller shall
provide to Buyer, at Seller's expense, the Title Commitment (as
defined in subparagraph 4 (a) (i) below) and the Survey (as defined in
subparagraph 4 (a) (ii) below), and, except as specifically provided
for under subparagraph 4 (a) (xi) below, within five (5) days after
the Effective Date, Seller shall provide to Buyer, at Seller's
expense, the other documents described in this subparagraph 4 (a)
(collectively the documents described in this subparagraph 4 (a),
including but not limited to the Title Commitment and Survey, are
herein referred to as the "Preliminary Documents") to the extent in
Seller's possession and/or control. In the event Seller does not
deliver one or more of the Preliminary Documents to Buyer within the
required time period, Seller shall not be in default but shall have an
additional period of time for providing the Preliminary Document
(continuing until the end of the original Due Diligence Period as set
out in subparagraph 5 (a) below) in which to provide any and every
such Preliminary Document, in which event (i) the 30-day time period
for $25,000.00 of the Earnest Money becoming non-refundable as
provided for in subparagraph 2 (e) above, (ii) the 45-day time period
for the remainder of the Earnest Money becoming non-refundable as set
forth in subparagraph 2(f), (iii) the 45-day Due Diligence Period as
set out in subparagraph 5 (a), and (iv) the Closing Date, shall all be
extended by the number of additional days Seller takes to provide such
Preliminary Document to Buyer. The Preliminary Documents consist of
the following:
(i) Title Commitment. A current title commitment
(the "Title Commitment") for an owner's Policy of title
insurance, covering the Real Property and issued by the Title
Company, together with a legible copy of each document, map
and survey referred to in the Title Commitment;
(ii) Survey. An up-dated survey of the Property
dated within thirty (30) days of the Effective Date (the
"Survey") prepared by a registered public surveyor, in
accordance with the most recent Texas Surveyor's Association
standards for a Category A1, Condition II Survey, certified
by such surveyor to Buyer and the Title Company in the form
attached hereto as Exhibit G and acceptable to the Title
Company for the purpose of limiting the standard printed
exception for survey matters to "shortages in area" in the
Title Policy. The Survey at a minimum shall (a) set forth the
legal description and street address of the Real Property,
(b) show the location of all of the Improvements, all
recorded restrictions, easements, rights-of-way, ingress and
egress, all building restriction lines or applicable yard or
setback requirements, all curb cuts, all utility lines and
facilities, all visible restrictions, easements,
rights-of-way, possible rights of third parties, party walls
and encroachments (either onto the Land from adjacent
property or onto adjacent property from the Land) affecting
the Real Property, and (c) locate all improvements on
adjoining property which are within five feet of the property
lines of the Land;
(4)
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(iii) Agreements. Copies of written, agreements,
contracts and other documents, whether existing or proposed
as of the Effective Date, which (a) affect the Property and
(b) are not disclosed by the Title Commitment, including
without limitation any agreements relating to the service,
operation, repair, supply, advertising, promotion, sale,
leasing or management of the Property or the use of common
facilities. If no such documents exist, Seller shall furnish
its certification to that effect. Buyer shall designate,
prior to the expiration of the "Due Diligence Period"
(hereafter defined), those contracts that Seller shall assign
to Buyer and that Buyer shall assume as of the Closing Date,
which contracts to be assumed by Buyer are referred to herein
as "Assumed Contracts";
(iv) Plans. Copies of all as-built plans and
specifications for the Improvements, and as-built drawings
for all underground utilities (collectively, the "Plans");
(v) Warranties. Copies of any and all guarantees or
warranties and other rights given to Seller in connection
with the construction of the Improvements or the purchase of
any of the Personal Property, if any (collectively the
"Warranties and Guaranties");
(vi) Reports. All reports in Seller's possession or
control relating to the Property including reports relating
to the (i) environmental condition of the Property, including
without limitation, environmental reports, environmental
audits and the like (which reports are listed on Exhibit H);
and (ii) soil, seismological, geological and drainage
conditions, and the flood characteristics of the Property;
(vii) Rent Roll. A rent roll, dated no earlier than
ten (10) days prior to the Effective Date, and certified by
Seller to be accurate and complete, showing:
1) the name and address of each tenant of the
Improvements;
2) the rentable square footage for each tenant;
3) the commencement and expiration date of each
tenant's Lease;
4) the monthly rental payable by each tenant
(including the date and amount of any schedule
rent escalation's during the Lease term);
5) the amount and nature of expenses for which the
tenant is responsible;
6) the amount of any security deposit;
7) details of any extension options, any options
to terminate or lease additional space, and any
rights of first refusal;
8) any free rent, or other unexpired concessions
or inducements, or obligations of Seller; and
9) aging of current accounts receivable from
tenants, along with a listing of any prepaid
rent (all rent is assumed due on the first of
the month unless otherwise noted), (the "Rent
Roll").
(5)
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The most current Rent Roll is attached as Exhibit I.
Seller shall deliver to Buyer for its approval, ten
(10) days prior to the Closing Date, an updated Rent
Roll dated not earlier than ten (10) days prior to
the Closing Date and certified by Seller to be
accurate and complete (the "Updated Rent Roll").
(viii) Leases. Copies of all Leases with all tenants
of the Improvements, certified by Seller and access to copies
of all correspondence to or from such tenants. Seller may
comply with its obligation to deliver copies of Leases by
providing Buyer and its agents with full access to its lease
files;
(ix) Operating Statements. Copies of operating
statements for the Property certified by Seller (or audited,
if audited statements are available) to be accurate and
complete, which shall cover the past two (2) calendar years
and the monthly period of January 1998 as it becomes
available (Buyer hereby acknowledging and agreeing that the
operating statements for January 1998 is in the process of
being prepared and shall be provided to Buyer within five (5)
business days after it is prepared and finalized). Such
statements shall include itemization of income and expense,
itemization of all capital expenditures made and a report of
net cash receipts during the respective periods;
(x) Licenses, Etc. Copies of any licenses, permits
or certificates required by governmental authorities in
connection with construction or occupancy of the
Improvements, including, without limitation, building
permits, certificates of completion, certificates of
occupancy, environmental permits and licenses, and swimming
pool and sign permits;
(xi) Insurance Policies. Copies of all liability,
fire and casualty insurance policies carried by Seller and an
insurance claims history for the most recent calendar year
prior to Closing, which shall be delivered within two (2)
weeks after the Effective Date;
(xii) Commission Agreements. A complete list, and
copies, of all agreements for leasing commissions and/or
locator fees payable on prior leases, existing leases and
renewals or options affecting the Property (and, if such
agreements show a commission or locator fee which will be due
or payable after the Effective Date, an executed release from
the broker or finder releasing Buyer and its successors and
assigns from any obligation to pay such commission or locator
fee and agreeing to look solely to Seller for payment (the
"Commission Releases"));
(xiii) Other Documents. Current property tax bills,
and all data, correspondence, documents, agreements, waivers,
notices, applications and other records with respect to the
Property relating to transactions with taxing authorities,
governmental agencies, utilities, vendors, tenants and others
with whom Buyer may be dealing from and after the Closing
Date. Seller may satisfy this requirement by making its files
available to Buyer.
(6)
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(b) Independent Audit. Promptly following the execution of
this Agreement and to the extent not already provided pursuant to the
terms of Paragraph 4(a), above, Seller shall provide to Buyer's
representatives and independent accounting firm access to all
financial and other information relating to the Property which would
be sufficient to enable Buyer's representatives and independent
accounting firm to prepare audited financial statements for 1996, 1997
and 1998 year-to-date in conformity with generally accepted accounting
principles and to enable them to prepare such statements, reports or
disclosures as Buyer may deem necessary or advisable. Seller shall
reasonably cooperate with Buyer's representatives and independent
accounting firm in connection with the aforementioned financial
analysis and shall provide any additional information necessary to
allow Buyer to make disclosures required by and otherwise comply with
the financial accounting requirements of Regulation S-X promulgated by
the Securities and Exchange Commission. Seller shall provide Buyer's
independent accounting firm a signed representation letter which will
be sufficient to enable an independent public accountant to render an
opinion on the financial statements related to the Property. 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 and to the extent Seller's
financial statements pertaining to the Property for any periods during
the years 1996, 1997 or 1998 year-to-date have been audited, promptly
after the execution of this Agreement, Seller shall provide Buyer with
copies of such audited financial statements and shall cooperate with
Buyer's representatives and independent public accountants to enable
them to contact the auditors who prepared such audited financial
statements and to obtain, at Buyers expense, a reissuance of such
audited financial statements. 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. The provisions of this section 4 (b) shall
survive Closing.
5. Due Diligence Review.
(a) Approval of Preliminary Documents and Physical Condition.
Buyer shall review each of the Preliminary Documents, and the physical
condition of the Property, and such other items as Buyer deems
necessary and shall advise Seller in writing of any objectionable
condition revealed in its review by written notice to Seller within
twenty (20) days after Buyer's receipt of all Preliminary Documents.
Buyer shall complete its review of the Preliminary Documents and the
physical condition of the Property and all other reviews permitted or
otherwise provided for in this Agreement on or before forty-five (45)
days after the Effective Date (the "Due Diligence Period"). If Buyer
fails to so notify Seller within the Due Diligence Period as to any or
all of the Preliminary Documents, or as to the physical condition of
the Property, then such Preliminary Document(s) or physical condition
shall be deemed approved by Buyer. Subject to Paragraph 3(d) and
Paragraph 6, Seller shall have five (5) business days after the
earlier of:
(i) Delivery to Seller of specific written
disapproval of all or any Preliminary Documents, or of the
physical condition of the Property; or
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(ii) Expiration of the Due Diligence Period if any
Preliminary Document or the physical condition of the
Property is deemed disapproved, to notify Buyer in writing
that either (1) Seller shall cause the Preliminary Document
or condition disapproved to be cured, removed or terminated,
as the case may be, prior to the Closing Date, or (2) Seller
shall not cause such Preliminary Document or condition to be
cured, removed or terminated.
If Seller fails to so notify Buyer within the five
(5) day period, then Seller shall be deemed to have elected
the option in clause (a)(ii)(2) above. If Seller elects the
option in clause (a)(ii)(2) above, then, subject to the
provisions of Paragraph 7, below, Buyer shall have the right
in its sole discretion to either waive the objectionable
condition and proceed with the purchase pursuant to this
Agreement or terminate this Agreement and receive a return of
the Earnest Money. If Seller gives notice pursuant to
(a)(ii)(l), above, and fails to remove or otherwise satisfy
the objectionable condition, and Buyer is unwilling to waive
such condition, Seller shall be in default and Buyer shall
have the rights and remedies set forth in Paragraph 7, below.
(b) Termination of Agreement . Notwithstanding anything in
this Agreement to the contrary, but subject to the loss of part or all
of its Earnest Money, Buyer shall have the right to terminate this
Agreement at any time during the Due Diligence Period. In the event
this Agreement is terminated pursuant to Paragraph 5, then, subject to
the provisions of Paragraph 7, the Earnest Money shall be returned to
Buyer and all obligations of Buyer and Seller hereunder (except the
provisions of this Agreement which recite that they survive
termination) shall terminate and be of no further force or effect. The
provisions of this Subparagraph shall survive termination of this
Agreement.
(c) In the event Buyer fails to terminate this Agreement
pursuant to any provisions of this section 5 within the Due Diligence
Period, the earnest money shall become non-refundable subject only to
(i) the Conditions Precedent to Closing as set out in paragraph 6
below and (ii) a material default by Seller thereafter occurring
resulting in Buyer's termination of this Agreement.
6. Conditions Precedent to Closing. The following are conditions
precedent to Buyer's obligation to purchase the Property (the "Conditions
Precedent"). The Conditions Precedent are intended solely for the benefit of
Buyer and may be waived only by Buyer in writing. In the event any Condition
Precedent is not satisfied or waived by Buyer, Buyer may, in its sole and
absolute discretion, terminate this Agreement at which point the Earnest Money
shall be returned to Buyer and, subject to the provisions of Paragraph 7, all
obligations of Buyer and Seller hereunder (except provisions of this agreement
which recite that they survive termination) shall terminate and be of no
further force or effect; provided, however, that in the event any of the
Conditions Precedent have not been satisfied or waived, Buyer shall so inform
Seller of same and Seller shall have thirty (30) days from the date of such
notification to satisfy such Condition Precedent.
(8)
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(a) All of Seller's representations and warranties contained
in this Agreement shall have been substantially true and correct in
all material respects when made and shall be substantially true and
correct in all material respects as of the Closing Date.
(b) The physical condition of the Property shall be
substantially the same on the Closing Date as on the date of Buyer's
execution of this Agreement, except for reasonable wear and tear and
loss by casualty (subject to the provisions of Paragraph 13, below)
and repairs, replacements and improvements made with Buyer's written
approval.
(c) As of the Closing Date, there shall be no litigation or
administrative agency or other governmental proceeding of any kind
whatsoever, pending or threatened, which was not disclosed in writing
to Buyer during the Due Diligence Period and which, after Closing
would, in Buyer's reasonable opinion, materially adversely affect the
value of the Property or the ability of Buyer to operate the Property
in the manner in which it is currently being operated, and no
proceedings shall be pending or threatened which could or would cause
the redesignation or other modification of the zoning classification
of, or of any building or environmental code requirements applicable
to, any of the Property.
(d) Seller shall terminate at or prior to the Closing Date,
at no cost or expense to Buyer, any and all contracts or other
agreements affecting the Property that are not Assumed Contracts.
(e) Seller shall have substantially complied with all of
Seller's material duties and obligations contained in this Agreement.
(f) Seller shall have delivered to Buyer tenant certificates
("Tenant Certificates") dated within thirty (30) days of the Closing
Date in a form substantially similar to Exhibit "L" attached hereto
from tenants under Leases of the Property representing ninety percent
(90%) of the gross revenue of the Property; provided, that in the
event that any state agency, including but not limited to the Texas
Workforce Commission, requires the use of a different form, Buyer
shall accept such different form for such tenant.
7. Remedies.
(a) In the event the sale of the Property is not consummated
solely because of a breach or default under this Agreement on the part
of Buyer, the Earnest Money shall be paid to and retained by Seller as
liquidated damages. The parties have agreed that Seller's actual
damages, in the event of a default by Buyer, would be extremely
difficult or impracticable to determine. THEREFORE, BY PLACING THEIR
INITIALS BELOW, THE PARTIES ACKNOWLEDGE THAT FIVE HUNDRED THOUSAND AND
NO/100 DOLLARS ($500,000.00) HAS BEEN AGREED UPON, AFTER NEGOTIATION,
AS THE PARTIES' REASONABLE ESTIMATE OF SELLER'S DAMAGES AND AS
SELLER'S EXCLUSIVE REMEDY AGAINST BUYER, AT LAW OR IN EQUITY, IN THE
EVENT OF A DEFAULT UNDER THIS AGREEMENT ON THE PART OF BUYER.
INITIALS: Seller __________ Buyer __________
(9)
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(b) In the event the sale of the Property is not consummated
solely because of a material default under this Agreement on the part
of Seller occurring after the expiration of the Due Diligence Period
(other than a delay by Seller in providing any of the Preliminary
Documents as provided for above, which delay shall not be deemed a
default hereunder), Buyer shall have the option of either (1)
terminating this Agreement and receiving back the Earnest Money, or
(2) continue this Agreement pending Buyer's action for specific
performance of this Agreement.
8. Closing and Escrow.
(a) Upon mutual execution of this Agreement, the parties
hereto shall deposit an executed counterpart of this Agreement with
Escrow Holder and this Agreement shall serve as instructions to Escrow
Holder for consummation of the purchase and sale contemplated hereby.
(b) The parties shall conduct an escrow Closing. The Closing
shall take place at the offices of Seller's legal counsel, Dodd &
Batla, A Professional Corporation, located at 800 Brazos, Suite 1400,
Austin, Texas 78701. D. Michael Dodd shall handle the Closing as agent
of the Title Company. The Closing shall be on or before sixty (60)
days from the Effective Date (as extended, if applicable, pursuant to
section 4 (a) and Paragraph 6), or on such other date mutually agreed
upon between Buyer and Seller in writing (the "Closing Date"). In the
event the Closing does not occur on or before the Closing Date, Escrow
Holder shall, unless it is notified by both parties to the contrary
within five (5) days after the Closing Date, return to the depositor
thereof items which were deposited hereunder; provided, however, that
in the event Escrow Holder receives conflicting notices, Escrow Holder
may place such items in the registry of the District Court of Travis
County, Texas. Any such return shall not, however, relieve either
party of any liability it may have for its wrongful failure to Close.
(c) At or before the Closing, Seller shall deliver to Escrow
Holder or Buyer the following:
(i) a duly executed and acknowledged Deed;
(ii) a duly executed Bill of Sale;
(iii) originals of all Leases and a duly executed
and acknowledged Assignment of Leases;
(iv) originals of the Assumed Contracts not
previously delivered to Buyer (to the extent originals are
available; provided if originals are not available Seller
shall provide Buyer with true, correct and complete copies);
(v) a duly executed Assignment of Intangible
Property;
(10)
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(vi) originals of the building permits and
certificates of occupancy for the Improvements and all
tenant-occupied space included within the Improvements and
all Warranties and Guaranties not previously delivered to
Buyer;
(vii) notices to the Tenants, each prepared and
completed by Seller for each Tenant, in the form attached as
Exhibit J, each duly executed by Seller;
(viii) the Tenant Certificates;
(ix) a duly executed affidavit that Seller is not a
"foreign person" within the meaning of Section 1445(e)(3) of
the Internal Revenue Code of 1986 (the "Code") in the form
attached as Exhibit K;
(x) such resolutions, authorizations, bylaws or
other corporate and/or partnership documents or agreements
relating to Seller and its partners as shall be reasonably
required by Buyer;
(xi) a full release of all monetary encumbrances
affecting the Property, including without limitation any
mechanics' liens and such bond, indemnity or other
arrangements as shall be necessary to cause the Title Company
to insure title to the Property as vested in Buyer without
any exception for such matters;
(xii) a closing statement in form and content
satisfactory to Buyer and Seller (the "Closing Statement")
duly executed by Seller;
(xiii) all keys to the Property (except for keys in
the possession of the tenants);
(xiv) evidence of termination of any contracts and
other agreements affecting the Property that are not Assumed
Contracts; and
(xv) any documents or agreements reasonably required
by the Title Company to issue the Title Policy.
Buyer may waive compliance on Seller's part under any of the foregoing items by
an instrument in writing.
(d) At or before the Closing, Buyer shall deliver to Escrow
Holder or Seller the following:
(i) a duly executed Assignment of Leases;
(ii) a duly executed Assignment of Intangible
Property;
(iii) the Closing Statement, duly executed by Buyer;
and
(11)
13
(iv) the Purchase Price less any holdbacks and
proration credits provided for this Agreement.
(e) Seller and Buyer shall each deposit such other
instruments as are reasonably required by Escrow Holder or Title
Company or otherwise required to close the escrow and consummate the
purchase of the Property in accordance with the terms hereof.
(f) Prorations, Closing Costs and Adjustments.
(1) The following are to be apportioned as of 12:01
AM on the Closing Date, as follows:
(i) Rent. Rent under the Leases shall be
apportioned as of the Closing Date. With respect to
any rent arrearages arising under the Leases, after
Closing, Buyer shall pay to Seller any rent actually
collected which is applicable to the period
preceding the Closing Date; provided, however, that
all rent collected by Buyer shall be applied first
to all unpaid rent accruing after the Closing Date,
and then to unpaid rent accruing prior to the
Closing Date. Buyer shall not be obligated to take
any steps to recover any rent arrearages. Seller
shall be permitted to pursue its remedy for
collection of any rent arrearages applicable to the
period prior to the Closing Date, provided that
Buyer shall incur no cost, expense or liability in
connection therewith, but Seller shall not be
permitted to enforce any other legal or equitable
remedies specifically including commencing eviction
procedures.
(ii) Leasing Costs. Seller shall pay as of
the Closing all leasing commission and tenant
improvement costs, if any, in connection with any
Lease executed on or before the Closing that are or
will become due and payable as of or after the
Closing. Buyer shall be entitled to a credit against
the Purchase Price for any such commissions or costs
incurred in connection with any Lease executed on or
before the Closing.
(iii) Security Deposits. Buyer shall be
entitled to a credit against the Purchase Price for
the total sum of all security deposits paid to
Seller by tenants under any Leases, and any interest
earned thereon which, by law or the terms of such
Leases, is payable to such tenants.
(iv) Unexpired Concessions. Buyer shall be
entitled to a credit against the Purchase Price for
any free rent, abatements, or other unexpired
concessions under any Leases to the extent they
apply to any period after the Closing.
(v) Tenant Charges. Where the Leases contain
tenant obligations for taxes, common area expenses,
operating expenses or additional charges of any
other nature, and where Seller has collected any
portion thereof in excess
(12)
14
of amounts owed by tenants for such items for the
period prior to the Closing Date, then there shall be
an adjustment and credit given to Buyer on the
Closing Date for such excess amounts collected. Buyer
shall apply all such excess amounts to the charges
owed by tenants for such items for the period after
the Closing Date and, if required by the Leases,
shall rebate or credit tenants with any remainder. If
it is determined that the amount collected during
Seller's ownership period exceeded the tenants'
obligation to pay for such expenses incurred during
the same period by more than the amount previously
credited to Buyer at Closing, then Seller shall
promptly pay to Buyer the deficiency upon demand
after the Closing.
(vi) Utility Charges. Seller shall cause all
the utility meters to be read on the Closing Date,
and will be responsible for the cost of all
utilities used prior to the Closing Date, except to
the extent such utility charges are billed to and
paid by tenants directly.
(vii) Real Estate Taxes and Special
Assessments. General real estate taxes payable for
the 1997 calendar year and all prior years shall be
paid by Seller. General real estate taxes payable
for the 1998 calendar year shall be prorated between
Seller and Buyer as of the Closing Date. Seller
shall pay on or before Closing the full amount of
any bonds or assessments against the Property
including interest payable therewith, including any
bonds or assessments that may be payable after the
Closing Date as a result of or in relation to the
construction or operation of any Improvements or any
public improvements that took place or for which any
assessment was levied prior to the Closing Date.
Buyer shall pay the full amount of any bonds or
assessments incurred after the Closing Date that are
not subject to the immediately preceding sentence.
If the amount of general real estate taxes for the
1998 calendar year cannot be determined on the
Closing Date, then a proration shall be made by the
parties based on a reasonable estimate of the real
property taxes applicable to the Property and the
parties shall adjust the proration when the actual
amount becomes known upon the written request of
either party made to the other.
(viii) Other Apportionments. Amounts payable
under the Assumed Contracts, annual or periodic
permit and/or inspection fees (calculated on the
basis of the period covered), and liability for
other Property operation and maintenance expenses
and other recurring costs shall be apportioned as of
the Closing Date.
(ix) Preliminary Closing Adjustment. Seller
and Buyer shall jointly prepare and approve a
preliminary Closing adjustment on the basis of the
Leases and other sources of income and expenses, and
shall deliver such computation to Escrow Holder
prior to Closing.
(13)
15
(x) Post-Closing Reconciliation. Subject to
the provisions of Subparagraph vii above, if any of
the aforesaid prorations cannot be definitely
calculated on the Closing Date, then they shall be
estimated at the Closing and definitely calculated
as soon after the Closing Date as feasible, but in
any event within sixty (60) days after the Closing
Date. As soon as the necessary information is
available, Buyer shall conduct a post-Closing audit
to determine the accuracy of all prorations made to
the Purchase Price (the "Post-Closing Audit").
Either party owing the other party a sum of money
based on such subsequent proration(s) or the
Post-Closing Audit shall promptly pay said sum to
the other party, together with interest thereon at
the rate of two percent (2%) over the "prime rate"
(as announced from time to time in the Wall Street
Journal) per annum from the Closing Date to the date
of payment if payment is not made within ten (10)
days after delivery of a bill therefor.
(2) Closing Costs. Seller shall pay for the Survey,
the Title Commitment and the premium for the Title Policy,
the charge for the survey deletion, the cost of any
Endorsements, the chain of title search any escrow fees or
costs and sales tax (if any). Recording fees, shall be paid
fifty percent (50%) by Buyer and fifty percent (50%) by
Seller. Seller shall be responsible for all costs incurred in
connection with the prepayment or satisfaction of any loan or
bond secured by the Property including, without limitation,
any prepayment fees, penalties or charges. All other costs
and charges of the escrow for the sale not otherwise provided
for in this Agreement shall be allocated in accordance with
the closing customs for Travis County, Texas. Buyer and
Seller shall each be responsible for their respective legal
fees to negotiate and execute this Agreement. In the event
this Agreement is terminated or Closing occurs, the foregoing
allocation of costs shall survive such termination or
Closing.
(3) Survival. The provisions of this Subparagraph
(f) shall survive the Closing.
9. Representations, Warranties and Covenants of Seller. As of the date
hereof and again as of Closing, Seller represents and warrants to, and
covenants with, Buyer as follows:
(a) To Seller's knowledge, (i) there are now, and at the time
of Closing will be, no material physical or mechanical defects of the
Property, including, without limitation, the structural and
load-bearing components of the Property, the parking lots, the
plumbing, heating, air conditioning and electrical and life safety
systems, and (ii) all roofs have approximately ten (10) years of
useful life remaining (assuming the roofs are subject to a normal
maintenance program), provided, however, Buyer shall verify to its
satisfaction during the Due Diligence Period the number of years of
remaining useful life of all roofs and this representation shall not
serve as a warranty or covenant and shall not survive closing.
(b) All documents delivered by Seller to Buyer, or made
available to Buyer for review in connection with the transactions
contemplated hereunder, including without
(14)
16
limitation, all documents described in Paragraph 4, above, are and at
the time of Closing will be complete copies of all such documents in
Seller's possession and/or control.
(c) To Seller's knowledge, there are no condemnation,
environmental, zoning or other land-use regulation proceedings, either
instituted or planned to be instituted, affecting the Property (other
than as set forth in the Title Commitment). Seller shall notify Buyer
promptly of any such proceedings of which Seller becomes aware.
(d) Seller has not been served with, Seller has no knowledge
of any pending, and Seller has received no written notice of any
threatened litigation against Seller or any basis therefor that arises
out of the ownership of the Property. Seller shall notify Buyer
promptly of any such litigation of which Seller becomes aware.
(e) (i) To Seller's knowledge, Seller and the Property is in
compliance in all material respects with all Environmental Laws; (ii)
Seller has not received any notice, order, directive, complaint or
other communication, written or oral, from any governmental agency or
other person or entity alleging the occurrence of any violation of any
Environmental Laws; and (iii) to Seller's knowledge, the Property does
not contain any building materials that contain Hazardous Material.
For the purposes of this subparagraph, the following words shall have
the following meanings:
(1) "Environmental Law" means federal, state and
local laws, statutes, ordinances, rules, regulations
(including without limitation the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended
from time to time (42 U.S.C. Sections 9601 et seq.)
("CERCLA"), the Federal Insecticide Fungicide and Rodenticide
Act of 1976 (7 U.S.C. Sections 136, et. seq. ("FIFRA") and the
applicable provisions of the Texas Health and Safety Code, and
Texas Water Code, as amended from time to time (the "Texas
Codes") and rules and regulations promulgated thereunder),
authorizations, judgments, decrees, administrative orders,
concessions, grants, franchises, agreements and other
governmental restrictions and requirements relating to the
environment or to any Hazardous Material.
(2) "Hazardous Material" means, at any time, (a) any
substance, product, chemical, compound, material, mixture,
waste or other material of any nature whatsoever (i) which is
now or hereafter listed, defined or otherwise classified
pursuant to any Environmental Laws as a "hazardous
substance", "hazardous waste", "infectious waste", "hazardous
material", "extremely hazardous waste", "toxic substance",
"toxic pollutant" or any other formulation intended to
define, list or classify substances by reason of deleterious
properties such as ignitability, corrosivity, reactivity,
carcinogenicity, toxicity or reproductive toxicity; (ii)
which is now or hereafter regulated or listed by any local,
state or federal governmental authority, entity or agency
pursuant to any Environmental Laws; or (iii) which may give
rise to any liability under any Environmental Laws or under
any statutory or common law theory based on negligence,
trespass, intentional tort, nuisance or strict liability or
under any reported decisions of state or federal court; (b)
asbestos and
(15)
17
asbestos-containing materials; and (c) radon; (d) PCB's,
petroleum and petroleum products or fractions thereof,
including without limitation, crude oil, and any fraction
thereof, natural gas, natural gas liquids, liquefied natural
gas or synthetic gas usable for fuel or any mixture thereof.
(f) Seller has not filed or been the subject of any filing of
a petition under the Federal Bankruptcy Law or any federal or state
insolvency laws or laws for composition of indebtedness or for the
reorganization of debtors.
(g) There are no free rent, abatements, incomplete tenant
improvements, rebates, allowances, or other unexpired concessions
(collectively referred to as "Offsets") or rights under any existing
or pending Leases that will be outstanding as of the Closing Date and
Seller has paid in full any of landlord's leasing costs or
obligations.
(h) No brokerage, finders fee or commission, locator fee or
similar fee or commission is due or unpaid by Seller with respect to
any Lease.
(i) The copies of the Leases delivered by Seller to Buyer
contain all of the information pertaining to any rights of any parties
to occupy the Property, including, without limitation, all information
regarding any rent concessions, tenant improvements, or other
inducements to lease.
(j) The Rent Roll is true, complete and accurate and, except
as disclosed by Seller to Buyer in writing, there exist no defaults or
events which, with the giving of notice or passage of time, or both,
would constitute a default by Seller as landlord under the Leases
listed thereon. To Seller's knowledge, there exist no defaults and no
events which, with the giving of notice or passage of time, or both,
would constitute a default by any tenants thereon.
(k) Seller is a limited partnership, duly organized and
validly existing and in good standing under the laws of the State of
Texas; this Agreement and all documents executed by Seller which are
to be delivered to Buyer at the Closing are and at the time of Closing
will be duly authorized, executed and delivered by Seller, are and at
the time of Closing will be legal, valid and binding obligations of
Seller enforceable against Seller in accordance with their respective
terms, are and at the time of Closing will be sufficient to convey
title (if they purport to do so), and do not and at the time of
Closing will not violate any provision of any agreement or judicial
order to which Seller or the Property is subject. Seller has obtained
all necessary authorizations, approvals and consents to the execution
and delivery of this Agreement and the consummation of the
transactions contemplated hereby.
(l) Seller is not a "foreign person" within the meaning of
Section 1445(f)(3) of the Code.
(m) Seller is the legal and equitable owner of the Property,
with full right to convey the same, and without limiting the
generality of the foregoing, Seller has not granted any
(16)
18
option or right of first refusal or first opportunity to any party to
acquire any interest in any of the Property.
For purposes of this Agreement, whenever the phrase "to Seller's
knowledge" or words of similar import are used, they shall be deemed to refer
to the knowledge after due and diligent inquiry of Seller's files of (i) North
Austin Office, Ltd., (ii) all general partners of the entities comprising
Seller, (iii) all individuals who have acted as property managers of the
Property while it has been owned by Seller, (iv) all employees or agents of
Seller or a general partner of Seller with supervisory responsibilities
concerning the Property, and (v) such other persons at a management or
supervisory level who would, in the ordinary course of their responsibilities
as employees or agents of Seller, receive notice from other agents or employees
of Seller or from other persons or entities of any of the matters described in
the representations and warranties in this Agreement which are limited by the
knowledge of Seller.
10. Representations and Warranties of Buyer. Buyer hereby represents
and warrants to Seller that Buyer is a real estate investment trust organized
under the laws of the State of Texas; this Agreement and all documents executed
by Buyer which are to be delivered to Seller at the Closing are or at the time
of Closing will be duly authorized, executed and delivered by Buyer, and are or
at the Closing will be legal, valid and binding obligations of Buyer, and do
not and at the time of Closing will not violate any provisions of any agreement
or judicial order to which Buyer is subject.
11. Continuation and Survival. All representations, warranties and
covenants by the respective parties contained herein or made in writing
pursuant to this Agreement are intended to and shall be deemed made as of the
date of, this Agreement or such writing and again-at the Closing, shall be
deemed to be material, and unless expressly provided to the contrary shall
survive and shall survive the execution and delivery of this Agreement and the
Closing until the second (2nd) anniversary of the Closing Date and shall
terminate upon such date except as to any claim asserted by Buyer to Seller by
notice given before such date.
12. Indemnity.
(a) Seller shall hold harmless, indemnify and defend Buyer,
its successors and assigns and their respective agents, employees,
officers, trustees, members and retirants and the Property from and
against any and all obligations, liabilities, claims, liens or
encumbrances, demands, losses, damages, causes of action, judgments,
costs and expenses (including attorneys' fees), whether direct,
contingent or consequential and no matter how arising ("Losses and
Liabilities") in any way (i) related to the Property and arising or
accruing during the time prior to the Closing; (ii) related to or
arising from any act, conduct, omission, contract or commitment of
Seller with respect to the Property; or (iii) resulting from any
misrepresentation of Seller or any inaccuracy in or breach of any
representations and warranties by Seller or resulting from any breach
or default by Seller under this Agreement.
(b) Except for Losses and Liabilities arising directly or
indirectly from or out of a circumstance resulting from a breach of
any of Seller's representations or warranties, or which shall have
arisen out of any aspect of the Property, its management or operations
prior to
(17)
19
Closing, Buyer shall hold harmless, indemnify and defend Seller, its
successors and assigns and their respective agents, employees, officers
and partners, from and against any and all Losses and Liabilities in
any way (i) related to the Property and arising or accruing during the
time that Buyer owns or has any interest in the Property; (ii) related
to or arising from any act, conduct, omission, contract or commitment
of Buyer at any time or times, including, without limitation, any claim
arising or occurring under any Lease or any Assumed Contract during the
time that Buyer owns or has any interest in the Property; or (iii)
resulting from any misrepresentation of Buyer or any inaccuracy in or
breach of any representation or warranty of Buyer or resulting from any
breach or default by Buyer under this Agreement.
(c) The provisions of Paragraph 12 shall survive Closing.
13. Risk of Loss. In the event any of the Property is damaged or
destroyed prior to the Closing Date, and such damage or destruction (a) is
fully covered by Seller's insurance, except for the deductible amounts and any
coinsurance contribution due from Seller thereunder, and the insurer agrees to
timely pay for the entire cost of such repair less such deductible and
coinsurance, and (b) would cost Two Hundred Thousand Dollars ($200,000.00) or
less to repair or restore, then this Agreement shall remain in full force and
effect and Buyer shall acquire the Property upon the terms and conditions set
forth herein. In such event, Buyer shall receive a credit against the Purchase
Price equal to such deductible and coinsurance amounts, and Seller shall assign
to Buyer all of Seller's right, title and interest in and to all proceeds of
insurance on account of such damage or destruction. In the event any of the
Property is damaged or destroyed prior to the Closing Date, and such damage or
destruction (c) is not fully covered by Seller's insurance, other than the
deductible and coinsurance amounts, and (d) would cost less than Two Hundred
Thousand Dollars ($200,000.00) to repair or restore, then the transaction
contemplated by this Agreement shall be consummated with Buyer receiving a
credit against the Purchase Price at the Closing in an amount reasonably
determined by Seller and Buyer (after consultation with unaffiliated experts)
to be the cost of repairing such damage or destruction, but in no event more
than Two Hundred Thousand Dollars ($200,000.00). In the event (e) any of the
Property is damaged or destroyed prior to the Closing and the cost of repair
would exceed Two Hundred Thousand Dollars ($200,000.00), or (f) if condemnation
proceedings are commenced against any of the Property, then, notwithstanding
anything to the contrary set forth in this Paragraph, Buyer shall have the
right, at its election, either to terminate this Agreement in its entirety, or
only as to that portion of the Property subject to condemnation proceedings (in
which case there shall be an equitable adjustment to the Purchase Price), or to
not terminate this Agreement and purchase the Property. Buyer shall have thirty
(30) days after Seller notifies Buyer that any portion of the Property is
subject to condemnation proceedings to make such election by delivery to Seller
of an election notice (the "Election Notice"). Buyer's failure to deliver the
Election Notice within such thirty (30) day period shall be deemed an election
to terminate this Agreement in its entirety. In the event this Agreement is
terminated in its entirety or in part pursuant to this Paragraph, by delivery
of notice of termination to Seller, Buyer and Seller shall each be released
from all obligations hereunder pertaining to that portion of the Property
affected by such termination. In the event Buyer elects not to terminate this
Agreement, Seller shall notify Buyer that Buyer shall receive a credit against
the Purchase Price at the Closing in the amount equal to the value agreed upon
by Buyer and Seller of any Property taken as a result of such proceeding, in
which case this Agreement shall otherwise remain in full force and effect, and
Seller shall be entitled to any condemnation
(18)
20
awards. Any repairs elected to be made by Seller pursuant to this Paragraph
shall be made within one hundred and eighty (180) days following such damage or
destruction and the Closing shall be extended until the repairs are
substantially completed. As used in this Paragraph, the cost to repair or
restore shall include the cost of lost rental revenue.
14. Possession. Possession of the Property shall be delivered to Buyer
on the Closing Date (subject to the rights of the tenants in possession under
Leases), provided, however, that prior to the Closing Date Seller shall afford
authorized representatives of Buyer reasonable access to the Property for
purposes of satisfying Buyer with respect to the representations, warranties
and covenants of Seller contained herein and with respect to satisfaction of
any Conditions Precedent to the Closing contained herein, including, without
limitation, a Phase I environmental investigation. In the event this Agreement
is terminated, Buyer shall restore the Property to substantially the condition
in which it was found. Buyer hereby agrees to indemnify and hold Seller
harmless from any damage or injury to persons or property caused by Buyer or
its authorized representatives during their entry and investigations prior to
the Closing. The indemnity contained in the preceding sentence shall survive
the termination of this Agreement or the Closing, as applicable, provided that
Buyer shall have no liability under such indemnity unless Seller gives Buyer
written notice of any claim it may have against Buyer under such indemnity
within twelve (12) months of such termination or the Closing Date, as
applicable.
15. Maintenance of the Property and Property Personnel. Between
Seller's execution of this Agreement and the Closing, Seller shall maintain the
Property in good order, condition and repair, reasonable wear and tear
excepted, shall perform all work required to be performed by the landlord under
the terms of any Lease, and shall make all repairs, maintenance and
replacements of the Improvements and any Tangible Personal Property and
otherwise operate the Property in the same manner as before the making of this
Agreement, as if Seller were retaining the Property. After full execution of
this Agreement and until the Closing, Seller shall maintain all existing
personnel on the Property, if any, in their current employment positions at
their current (or an increased) rate of compensation. Any changes in such
personnel, other than in the ordinary course of business which would not result
in a reduction in the level of management attention or service to the Property,
shall be subject to Buyer's reasonable approval.
16. Leasing; Buyer's Consent to New Contracts Affecting the Property;
Termination of Existing Contracts. Seller shall use commercially reasonable
efforts until Closing to lease any vacant space in the Improvements to tenants
pursuant to Space Leases in form and content acceptable to Buyer. Seller shall
not, after the date of Seller's execution of this Agreement, enter into any
Lease or contract affecting the Property, or any amendment thereof, or permit
any tenant to enter into any sublease, assignment or agreement pertaining to
the Property, or waive, compromise or settle any rights of Seller under any
contract or Lease, or agree to return any security deposit, or modify, amend,
or terminate any Assumed Contract, without in each case obtaining Buyer's prior
written consent thereto, which consent shall not be unreasonably withheld or
delayed (unless Seller's permission or consent is otherwise required in such
lease or related agreement or such lease or related agreement provides that
Seller is not to unreasonably withhold consent to such action, it being hereby
specifically agreed that Seller need not obtain Buyer's prior written consent
to any matter in which the lease or agreement provides that Seller's permission
or consent is not to be unreasonably
(19)
21
withheld, but Seller will provide prior written notice of any such required
action). Buyer shall be deemed to have disapproved any request for consent made
by Seller pursuant to this paragraph if Buyer fails to respond to Seller with
Buyer's approval or disapproval within five (5) business days of Seller's
request for Buyer's approval. Seller shall terminate prior to the Closing, at
no cost or expense to Buyer, any and all management agreements or contracts
affecting the Property that Purchaser requests be terminated.
17. Insurance. Through the Closing Date, Seller shall maintain or
cause to be maintained, at Seller's sole cost and expense:
(a) a policy or policies of insurance in amounts equal to the
full replacement value of the Improvements and the Tangible Personal
Property, insuring against all insurable risks, including, without
limitation, fire, vandalism, malicious mischief, lightning, windstorm,
water, earthquake and other perils customarily covered by casualty
insurance and the costs of demolition and debris removal; and
(b) a policy or policies of workers' compensation an
employers' liability insurance, commercial general liability
insurance, and automobile liability insurance, each in the amount and
form maintained by Seller prior to the date of this Agreement.
18. Cooperation with Buyer. Seller shall cooperate and do all acts
as may be reasonably required or requested by Buyer with regard to the
fulfillment of any Condition Precedent but Seller's representations and
warranties to Buyer shall not be affected or released by Buyer's waiver or
fulfillment of any Condition Precedent. Seller hereby irrevocably authorizes
Buyer and its agents to make all reasonable inquiries with and applications to
any third party, including any governmental authority, as Buyer may reasonably
require to complete its due diligence.
19. Brokers and Finders. Pursuant to separate agreement, Seller
shall pay CB Commercial Real Estate Group, Inc., Capital Leasing, Management &
Sales, and Wes Kirkham Properties, a brokerage commission for their services in
this transaction. Except as provided in the foregoing sentence, neither party
has had any contact or dealings regarding the Property, or any communication in
connection with the subject matter of this transaction, through any real estate
broker or other person who can claim a right to a commission or finder's fee in
connection with the sale contemplated herein. In the event that any other
broker or finder claims a commission or finder's fee based upon any contact,
dealings or communication, the party through whom the broker or finder makes
its claim shall be responsible for said commission or fee and all costs and
expenses (including reasonable attorneys' fees) incurred by the other party in
defending against the same. The party through whom any other broker or finder
makes a claim shall hold harmless, indemnify and defend the other party hereto,
its successors and assigns, agents, employees, officers, trustees, members and
retirants and the Property from and against any and all obligations,
liabilities, claims, demands, liens, encumbrances and losses (including
attorneys' fees), whether direct, contingent or consequential, arising out of,
based on, or incurred as a result of such claim. The provisions of this
Paragraph shall survive the Closing or termination of this Agreement.
(20)
22
20. INTENTIONALLY OMITTED.
21. Publicity and Confidentiality. The parties shall at all times
keep this transaction and any documents received from each other confidential,
except to the extent necessary to (a) comply with applicable law and
regulations, or (b) carry out the obligations set forth in this Agreement. Any
such disclosure to third parties shall indicate that the information is
confidential and should be so treated by the third party. No press release or
other public disclosure may be made by Seller or any of its agents concerning
this transaction without the prior written consent of Buyer.
22. Miscellaneous.
(a) Notices. Any notice, consent or approval required or
permitted to be given under this Agreement shall be in writing and
shall be deemed to have been given upon (i) hand delivery, (ii) one
(1) business day after being deposited with Federal Express or another
reliable overnight courier service or next day delivery, (iii) being
transmitted by facsimile telecopy, or (iv) two (2) business days after
being deposited in the United States mail, registered or certified
mail, postage prepaid, return receipt required, and addressed as
follows:
If to Seller: North Austin Office, Ltd.
------------
580 5th Avenue, Room 617
New York, New York 10036
Attn: Morris Friedman
Fax No.: 212-221-1834
Telephone No.: 800 225-5844
And a copy to: Dodd & Batla, A Professional Corporation
--------------
800 Brazos, Suite 1400
Austin, Texas 78701
Attn: D. Michael Dodd
Fax No.: 512-472-1522
Telephone No.: 512-472-1520
If to Seller: American Industrial Properties REIT
------------
6210 North Beltline, Suite 170
Irving, Texas 75063-2656
Attn: Mr. Lewis D. Friedland
Fax No.: (972) 550-6037
Telephone No.: (972) 550-6053
And a copy to: Liddell, Sapp, Zivley, Hill & LaBoon,
L.L.P.
2001 Ross Avenue, Suite 3000
Dallas, Texas 75201-8001
Attn: Brad B. Hawley
Fax No.: (214) 849-5599
Telephone No.: (214) 849-5588
or such other address as either party may from time to time specify in
writing to the other.
(21)
23
(b) Successors and Assigns. This Agreement shall be binding
upon, and inure to the benefit of, the parties hereto and their
respective successors, heirs, administrators and assigns. Neither
Buyer nor Seller shall assign its right, title and interest in and to
this Agreement without the other party's prior written consent unless
any such assignment is to an affiliate of Buyer or Seller, as the case
may be, in which event no such consent shall be required.
(c) Amendments. Except as otherwise provided herein, this
Agreement may be amended or modified only by a written instrument
executed by Seller and Buyer.
(d) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas.
(e) Merger of Prior Agreements. This Agreement and the
exhibits hereto constitute the entire agreement between the parties
and supersede all prior agreements and understandings between the
parties relating to the subject matter hereof, as the same may have
been amended, which shall be of no further force or effect upon
execution of this Agreement by Buyer and Seller.
(f) Enforcement. In the event a dispute arises concerning the
performance, meaning or interpretation of any provision of this
Agreement, the defaulting party or the party not prevailing in such
dispute shall pay any and all costs and expenses incurred by the other
party in enforcing or establishing its rights hereunder, including,
without limitation, court costs and attorneys' fees. In addition to
the foregoing award of attorneys' fees to the prevailing party, the
prevailing party in any lawsuit on this Agreement shall be entitled to
its attorneys' fees incurred in any post judgment proceedings to
collect or enforce the judgment. This provision is separate and
several and shall survive the merger of this Agreement into any
judgment on this Agreement.
(g) Time of the Essence. Time is of the essence of this
Agreement.
(h) Severability. If any provision of this Agreement, or the
application thereof to any person, place, or circumstance, shall be
held by a court of competent jurisdiction to be invalid, unenforceable
or void, the remainder of this Agreement and such provisions as
applied to other persons, places and circumstances shall remain in
full force and effect.
(i) Exhibits. All exhibits attached hereto are incorporated
herein as though fully set forth herein.
(22)
24
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
Buyer:
AMERICAN INDUSTRIAL PROPERTIES REIT
A Texas real estate investment trust
By: /s/ LEWIS D. FRIEDLAND
------------------------------------
Name: Lewis D. Friedland
----------------------------------
Title: Vice President
---------------------------------
Seller:
NORTH AUSTIN OFFICE, LTD.,
A Texas limited partnership
By: 9001 IH35, Inc.
A Texas corporation
Its General Partner
By: /s/ MORRIS FRIEDMAN
------------------------------------
Morris Friedman, President
Texas Professional Title, Inc. agrees to act as Escrow Holder and disburse
and/or apply the Earnest Money in accordance with the terms of this Agreement
and to comply with the terms and provisions of Paragraph 21 of this Agreement.
Texas Professional Title, Inc. agrees to comply with all reporting requirements
of Section 6045 of the United States Internal Revenue Code and the regulations
promulgated thereunder.
TEXAS PROFESSIONAL TITLE, INC.
By: /s/ JEANINE M. WEST
------------------------------------
Its: Sr. Vice President
-----------------------------------
Dated: February 19, 1998
---------------------------------
(23)
25
LIST OF EXHIBITS
Exhibit A - Description of Land
Exhibit B - Inventory of Tangible Personal
Property
Exhibit C - Deed
Exhibit D - Bill of Sale
Exhibit E - Assignment and Assumption of
Intangible Property
Exhibit F - Assignment of Leases
Exhibit G - Surveyor's Certificate
Exhibit H - Environmental Reports
Exhibit I - Rent Roll
Exhibit J - Notice of Lease Assignment
Exhibit K - Transferor's Certification of
Non-Foreign Status
Exhibit L - Tenant Certificate
(24)
26
EXHIBIT A
REAL PROPERTY
Lot One (1), RESUBDIVISION OF LOT 1, GREENWAY PLAZA SECTION ONE, a
subdivision in Travis County, Texas, according to the map or plat
thereof, recorded in Volume 93, Page 300, Plat Records of Travis
County, Texas
27
EXHIBIT B
PERSONAL PROPERTY INVENTORY
28
EXHIBIT C
SPECIAL WARRANTY DEED
RECORDING REQUESTED BY:
WHEN RECORDED MAIL TO:
- -----------------------------
- -----------------------------
- -----------------------------
- -----------------------------
- -----------------------------
MAIL TAX STATEMENT TO:
American Industrial Properties REIT
6210 North Beltline Road
Suite 170
Irving, Texas 75063-2656
Attn: Mr. Marc Simpson
- ------------------------------------------------------------------------------
(Space Above Line for Reorder's Use Only)
SPECIAL WARRANTY DEED
THE STATE OF TEXAS )
) KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF TRAVIS )
NORTH AUSTIN OFFICE, LTD., a Texas limited partnership ("Grantor"),
and for and in consideration of the sum of Ten Dollars ($10.00) and other good
and valuable consideration to it in hand paid by AMERICAN INDUSTRIAL PROPERTIES
REIT, a Texas real estate investment trust ("Grantee"), whose address is 6210
North Beltline Road, Suite 170, Irving, Texas 75063-2656 the receipt and
sufficiency of which is hereby acknowledged and confessed, has GRANTED,
BARGAINED, SOLD, ASSIGNED and CONVEYED, and by these presents does GRANT,
BARGAIN, SELL, ASSIGN and CONVEY, unto Grantee:
(A) that certain real property located in Austin, Travis County,
Texas, and being more particularly described in Exhibit A
attached hereto and incorporated herein for all purposes (the
"Land");
(B) all rights, privileges and easements appurtenant to the Land,
including, without limitation, all minerals, oil, gas and
other hydrocarbon substances on and under and
29
that may be produced from the Land, as well as 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");
(C) All improvements and fixtures located on the Land and
Appurtenances, including, without limitation, that certain
office building and related improvements located on the Land,
and 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") (the Land, Appurtenances and Improvements
being herein collectively called the "Property").
TO HAVE AND TO HOLD the Property, together with all and singular any
other rights and appurtenances thereto in anywise belonging, unto Grantee, its
legal representatives, successors and assigns, FOREVER, subject to those
restrictions and encumbrances listed on Exhibit B, attached hereto and
incorporated herein by reference for all purposes, to the extent (but no
further) that same are valid and subsisting as of the date hereof and affect
title to the Property (collectively, the "Encumbrances"); and Grantor does
hereby bind itself, its legal representatives, successors and assigns, to
WARRANT AND FOREVER DEFEND all and singular the Property unto Grantee, its
legal representatives, successors and assigns, against every person whomsoever
lawfully claiming or to claim the same or any part thereof subject, however, to
the Encumbrances, when the claim is by, through or under Grantor but not
otherwise.
Ad valorem taxes and assessments and maintenance fees, if any, for the
year 1998 have been prorated between Grantor and Grantee as of the date hereof,
and Grantee assumes the obligations to pay same as they become due and payable
subsequent to the date hereof. Grantor warrants and represents that all ad
valorem taxes and assessments and all maintenance fees for the Conveyed
Property for 1997 and all prior years have been fully paid and all such taxes
and assessments have been assessed and paid on the full assessed value without
any abatement, exemption, or credit for special uses, agricultural use, or
other land use which would create an additional tax obligation upon the
conveyance to Grantee or upon the lapse of time. All such taxes and assessments
for each year prior to the current year and for the current year to the date
hereof shall be paid by Grantor. If the proration as of the date hereof is
based upon an estimate of ad valorem taxes and assessments and maintenance fees
for the current year, then upon demand by either party hereto, the parties
shall, if necessary, promptly and equitably adjust all such ad valorem taxes
and assessments and maintenance fees as soon as reasonably practical after the
date actual figures for such items for the current year are available.
30
IN TESTIMONY WHEREOF, this instrument is executed effective as of the
____ day of ___________________, 199__.
NORTH AUSTIN OFFICE, LTD.,
A Texas limited partnership
By: 9001 IH35, Inc.
A Texas corporation
Its General Partner
By:
----------------------------
Morris Friedman, President
Exhibit A - Land
Exhibit B - Encumbrances
STATE OF ___________ )
)
COUNTY OF _________ )
This instrument was acknowledged before me on , 199__, by MORRIS
FRIEDMAN, President of 9001 IH35, INC., a Texas Corporation, on behalf of said
corporation as General Partner of NORTH AUSTIN OFFICE, LTD., a Texas limited
partnership, on behalf of said limited partnership.
---------------------------------------
Notary Public in and for
the State of __________
My Commission Expires:
---------------------------------------
Exhibit A - Land
Exhibit B - Existing Encumbrances
31
EXHIBIT A to Exhibit C
LEGAL DESCRIPTION
32
EXHIBIT B to EXHIBIT C
ENCUMBRANCES
33
EXHIBIT D
BILL OF SALE
FOR VALUE RECEIVED, the undersigned ("Seller") hereby sells, conveys
and assigns to AMERICAN INDUSTRIAL PROPERTIES REIT, a Texas real estate
investment trust ("Buyer"), all of the undersigned's right, title and interest
in and to all equipment, fixtures, inventory and other tangible personal
property of any kind and nature owned by Grantor and attached to or located on
the real property described on Exhibit A attached hereto ("Real Property"),
including without limitation all furniture, furnishings, floor coverings;
office equipment and supplies; heating, lighting, refrigeration, plumbing,
ventilating, incinerating, cooking, laundry, communication, electrical, air
conditioning fixtures, systems and equipment; disposals; window screens; storm
windows; sprinklers; hoses; tools; lawn equipment; elevators and escalators;
compressors; engines; boilers, and all other related machinery, equipment,
fixtures, supplies, replacement parts and other tangible personal property
whatsoever, including, without limitation, the personal property described in
Schedule 1 which is attached hereto and incorporated herein.
TO HAVE AND TO HOLD the foregoing personal property unto Buyer and its
successors and assigns forever.
The undersigned warrants that it owns good and marketable title to the
foregoing personal property and will defend title to said personal property
against all persons claiming a prior right thereto to the extent that such
prior right is alleged to exist on or before the date of this Bill of Sale.
Said personal property is used in connection with that certain office
building commonly known as WHITNEY JORDAN PLAZA in Austin, Travis County,
Texas.
IN WITNESS WHEREOF, the undersigned has executed this Bill of Sale on
this ____ day of ________________, 19__, in .
NORTH AUSTIN OFFICE, LTD.,
A Texas limited partnership
By: 9001 IH35, Inc.
A Texas corporation
Its General Partner
By:
---------------------------
Morris Friedman, President
34
Schedule 1
PERSONAL PROPERTY
35
EXHIBIT E
ASSIGNMENT AND ASSUMPTION OF
SERVICE CONTRACTS, WARRANTIES,
GUARANTIES, PERMITS AND OTHER INTANGIBLE PROPERTY
THIS ASSIGNMENT AND ASSUMPTION OF SERVICE CONTRACTS,
WARRANTIES, GUARANTIES AND OTHER INTANGIBLE PROPERTY (this "Assignment")
is made and entered into as of the ____ day of , 199__, by NORTH AUSTIN OFFICE,
LTD., a Texas limited partnership ("Assignor"), to AMERICAN INDUSTRIAL
PROPERTIES REIT, a Texas real estate investment trust ("Assignee").
WITNESSETH:
WHEREAS, Assignor is contemporaneously herewith selling
pursuant to that certain Purchase and Sale Agreement dated , 1998, by and
between Assignor and Assignee (the "Purchase Agreement") that certain real
property and improvements thereon located in the City of Austin, County of
Travis, State of Texas, the real property which is more particularly described
on Schedule 1 attached hereto and incorporated herein by this reference ("Real
Property"). Terms used in this Agreement and not otherwise defined shall be
given the meanings defined in the Purchase Agreement.
WHEREAS, except for the Names and Marks as hereafter provided for,
Assignor desires to assign its interest in and to the following to Assignee as
of the date on which title to the Real Property is vested in Assignee (the
"Transfer Date"), and Assignee desires to accept the assignment thereof and
assume Assignor's obligations thereunder from and after the Transfer Date:
(a) All service contracts described in Schedule 2 attached
hereto and incorporated herein by this reference (the "Contracts");
(b) All Warranties and Guaranties (the "Warranties and
Guaranties", hereafter defined);
(c) All Names and Marks (the "Names and Marks", hereafter
defined);
(d) All Intangible Property (the "Intangible Property",
hereafter defined); and
(e) All Permits (the "Permits", hereafter defined).
NOW, THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
36
1. As of the Transfer Date, Assignor hereby assigns and transfers
unto Assignee all of its right, title, claim and interest in, to and under the
(a) Contracts; (b) Warranties and Guarantees; (c) Names and Marks; (d)
Intangible Property and (e) Permits (collectively the "Assigned Interests").
Assignor hereby agrees to indemnify, defend and hold harmless Assignee from and
against any and all cost, liability, loss, damage or expense, including,
without limitation, reasonable attorneys' fees and expenses (collectively,
"Losses and Liabilities"), which arise out of or are in any way related to the
Assigned Interests after the Transfer Date caused by a material default
thereunder by Assignor occurring or existing on or prior to the Transfer Date.
2. Assignee, as of the Transfer Date, hereby accepts the
foregoing assignment and assumes all of the Assignor's obligations under the
Assigned Interests which arise or relate to the period after the Transfer Date.
Assignee hereby agrees to indemnify, defend and hold harmless Assignor from and
against any and all Losses and Liabilities arising out of or in any way related
to the Assigned Interests after the Transfer Date, except for Losses and
Liabilities which arise out of or are in any way related to the Assigned
Interests after the Transfer Date caused by a material default thereunder by
Assignor occurring or existing on or prior to the Transfer Date.
3. The following terms shall have the following meanings:
(a) The term "Warranties and Guaranties" as used herein shall
mean and include all warranties and guarantees to the extent
assignable, whether or not written, for all or any portion of the
Property, including, without limitation, the Improvements and the
tangible Personal Property, including, without limitation,
construction warranties from contractors and subcontractors.
(b) The term "Names and Marks" as used herein shall mean the
name "Whitney Jordan Plaza." Notwithstanding anything herein or in any
other agreement to the contrary, Assignee is acquiring merely the
right to continue to use the name "Whitney Jordan Plaza" as the name
of the office building now located at 9001 IH35, Austin, Travis
County, Texas. In the event Assignee ever ceases using the name
"Whitney Jordan Plaza" for such purpose, Assignee's right to use said
name shall terminate. In this regard, Assignee acknowledges and agrees
that the name "Whitney Jordan" is a name used by Assignor in its
businesses and Assignor is not selling, assigning, granting or
conveying ownership of said name.
(c) The term "Intangible Property" as used herein shall mean
and include all intangible property owned by Asssignor and used in
connection with the Property, including without limitation, all of the
Real Property which is held or deemed to constitute intangible
personal property; to the extent assignable, all plans and
specifications, working drawings, site elevation and as-built surveys,
soil and substrata studies, architectural plans, engineering plans and
studies, floor plans, landscape plans, appraisals, and other technical
reports of any kind, character or description; to the extent
assignable, all promotional material, market studies, tenant data and
other related material of any kind; all claims, demands or causes of
action, including without limitation, any arising out of or relating
to or caused by any defects in design or construction; all rights
under any restrictive or protective covenants or declarations or other
matters affecting title to any of the property herein conveyed.
37
(d) The term "Permits" as used herein shall mean and include
all environmental, air pollution control, waste water, building,
occupancy, governmental permits and approvals of every kind and nature
relating to the construction, operation, use or occupancy of the
Property.
4. In the event of any litigation between Assignor and Assignee
arising out of the obligations of the parties under this Assignment or
concerning the meaning or interpretation of any provision contained herein, the
losing party shall pay the prevailing party's costs and expenses of such
litigation, including, without limitation, reasonable attorneys' fees and
expenses. In addition to the foregoing award of attorneys' fees to the
prevailing party, the prevailing party in any lawsuit on this Agreement shall
be entitled to its reasonable attorneys' fees incurred in any post judgment
proceedings to collect or enforce the judgment. This provision is separate and
several and shall survive the merger of this Assignment into any judgment on
this Assignment.
5. This Assignment shall be binding on and inure to the benefit
of the parties herein, their heirs, executors, administrators,
successors-in-interest and assigns.
6. This Assignment shall be governed by and construed in
accordance with the laws of the State of Texas.
7. This Assignment may be executed in any number of counterparts,
each of which shall be deemed an original and all of which taken together shall
constitute one and the same agreement.
8. Nothing contained herein shall be deemed or construed as
relieving the Assignor or Assignee of their respective duties and obligations
under the Purchase Agreement.
ASSIGNOR: NORTH AUSTIN OFFICE, LTD.,
A Texas limited partnership
By: 9001 IH35, Inc.
A Texas corporation
Its General Partner
By:
---------------------------
Morris Friedman, President
ASSIGNEE: AMERICAN INDUSTRIAL PROPERTIES REIT
A Texas real estate investment trust
By:
---------------------------
---------------------------
(Print Name and Title)
38
Schedule 1
LEGAL DESCRIPTION OF REAL PROPERTY
39
Schedule 2
DESCRIPTION OF THE CONTRACTS
40
EXHIBIT F
ASSIGNMENT AND ASSUMPTION OF LEASES
THIS ASSIGNMENT AND ASSUMPTION OF LEASES (this "Assignment") dated as
of the day of ___________________, 199__, is made and entered into by and
between NORTH AUSTIN OFFICE, LTD., a Texas limited partnership ("Assignor"),
and AMERICAN INDUSTRIAL PROPERTIES REIT, a Texas real estate investment trust
("Assignee").
WITNESSETH:
WHEREAS, Assignor is the lessor under certain leases executed with
respect to that certain real property located in the City of Austin, County of
Travis, State of Texas, incorporated herein by this reference (the "Property")
more particularly described on Schedule 1, attached hereto and incorporated
herein by this reference, which leases are described in Schedule 2 attached
hereto and incorporated herein by this reference (the "Leases").
WHEREAS, Assignor is contemporaneously herewith selling the Property
to Assignee pursuant to that certain Purchase and Sale Agreement dated
______________, 199__, by and between Assignor and Assignee (the "Purchase
Agreement").
WHEREAS, Assignor desires to assign its interest in and to the Leases
to Assignee as of the date on which title to the Property is vested in Assignee
(the "Transfer Date"), and Assignee desires to accept the assignment thereof
and assume Assignor's obligations thereunder from and after the Transfer Date.
NOW, THEREFORE, in consideration of the covenants and agreements
contained herein, the parties hereby agree as follows:
1. As of the Transfer Date, Assignor hereby assigns to Assignee all of
its right, title and interest in and to the Leases. On the Transfer Date,
Assignor has transferred those security deposits in the amounts and under the
Leases listed on Schedule 3 attached hereto to Assignee (the "Transferred
Security Deposits").
2. Assignor warrants and represents that as of the Transfer Date, the
attached Schedule 2 includes all of the Leases affecting the Property and there
are no assignments of or agreements to assign the Leases to any other party.
3. Assignor hereby agrees to indemnify, defend and hold harmless
Assignee from and against any and all cost, liability, loss, damage or expense,
including, without limitation, reasonable attorneys' fees and expenses
(collectively, "Losses and Liabilities"), caused by a material default by
Assignor under the Leases described in Schedule 2 occurring prior to or on the
Transfer Date.
4. Assignee, as of the Transfer Date, hereby accepts the foregoing
assignment and assumes all of the lessor's obligations under the Leases
described in Schedule 2 relating to the period from and after the Transfer
Date, including the obligation to return the Transferred Security Deposits
41
in accordance with the terms of the Leases. Assignee hereby agrees to
indemnify, defend and hold harmless Assignor from and against any and all
Losses and Liabilities arising out of Lessor's obligations under the Leases
described in Schedule 2 and related to the period after the Transfer Date,
except for Losses and Liabilities caused by a material default by Assignor
under the Leases described in Schedule 2 occurring prior to or on the Transfer
Date.
5. In the event of any litigation between Assignor and Assignee
arising out of the obligations of the parties under this Assignment or
concerning the meaning or interpretation of any provision contained herein, the
losing party shall pay the prevailing party's costs and expenses in such
litigation, including, without limitation, reasonable attorneys' fees and
expenses. In addition to the foregoing award of attorneys' fees to the
prevailing party, the prevailing party in any lawsuit on this Agreement shall
be entitled to its reasonable attorneys' fees incurred in any post judgment
proceedings to collect or enforce the judgment. This provision is separate and
several and shall survive the merger of this Assignment into any judgment on
this Assignment.
6. This Assignment shall be binding on and inure to the benefit of the
parties herein, their heirs, executors, administrators, successors-in-interest
and assigns.
7. This Assignment may be executed in any number of counterparts, each
of which shall be deemed an original and all of which taken together shall
constitute one and the same agreement.
8. Nothing contained herein shall be deemed or construed as relieving
the Assignor or Assignee of their respective duties and obligations under the
Purchase Agreement.
IN WITNESS WHEREOF, Assignor and Assignee have executed this
Assignment the date and year first above written.
ASSIGNOR: NORTH AUSTIN OFFICE. LTD.
A Texas limited partnership
By: 9001 IH35, Inc.
A Texas corporation
Its General Partner
By:
-----------------------
Morris Friedman, President
ASSIGNEE: AMERICAN INDUSTRIAL PROPERTIES REIT
A Texas real estate investment trust
By:
--------------------------------
Name:
------------------------------
Title:
----------------------------
42
Schedule 1
LEGAL DESCRIPTION OF REAL PROPERTY
43
Schedule 2
DESCRIPTION OF THE LEASES
44
Schedule 3
TRANSFERRED SECURITY DEPOSITS
45
EXHIBIT G
SURVEYOR'S CERTIFICATE
I hereby certify that on the ____ day of ________________, 199__:
(a) this survey was made on the ground as per the field notes
shown on this survey and correctly shows (i) the boundaries and areas
of the subject property and the size, location and type of buildings
and improvements thereon (if any) and the distance therefrom to the
nearest facing exterior property lines of the subject property (ii)
the location of all rights-of-way, easements and any other matters of
record (or of which are visible or of which I have knowledge or have
been advised, whether or not of record) affecting the subject property
including, without limitation, those described on the Commitment);
(iii) the location of the parking areas on the subject property
showing the number of parking spaces provided thereby; (iv) all
abutting dedicated public streets providing access to the subject
property together with the width and name thereof; and (v) all other
significant items on the subject property;
(b) except as shown on the survey, there are no (i)
encroachments upon the subject property by improvements on adjacent
property; (ii) encroachments on adjacent property, streets or alleys
by any improvements on the subject property; (iii) party walls, or
(iv) conflicts or protrusions;
(c) adequate ingress to and egress from the subject property
is provided by (name of street), the same being paved, dedicated
public right(s)-of-way maintained by (name of maintaining authority);
(d) all required building setback lines on the subject
property are located as shown hereon;
(e) no part of the subject property lies within a flood plain
or flood prone area or flood way of any body of water;
(f) this survey conforms to the current Texas Society of
Professional Surveyors Standards and Specifications for a Category 1
A, Condition II Survey;
(g) I have reviewed the latest available maps of geological
faults in the Austin metropolitan area prepared by the U.S. Department
of the Interior, U.S. Geological Survey, and have located the subject
property on the map titled " " and dated ___________________. None of
the geological fault lines shown on that map affects the subject
property, and I saw no evidence of any displacement of the surface or
other evidence of the existence of an active geological fault on or
affecting the property.
(h) The description of the property shown hereon corresponds
to the boundaries of the property shown on the Title Commitment, and
such description closes by engineering calculation.
46
(i) No covenants, restriction or easements that are of
records, discoverable upon visual inspection, or otherwise known to
me, appear to me to have been violated in any respect except as
follows: ___________________________ (if none, so state).
------------------------------------------
(Signature of Surveyor)
Registered Public Surveyor
Registration No.
--------------------------
(Name, address, telephone number and job
number of Surveyor)
47
EXHIBIT H
ENVIRONMENTAL REPORTS
1. Phase I (MBA) Environmental Study for 9001 IH 35, Austin,
Texas dated April 8, 1993, prepared by Maxwell Envirotech,
Inc.
2. Reports referenced in that certain correspondence (including
Statement of Certification) dated November 15, 1994
pertaining to Project No. 093-01 regarding asbestos
abatement, from Maxwell Envirotech, Inc., which reports
include the following:
a. ACBM (Asbestos Containing Building Material)
inspection reports prepared by Hall-Kimbrell, Inc.
and Maxwell Envirotech, Inc.
b. The Final Inspection and Final Clearance Air
Monitoring (Building interior 9/14/94, exterior
soffits 10/7/94)
48
EXHIBIT I
RENT ROLL
49
EXHIBIT J
NOTICE OF LEASE ASSIGNMENT
________________, 199___
To: [Tenant]
---------------------------
---------------------------
---------------------------
---------------------------
Re: [Property name][Property address]
Gentlemen:
Please be advised that the undersigned Seller, as Landlord under your
Lease at the above location (as said Lease may have been amended, the "Lease")
has transferred and conveyed all of its interest in the lease to American
Industrial Properties REIT ("Buyer") effective as of the date hereof, and Buyer
has assumed the obligations of the Landlord under the Lease. Therefore,
effective immediately, all correspondence, communications and rent and/or other
charges due under the Lease (including past rent due, if any) should be
directed as follows:
American Industrial Properties REIT
-----------------------------------
-----------------------------------
-----------------------------------
-----------------------------------
Attn:
------------------------------
Phone:
-----------------------------
Your security deposit in connection with the Lease in the amount of
$____________ has been transferred to the Buyer. Buyer acknowledges receipt of
the deposit and responsibility for the return of any such security deposit
subject to the terms of the Lease.
SELLER: BUYER:
- ---------------------------- AMERICAN INDUSTRIAL PROPERTIES
a REIT
---------------------------
By:
-----------------------------
By: Name:
------------------------------- ---------------------------
Name: Title:
----------------------------- --------------------------
Title:
----------------------------
50
EXHIBIT K
TRANSFEROR'S CERTIFICATION OF NON-FOREIGN STATUS
To inform _____________________________________, a ___________________
("Transferee"), that withholding of tax under Section 1445 of the Internal
Revenue Code of 1954, as amended ("Code"), will not be required upon the
transfer of certain real property to the Transferee by
__________________________________________, a _____________________
("Transferor"), the undersigned hereby certifies the following on behalf of the
Transferor:
1. The Transferor is not a foreign corporation, foreign partnership, foreign
trust, foreign estate or foreign person (as those terms are defined in the Code
and the Income Tax Regulations promulgated thereunder);
2. The Transferor's U.S. employer or tax (social security)
identification number is
------------------------------;
3. The Transferor understands that this Certification may be disclosed
to the Internal Revenue Service by the Transferee and that any false statement
contained herein could be punished by fine, imprisonment, or both.
4. The Transferor understands that the Transferee is relying on this
Certification in determining whether withholding is required upon said
transfer.
5. The Transferor hereby agrees to indemnify, defend and hold the
Transferee harmless from and against any and all obligations, liabilities,
claims, losses, actions, causes of action, rights, demands, damages, costs and
expenses of every kind, nature or character whatsoever (including, without
limitation, reasonable attorneys' fees and court costs) incurred by the
Transferee as a result of: (i) the Transferor's failure to pay U.S. Federal
income tax which the Transferor is required to pay under applicable U.S. law;
or (ii) any false or misleading statement contained herein.
6. Under penalty of perjury I declare that I have examined this
Certification and to the best of my knowledge and belief it is true and correct
and complete, and I further declare that I have authority to sign this document
on behalf of the Transferor.
Date: , 199
----------- ---
----------------------------------------
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
51
EXHIBIT L
TENANT CERTIFICATE
American Industrial Properties REIT
6210 North Beltline, Suite 170
Irving, Texas 75063-2656
"Buyer"
- ------------------------------
- ------------------------------
- ------------------------------
- ------------------------------
"Landlord"
Ladies and Gentlemen:
Landlord, as owner of the property (the "Property") of which the
leased premises are a part, intends to sell the Property to American Industrial
Properties REIT or an affiliate thereof ("Buyer") who, as a condition to the
purchase of the Property and to satisfy the requirements of Lender, has
required this Tenant Certificate.
Buyer is about to make, execute and deliver its Promissory Note
("Note") to a financial institution ("Lender") which Note shall be secured by,
among other security, a lien encumbering the Property pursuant to a Deed of
Trust, Security Agreement and Assignment of Leases and Rents (as thereafter
amended and modified, the "Mortgage"). The Mortgage and all other instruments
securing the Note are herein collectively called the "Security Documents".
In consideration of Buyer's agreement to purchase the Property, Tenant
agrees and certifies to Landlord, Buyer and Lender as follows:
ACKNOWLEDGMENT OF LEASE
1. Tenant is the tenant under that certain lease dated (the "Lease"),
the undersigned ("Tenant") has leased from Landlord, or its predecessors in
interest the leased premises consisting of _______ net rentable square feet
located at as more particularly described in the Lease. A true and correct copy
of the Lease together with all amendments, modifications and/or renewals is
attached as Exhibit "A".
2. The leased premises and possession thereof are accepted and Tenant
is in actual occupancy of the leased
premises; the lease is in full force and effect; the term of the Lease commenced
as of _____________________________ and ______________________________________
the expiration date of the Lease is _______________________________________.
3. Rental at the rate provided by the Lease is payable in accordance
with its terms, all minimum rent and additional rent have been paid through and
is not paid and will not be paid more than one month in advance of the due date
set forth in the Lease. Minimum monthly base rent of $ plus monthly estimated
operating expenses of $__________ (with the tenant responsible for taxes,
insurance and common area operating expenses in excess of $__________) are due
on the of each month.
4. Landlord is holding a security deposit in the amount of $_________
as of the date hereof. Tenant is not entitled to any interest on the security
deposit except as follows:__________________________________________.
5. Tenant claims no present charge, lien or claim of offset against
rent.
6. Tenant has no option to extend the lease except as follows: _______
______________________________________________________________________________.
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7. Tenant has not subleased nor assigned all or any portion of the
Leased premises, except as follows: ________________________________________.
8. Tenant is not in default in the performance of any covenant,
agreement or condition contained in the Lease and no circumstances exist which,
with the passage of time, would result in Tenant being in default in the
performance of any covenant, agreement or condition contained in the Lease.
9. To the best of Tenant's knowledge, its use, maintenance and
operation of the leased premises complies with, and will at all times comply
with, all applicable federal, state, county or local statutes, laws, rules and
regulations of any governmental authorities relating to environmental, health
or safety matters. Except for de minimis quantities that are used in connection
with the ordinary course of Tenant's business, and then only in strict
compliance with all applicable laws, rules and regulations, Tenant does not and
will not engage in any activity, which would involve the use of the leased
premises for the storage, generation, use, treatment, transportation or
disposal of any chemical, material or substance which is regulated as toxic or
hazardous or exposure to which is prohibited, limited or regulated by any
federal, state, county, regional, local or other governmental authority or
which, even if not so regulated, may or could pose a hazard to the health and
safety of the other tenants and occupants of Landlord's property.
10. Tenant does not have any rights or options to purchase the
Property.
11. Tenant's interest in the Lease is not subject to any mortgage,
liens or other encumbrances except as follows: _______________________________.
12. There are no existing defaults under the Lease by reason of any
act or omission of the Landlord and no circumstances exist which, with the
passage of time, would place Landlord in default under the Lease, except as
follows: ____________________________________________________________________.
13. There are no outstanding unsatisfied obligations of Landlord under
the Lease except as follows: _________________________________________________.
14. The following is (are) guarantor(s) or Tenant's obligations under
the lease: __________________________________________________________________,
and [its] [his] [her] [their] current address(es) [is] [are] as follows: ______
_______________________________________________________________________________
_______________________________________________________________________________
SUBORDINATION
The Lease and all right, title and interest in the Property created
thereby (including without limitation any purchase options, rights of first
refusal, lease renewal rights, etc.) are, shall be and shall at all times
remain and continue to be subject and subordinate in all respects to the liens,
terms, covenants, provisions and conditions of the Security Documents.
NON-DISTURBANCE
So long as the Lease is in full force and effect and Tenant is not in
default under the Lease (beyond any period given to Tenant in the Lease to cure
such default) or under this Agreement:
(a) Tenant's possession of the Property and Tenant's rights
and privileges under the Lease shall not be diminished or interfered
with by Lender, and Tenant's occupancy of the Premises shall not be
disturbed by Lender for any reason whatsoever during the term of the
Lease or any extensions or renewals thereof; and
(b) Lender will not join Tenant as a party defendant in any
action or proceeding to foreclose the Mortgage or to enforce any
rights or remedies of Lender under the Mortgage which would cut-off,
destroy, terminate or extinguish the Lease or Tenant's interest and
estate under the Lease.
Notwithstanding the foregoing provisions of the paragraph, if it would be
procedurally disadvantageous for Lender not to name or join Tenant as a party
in a foreclosure proceeding with respect to the Mortgage, Lender may so name or
join Tenant without in any way diminishing or otherwise affecting the rights
and privileges granted to, or inuring to the benefits of, Tenant under this
Agreement.
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ATTORNMENT
(a) After notice is given by Lender that a default has
occurred under the Mortgage and that the rentals and all other
payments to be made by Tenant under the Lease should be paid to
Lender, Tenant will attorn to Lender and pay to Lender, or in
accordance with the directions of Lender, all rentals and other monies
due and to become due to Current Landlord (as hereinafter defined)
under the Lease or otherwise in respect to the Property, such payments
will be made regardless of any right of set-off, counterclaim or other
defense which Tenant may have against Current Landlord, whether as
tenant under the Lease or otherwise; and
(b) in addition, if Lender (or its nominee or designee) shall
succeed to the rights of Current Landlord under the Lease through
possession or foreclosure action, delivery of a deed or otherwise or
another person purchases the Property upon or following foreclosure of
the Mortgage, then at the request of Lender (or its nominee or
designee) or such purchaser (Lender, its nominees and designees, and
such purchaser, each being a "Successor-Landlord"), Tenant shall
attorn to and recognize Successor-Landlord as Tenant's landlord under
the Lease and shall promptly execute and deliver any instrument that
Successor-Landlord may reasonably request to evidence such attornment.
Upon such attornment, the lease shall continue in full force and
effect as, or as if it were, a direct lease between Successor-Landlord
and Tenant upon all terms, conditions and covenants as are set forth
in the Lease, except that Successor-Landlord shall not:
i) be liable for any previous act or omission of
Current Landlord under the Lease;
ii) be subject to any off-set, defense or
counterclaim which shall have previously accrued to Tenant
against Current Landlord;
iii) be bound by any modification of the Lease or by
any previous prepayment of rent or additional rent for more
than one month which Tenant might have paid to Current
Landlord, unless such modification or prepayment shall have
been expressly approved in writing by Lender; or
iv) be liable for any security deposited under the
Lease unless such security has been physically delivered to
Lender.
LEASE MODIFICATION
Tenant agrees that without the prior written consent of Lender, it
shall not: (a) amend, modify, terminate or cancel the Lease or any extensions
or renewals thereof; (b) tender a surrender of the Lease or make a prepayment
of any rent or additional rent in excess of one (1) month; or (c) subordinate
or permit the subordination of the Lease to any lien subordinate to the
Mortgage. Any such purported action without such consent shall be void as
against the holder of the Mortgage.
NOTICE OF DEFAULT; OPPORTUNITY TO CURE
a) Any notice required or permitted to be given by Tenant to
Current Landlord shall be simultaneously given also to Lender, and any right of
Tenant dependent upon notice shall take effect only after such notice to Lender
is so given. Performance by Lender shall satisfy any conditions of the Lease
requiring performance by Current Landlord, and Lender shall have a reasonable
time to complete such performance as provided in section (b) below.
b) Without limiting the generality of the foregoing, Tenant
shall promptly notify Lender of any default, act or omission of Current
Landlord which would give Tenant the right, immediately or after the lapse of a
period of time, to cancel or terminate the Lease or to claim a partial or total
eviction (a "Landlord Default"). In the event of a Landlord Default, Tenant
shall not exercise any rights available to it: (i) until it has given written
notice of such Landlord Default to Lender; and (ii) unless Lender has failed,
within thirty (30) days after Lender receives such notice, to cure or remedy
the Landlord Default or, if the same is not reasonably capable of being
remedied by Lender within such thirty (30) day period, until a reasonable
period for remedying such Landlord Default has elapsed following the giving of
such notice and following the time when Lender shall have become entitled under
the Security Documents to remedy the same (which reasonable period shall in no
event be less than the period to which Current Landlord would be entitled under
the Lease or otherwise, after similar notice, to effect such remedy); provided
that Lender shall with due diligence commence and prosecute a remedy for such
Landlord Default. If Lender cannot reasonably remedy a Landlord Default until
after Lender obtains possession of the Property, Tenant may not terminate or
cancel the Lease or claim a partial or total eviction by reason of such
Landlord Default until the expiration of a reasonable period necessary for the
remedy after Lender institutes proceedings to obtain possession of the Property
through a foreclosure or otherwise, or for the appointment of a receiver for
the Property,
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provided that Lender institutes and prosecutes such proceedings with due
diligence. Lender shall have no obligation hereunder to remedy any Landlord
Default.
NOTICE OF LIEN
To the extent that the Lease entitles Tenant to notice of the
existence of any mortgage and the identity of any lender, this Agreement shall
constitute such notice to Tenant with respect to the Mortgage.
REMEDIES
Upon and after the occurrence of a default under the Mortgage, Lender
shall be entitled, but not obligated, to exercise the claims, rights, powers,
privileges and remedies of Current Landlord under the Lease and shall be
further entitled to the benefits of, and to receive and enforce performance of,
all of the covenants to be performed by Tenant under the Lease as though Lender
were named therein as Current Landlord.
LIMITATION OF LIABILITY
Except as specifically provided in this Agreement, Lender shall not,
by virtue of this Agreement, the Mortgage or any other instrument to which
Lender may be a party, be or become subject to any liability or obligation to
Tenant under the Lease or otherwise.
PRIORITY
(a) Tenant acknowledges and agrees that this Agreement
supersedes (but only to the extent inconsistent with) any provisions of the
Lease relating to the priority or subordination of the Lease and the interests
or estates created thereby to the Mortgage.
(b) Tenant agrees to enter into a subordination,
non-disturbance and attornment agreement with any entity which shall succeed
Lender with respect to the Property, or any portion thereof, provided such
agreement is substantially similar to this Agreement.
NOTICES
Any notice, consent, request or other communication required or
permitted to be given hereunder shall be in writing and shall be: (a)
personally delivered; (b) delivered by Federal Express or other comparable
overnight delivery service; or (c) transmitted by postage prepaid registered or
certified mail, return receipt requested. All such notices, consents, requests
or other communications shall be addressed to Tenant or Lender at the address
for such party previously set forth in this Agreement, or to such other address
as Tenant or Lender shall in like manner designate in writing. All notices and
other communications shall be deemed to have been duly given on the first to
occur of actual receipt of the same or; (i) the date of delivery if personally
delivered; (ii) one (1) business day after depositing the same with the
delivery service if by overnight delivery service; and (iii) three (3) days
following posting if transmitted by mail. Any party may change its address for
purposes hereof by notice to the other parties given in accordance with the
provisions hereof.
GENERAL
This Agreement may not be modified or terminated orally. This
Agreement shall inure to the benefit of and be binding upon the parties hereto,
their successors and assigns. The term "Lender" shall include the then holder
of any interest in the Mortgage. The term "Current Landlord" shall mean the
then holder of the lessor's interest in the Lease. The term "person" shall mean
any individual, joint venture, corporation, partnership, trust, unincorporated
association or other entity. All references herein to the Lease shall mean the
Lease as modified by this Agreement and any amendments or modifications to the
Lease which are consented to in writing by the Lender. Any inconsistency
between the Lease and the provisions of this Agreement shall be resolved in
favor of this Agreement.
This Tenant Certificate is being executed and delivered by Tenant to
induce Lender to make the Loan which is to be secured in part by an assignment
to Lender of Landlord's interest in the Lease and with the intent and
understanding that the above statements will be relied upon by Lender. This
Tenant Certificate shall inure to the benefit of and be binding upon the
parties hereto, their successors and permitted assigns, and any purchaser or
purchasers at foreclosure of the Property, and their respective heirs, personal
representatives, successors and assigns.
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WAIVERS
Both Tenant and Lender hereby irrevocably waive all right to trial by
jury in any action, proceeding or counterclaim arising out of or relating to
this Agreement.
GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
the laws of the State in which the Property is located.
IN WITNESS WHEREOF, the parties hereto have executed this Tenant
Certificate to be effective as of the day and year first stated above.
"LENDER"
-------------------------------------------
a
-----------------------------------------
By:
----------------------------------------
Printed Name:
------------------------------
Title:
-------------------------------------
"TENANT"
-------------------------------------------
a
-----------------------------------------
By:
----------------------------------------
Printed Name:
------------------------------
Title:
------------------------------------
AGREED AND CONSENTED TO:
"BUYER"
American Industrial Properties REIT,
a Texas real estate investment trust,
By:
----------------------------------
Printed Name:
------------------------
Title:
-------------------------------
Date:
--------------------------
56
ACKNOWLEDGMENTS
STATE OF __________________ )
)
COUNTY OF ________________ )
BEFORE ME, the undersigned authority on this day personally appeared
________________________, the ______________ of
____________________________________, a ________________, known to me to be the
person whose name is subscribed to the foregoing instrument, and acknowledged
to me that he executed the same for the purposes and consideration therein
expressed, and as the act and deed of said _______________________, and in the
capacity therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, in this ____ day of
__________, 199__.
--------------------------------------------
NOTARY PUBLIC, State of
--------------------
57
ACKNOWLEDGMENTS
STATE OF __________________ )
)
COUNTY OF ________________ )
BEFORE ME, the undersigned authority on this day personally appeared
________________________, the ______________ of
____________________________________, a ________________, known to me to be the
person whose name is subscribed to the foregoing instrument, and acknowledged
to me that he executed the same for the purposes and consideration therein
expressed, and as the act and deed of said _______________________, and in the
capacity therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, in this ____ day of
__________, 199__.
--------------------------------------------
NOTARY PUBLIC, State of Texas
58
ACKNOWLEDGMENTS
STATE OF TEXAS )
)
COUNTY OF )
BEFORE ME, the undersigned authority on this day personally appeared
________________________, the ______________ of American Industrial Properties
REIT, a Texas real estate investment trust, known to me to be the person whose
name is subscribed to the foregoing instrument, and acknowledged to me that he
executed the same for the purposes and consideration therein expressed, and as
the act and deed of said real estate investment trust [and
______________________], and in the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, in this ____ day of
__________, 199__.
--------------------------------------------
NOTARY PUBLIC, State of
---------------------
59
EXHIBIT "A"
Leases