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Exhibit 10.1
AGREEMENT FOR PURCHASE AND SALE
OF REAL PROPERTY AND ESCROW INSTRUCTIONS
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THIS AGREEMENT FOR PURCHASE AND SALE OF REAL PROPERTY AND ESCROW INSTRUCTIONS
("Agreement") is made and entered into as of this ___ day of June, 2000, by and
between ROBERT C. PARKER and CAROLYN De La FUENTE PARKER, Husband and Wife
("Seller") and TRIPLE NET PROPERTIES, LLC, a Virginia limited liability company
("Buyer"), with reference to the following facts:
A. Seller owns certain real property located in Angelina County, Texas,
commonly known as 210 Christie Street, Luftin, Texas, and such other
assets, as the same are herein described.
B. Seller desires to sell to Buyer and Buyer desires to purchase from
Seller such real property and the associated assets.
NOW, THEREFORE, in consideration of the mutual covenants, premises, and
agreements herein contained, the parties hereto do hereby agree as follows:
1. Purchase and Sale.
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1.1 The purchase and sale includes, and at Close of Escrow Seller shall
sell, transfer, grant and assign to Buyer, Seller's entire right and
interest in and to all of the following (hereinafter sometimes
collectively, the "Property"):
1.1.1. That certain real property, located at 210 Christie Street,
Lufkin, Texas, and more specifically described in Exhibit "A"
attached hereto, together with all structures, buildings,
improvements, machinery, fixtures, and equipment affixed or
attached to the real property and all easements, development
rights, rights of way, and other rights appurtenant to the real
property (all of the foregoing being collectively referred to
herein as the "Real Property);
1.1.2. All leases, including associated amendments, with all persons
("Tenants") leasing the Real Property or any part thereof (the
"Leases') or hereafter entered into in accordance with the terms
hereof prior to Close of Escrow, together with all security
deposits, other deposits held in connection with the Leases,
Lease guarantees and other similar credit enhancements providing
additional security for such Leases;
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1.1.3. All tangible and intangible personal property owned by Seller
located on or used in connection with the Real Property,
including, specifically, without limitation, equipment,
furniture, tools and supplies, and all related intangibles
(the "Personal Property").
1.1.4. All service contracts, agreements, warranties and guaranties
relating to the operation, use or maintenance of the Property
(the "Contracts"); and
1.1.5. To the extent transferable, all building permits, certificates
of occupancy and other certificates, permits, licenses and
approvals relating to the Property (the "Permits").
2. Purchase Price.
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The total Purchase Price of the Property shall be One Million Two Hundred
Fifty Thousand and No/100 Dollars ($1,250,000) ("Purchase Price") payable
as follows:
2.1 Deposit/Further Payments.
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2.1.1. Within two (2) business days following the date a fully
executed original of this Agreement is delivered to the Escrow
Holder (such delivery date hereafter the "Effective Date"),
Buyer shall deposit into Escrow the amount of Fifty Thousand
and No/100 Dollars ($50,000) (the "Deposit"), in the form of a
check or immediately available funds made payable to CHICAGO
TITLE COMPANY 560 East Hospitality Lane, Bernardino, CA 92408,
Attn: Kandy Knotts ("Escrow Holder"). Escrow Holder shall
place the Deposit into an interest bearing money market
account at a bank or other financial institution reasonably
satisfactory to Buyer, and interest thereon shall be credited
to Buyer's account and shall be deemed to be part of the
Deposit. In the event that this Agreement is terminated by
Buyer in accordance with its terms the Deposit shall be
immediately and automatically paid over to Buyer without the
need for any further action by either party hereto.
2.1.2. Within one (1) business day following the conclusion of the Due
Diligence Period, and absent Buyer's election to terminate
this Agreement pursuant to Paragraph 5.2, Buyer shall deliver
to Escrow Holder the additional sum of Fifty Thousand Dollars
($50,000), which amount shall be added to, and hereafter
included in the definition of, the Deposit.
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2.1.3. On or before Close of Escrow, Buyer shall deposit with the
Escrow Holder to be held in Escrow the balance of the Purchase
Price, in immediately available funds or a certified or
cashier's check made payable to Escrow Holder.
3. Title to Property.
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3.1. Title Insurance.
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Seller will, at Seller's sole expense, cause Escrow Holder to obtain
or issue an Extended Coverage ALTA Owner's Policy of Title Insurance
(the "Title Policy") from Chicago Title Company (the "Title Company")
for and on behalf of Buyer in the total amount of the Purchase Price
and obtainable at standard rates insuring good, marketable and
insurable title in and to the Real Property. The Title Policy shall be
free and clear of exceptions except as follows:
3.1.1. Real property taxes and assessments, which are a lien not yet
due;
3.1.2. The Permitted Exceptions included in such policy and approved
by Buyer as herein described.
3.2. Procedure for Approval of Title.
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Seller shall, no later than ten (10) days following the Effective
Date, provide to Buyer a current title insurance commitment and/or
preliminary title report for the Real Property, including good and
legible copies of all related items certified as exceptions thereto
(the "Title Documents"). Buyer shall have thirty (30) days following
receipt of the Title Documents to review and approve, in writing, the
condition of the title to the Real Property ("Title Review Period").
If the Title Documents (or the Survey described in Paragraph 4. 1. 1)
reflect or disclose any defect, exception or other matter affecting
the Real Property ("Title Defects") that is unacceptable to Buyer,
then Buyer shall provide Seller with written notice of Buyer's
objections no later than the conclusion of the Title Review Period;
provided, however, if Buyer shall fail to notify Seller in writing
within the Title Review Period either that the condition of title is
acceptable or of any specific objections to the state of title to the
Real Property, then Buyer shall be deemed to have objected to all
exceptions to title or other conditions or matters which are shown on
the Survey or described in the Title Documents. Seller may, at its
sole option, elect, by written notice given to Buyer within three (3)
days following the conclusion of the Title Review Period ("Seller's
Notice Period"), to cure or
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remove the objections made or deemed to have been made by Buyer;
provided, however, Seller shall in all events have the obligation to
(i) act in good faith in making such election and curing any Title
Defects that Seller elects to cure, (ii) specifically remove any
monetary encumbrances affecting the Real Property, and (iii) remove
any Title Defect that attaches to the Real Property subsequent to the
conclusion of the Title Review Period. The failure of Seller to
deliver written notice electing to cure any or all such objected to
exceptions during the Seller's Notice Period shall be deemed an
election by Seller not to cure such exceptions. Should Seller elect to
attempt to cure or remove any objection, Seller shall have fifteen
(15) days from the conclusion of the Title Review Period ("Cure
Period") in which to accomplish the cure. In the event Seller elects
(or is deemed to have elected) not to cure or remove any objection,
then Buyer shall be entitled, as Buyer's sole and exclusive remedies,
either to (i) terminate this Agreement and obtain a refund of the
Deposit or (ii) waive any objections that Seller has not elected to
cure and dose this transaction as otherwise contemplated herein. The
failure of Buyer to provide written notice to Seller within ten (10)
days following the expiration of the Seller's Notice Period waiving
any objections Seller has not elected to cure shall be deemed an
election by Buyer to terminate this Agreement. Any exceptions to title
accepted by Buyer pursuant to the terms of this paragraph shall be
deemed "Permitted Exceptions."
4. Due Diligence Items.
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4.1. Seller shall, within three (3) days after the Effective Date (the
"Delivery Date"), deliver to Buyer each of the following
(collectively, the "Due Diligence Items"):
4.1.1. An ALTA survey of the Real Property dated no earlier than
thirty (30) days prior to the Effective Date (the "Survey");
4.1.2. Copies of all Leases presently in effect with respect to the
Real Property, together with any amendments or modifications
thereof;
4.1.3. A "rent roll" with respect to the Real Property for the
calendar month immediately preceding the Effective Date,
showing with respect to each Tenant of the Real Property: (1)
the name of the Tenant, (2) the number of rentable square feet
in Tenant's premises as set forth in Tenant's Lease, (3) the
current monthly base rental payable by such Tenant, (4) the
term of the Lease, (5) any available options for the Tenant
under the Lease; and (6) the amount of any security deposit;
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4.1.4. A "rent roll" current as of December, 1998, 1999, and 2000
year to date;
4.1.5. An aging report showing, with respect to each Tenant of the
Real Property, the date through which such Tenant has paid
rent and a Tenant by Tenant monthly aging report for the
preceding 24 months;
4.1.6. A list of all contracts, including service contracts,
warranties, management, maintenance, leasing commission or
other agreements affecting the Real Property, if any, together
with copies of the same;
4.1.7. All site plans, leasing plans, as-built plans, drawings,
environmental, mechanical, electrical, structural, soils and
similar reports and/or audits and plans and specifications
relative to the Real Property in the possession of Seller or
under the control of Seller, if any;
4.1.8. True and correct copies of the real estate and personal
property tax statements covering the Property or any part
thereof for each of the two (2) years prior to the current
year and, if available, for-the current year;
4.1.9. A schedule of all current or pending litigation with respect
to the Real Property or any part thereof, if any, or otherwise
with respect to Seller that might have a material adverse
effect on Seller's ability to perform hereunder, together with
a brief description of each such proceeding;
4.1.10. Operating statements for the Real Property for calendar years
1998, 1999 and 2000 year to date, or if shorter, for any
periods during which Seller was owner of the Real Property;
4.1.11. Copies of Tenant files and records relating to the ownership
and operation of the Real Property (provided, however, with
Buyer's consent such files and records may be made available
for inspection by Buyer during ordinary business hours at
Seller's management office);
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4.1.12. An inventory of all personal property located on the Real
Property which is used in the maintenance of the Real
Property or stored for future use with the Real Property;
4.1.13. Copies of utility bills for the Real Property for the
calendar years 1998, 1999 and 2000 year to date;
4.1.14. A report from a licensed pest control contractor regarding
the presence on the Real Property of dry rot or termite
infestation;
4.1.15. A report from a licensed HVAC contractor concerning the
condition of HVAC equipment and its capacity to service the
Real Property;
4.1.16. A report from a licensed roofer concerning the waterproofness
and condition of the roof for the Real Property.
4.2. Estoppel Certificates.
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Seller shall obtain and deliver to Buyer, no later than ten (10) days
prior to Close of Escrow, estoppel certificates from Department of
Human Services and Department of Protective Services, in all cases in
a form provided by, or otherwise approved by, Buyer. The matters
certified in the estoppel certificates shall be subject to Buyer's
reasonable approval. Buyer shall notify Seller within three (3)
business days following receipt of a copy of any executed estoppel
certificate of Buyer's approval or disapproval and the basis of such
disapproval, if disapproved. If (a) Buyer reasonably disapproves of
any estoppel certificate, and Seller is unable to deliver a reasonably
acceptable estoppel certificate prior to the Close of Escrow, and,
without such estoppel certificate Seller will have failed to deliver
the Required Estoppels , this Agreement shall automatically terminate,
Buyer shall be entitled to a refund of the Deposit without any further
action required by any party, and neither party shall have any further
obligation to the other. In addition to the foregoing, Seller shall
use diligent efforts to obtain any and all subordination, attornment
and non-disturbance agreements required by Buyer's lender.
5. Inspections.
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5.1 Procedure, Indemnity.
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Buyer, at its sole expense, shall have the right to conduct a
feasibility, environmental, engineering and physical study of the Real
Property at any
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time from and after Effective Date and for a period of thirty (30)
days thereafter (the "Due Diligence Period"); provided, however, if
the Due Diligence Items are not delivered on the Delivery Date, Buyer
may, by written notice delivered prior to the conclusion of the
original Due Diligence Period, extend the Due Diligence Period for a
period equal to the associated delay in delivery of such materials
beyond the Delivery Date. Buyer and its duly authorized agents or
representatives shall be permitted to enter upon the Real Property at
all reasonable times during the Due Diligence Period in order to
conduct engineering studies, soil tests and any other inspections
and/or tests that Buyer may deem necessary or advisable (collectively,
the "Inspections"). Buyer agrees to promptly discharge any hens that
may be imposed against the Real Property as a result of Buyer's
Inspections and to defend, indemnify and hold Seller harmless from all
claims, suits, losses, costs, expenses (including without limitation
court costs and attorneys' fees), liabilities, judgments and damages
incurred by Seller as a result of any Inspections performed by Buyer.
5.2. Approval.
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5.2.1. Buyer shall have until the conclusion of the Due Diligence
Period (as the same may be extended in accordance with the
terms of Paragraph 5.1 above) to approve or disapprove of the
Inspections and the Due Diligence -Items enumerated in 4. If
Buyer shall fail to deliver a written notice to Seller and
Escrow Holder within the Due Diligence Period approving the
condition of the Real Property this Agreement shall thereupon
be automatically terminated, Buyer shall not be entitled to
purchase the Real Property, Seller shall not be obligated to
sell the Real Property to Buyer and the parties shall be
relieved of any further obligation to each other with respect
to the Real Property. Upon termination, Escrow Holder shall,
without any further action required from any party, return all
documents and funds, including the Deposit, to the parties who
deposited same and no further duties shall be required of
Escrow Holder.
5.2.2. Notwithstanding anything to the contrary contained herein,
Buyer hereby agrees that in the event this Agreement is
terminated for any reason, then Buyer shall promptly and at
its sole expense return to Seller all Due Diligence Items
which have been delivered by Seller to Buyer in connection
with Buyer's inspection of the Real Property.
6. Escrow.
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6.1. Opening.
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Purchase and sale of the Property shall be consummated through an
escrow ("Escrow") to be opened with Escrow Holder within two (2)
business days after the execution of this Agreement by Seller and
Buyer. This Agreement shall be considered as the Escrow instructions
between the parties, with such further consistent instructions as
Escrow Holder shall require in order to clarify its duties and
responsibilities. If Escrow Holder shall require further Escrow
instructions, Escrow Holder may prepare such instructions on its usual
form. Such further instructions shall, so long as not inconsistent
with the terms of this Agreement, be promptly signed by Buyer and
Seller and returned to Escrow Holder within three (3) business days of
receipt thereof. In the event of any conflict between the terms and
conditions of this Agreement and any further Escrow instructions, the
terms and conditions of this Agreement shall control.
6.2. Close of Escrow.
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Escrow shall close at a mutually agreeable date ("Close of Escrow")
within forty-five (45) days after the expiration of the Due Diligence
Period (as such period may be extended pursuant to Paragraph 5.1
hereof). The foregoing notwithstanding, Buyer may, at Buyers election,
and upon payment of FIFTY THOUSAND and No/100 Dollars ($50,000) on
each occasion, extend the Close of Escrow on not more than two (2)
occasions for additional periods of thirty (30) days each. Any
payments received by Seller pursuant hereto shall be applied to the
Purchase Price at Close of Escrow.
6.3 Buyer Required to Deliver.
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Buyer shall deliver to Escrow the following:
6.3. 1. In accordance with Paragraph 2, the Deposit;
6.3.2 On or before Close of Escrow, the balance of the Purchase
Price; provided, however that Buyer shall not be required to
deposit the balance of the Purchase Price into Escrow until
Buyer has been notified by Escrow Holder that (i) Seller has
delivered to Escrow each of the documents and instruments to
be delivered by Seller in connection with Buyer's purchase of
the Property, (ii) Title Company has committed to issue and
deliver the Title Policy to Buyer, and (iii) the only
impediment to Close of Escrow is delivery of such amount by
or on behalf of Buyer;
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6.3.3. On or before Close of Escrow, such other documents as Title
Company may require from Buyer in order to issue the Title
Policy;
6.3.4. An original Assignment and Assumption Agreement, duly
executed by Buyer assuming all of Seller's right, title and
interest in and to the Leases, the Permits and the Contracts
from and after the Close of Escrow.
6.4. Seller Required to Deliver.
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On or before Close of Escrow, Seller shall deliver to Escrow or Buyer,
as applicable, the following:
6.4.1. A duly executed and acknowledged Grant Deed or Warranty Deed,
conveying fee title to the Real Property in favor of Buyer;
6.4.2. A completed Certificate of Non-Foreign Status, duly executed
by Seller under penalty of perjury;
6.4.3. An FTB Form 590 or other evidence that withholding of any
portion of the Purchase Price is not required by the Revenue
and Taxation Code of California or any other applicable
jurisdiction, duly executed by Seller under penalty of
perjury;
6.4.4. A Bill of Sale, for the Personal Property, if any, in favor of
Buyer and duly executed by Seller;
6.4.5. Such other documents as Title Company may require from Seller
in order to issue the Title Policy;
6.4.6. Tenant's estoppel certificates as required by and provided for
in Paragraph 4.2;
6.4.7. An original Assignment and Assumption Agreement duly executed
and acknowledged by Seller, assigning all of Seller's interest
in and to the Leases, Contracts and Permits to Buyer from and
after the Close of Escrow;
6.4.8. To Buyer, all keys to all buildings and other improvements
located on the Real Property, combinations to any safes
thereon, and security devices therein in Seller's possession;
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6.4.9. A letter from Seller addressed to each Tenant informing such
Tenant of the change in ownership as set forth;
6.4.10. To Buyer, the original Leases; and
6.4. 11.To Buyer, all records and files relating to the management or
operation of the Real Property, including, without limitation,
all insurance policies, all security contracts, all tenant
files (including correspondence), property tax bills, and all
calculations used to prepare statements of rental increases
under the Leases and statements of common area charges,
insurance, property taxes and other charges which are paid by
Tenants of the Real Property.
6.5. Buyer's Costs.
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Buyer shall pay the following:
6.5.1. One-half (1/2) of Escrow Holder's fee, costs and expenses;
6.5.2. The cost of recording any deed of trust or other documentation
required by Buyer's lender in conjunction with any financing
obtained by Buyer;
6.5.3. All other costs customarily borne by purchasers of real
property in Angelina County, Texas.
6.6. Seller's Costs.
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Seller shall pay the following:
6.6.1. One-half (1/2) of Escrow Holder's fees, costs and expenses;
6.6.2. The cost of recording the Deed and any transfer tax;
6.6.3. Title Company's premium for the Title Policy;
6.6.4. All other costs customarily borne by sellers of real property
in Angelina County, Texas.
6.7 Prorations.
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6.7.1. Real property taxes, personal property taxes, assessments,
rents, and CAM expenses shall be prorated through Escrow
between Buyer and Seller as of Close of Escrow. All security
deposits shall be paid over to Buyer. Rents and CAM expenses
shall be approved by Buyer prior to Close of Escrow. Any
delinquent rents attributable to periods prior to the Close of
Escrow and which are collected by Buyer or Seller shall be
retained by or paid to Seller; provided, however, that any
amounts collected by Buyer or Seller shall be first applied to
any rents then due to Buyer and, if collected by Seller,
remitted to Buyer for such purpose. Seller shall have the
right to pursue any Tenant for delinquent rent, but shall not
(a) cause Tenant to be delinquent for their current rent or
become financially unstable or (b) have the right to seek
eviction of the Tenant by unlawful detainer or other means.
Tax and assessment prorations shall be based on the latest
available tax bill. If after Close of Escrow either party
receives any further or supplemental tax bill relating to any
period prior to Close of Escrow, the recipient shall promptly
deliver a copy of such tax bill to the other party, and not
later than ten (10) days prior to the delinquency date shown
on such tax bill Buyer and Seller shall deliver to the taxing
authority their respective shares of such tax bill, prorated
as of Close of Escrow. All prorations shall be based on a 360-
day year.
6.7.2. All leasing commissions owing and tenant improvements with
respect to the Real Property entered into prior to execution
of the Agreement including, but not limited to, commissions
for lease renewals and expansion options, shall be paid by
Seller, and Seller shall indemnify and hold Buyer harmless for
lease commission claims brought against the Real Property
arising therefrom. All leasing commissions and tenant
improvement costs for new Leases executed after the date of
this Agreement shall be prorated between Buyer and Seller as
their respective periods of ownership bears to the primary
term of the new Lease subject, in all events, to the prior
approval of said Leases as herein provided by Buyer pursuant
to Paragraph 7.3.
6.7.3. Seller agrees to indemnify and hold Buyer harmless from any
and all liabilities, claims, demands, suits, and judgments, of
any kind or nature, including court costs and reasonable
attorney fees (except those items which under the terms of
this Agreement specifically become the obligation of Buyer),
brought by third parties and based on events occurring on or
before the Close of Escrow and which are in any way related to
the Property.
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6.7.4. Buyer agrees to indemnify and hold Seller harmless of and from
any and all liabilities, claims, demands, suits and judgments,
of any kind or nature, including court costs and reasonable
attorneys fees, brought by third parties and based on events
occurring subsequent to the Close of Escrow and which are in
any way related to the Property.
6.8. Determination of Dates of Performance.
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Promptly after delivery to Buyer of the Title Documents, Escrow Holder
shall prepare and deliver to Buyer and Seller a schedule which shall state
each of the following dates:
6.8.1. The Effective Date pursuant to Paragraph 2.1.1;
6.8.2. The date of receipt of the Title Documents by Buyer;
6.8.3. The date by which title must be approved by Buyer pursuant to
Paragraph 3.2;
6.8.4 The Delivery Date pursuant to Paragraph 4.1;
6.8.5 The date by which the Inspections and Due Diligence Items must be
approved by Buyer pursuant to Paragraph 5.2;
6.8.6 The date by which the amounts described in Paragraph 2 must be
deposited by Buyer, for which determination Escrow Holder shall
assume satisfaction of the condition expressed in Paragraph 2 on
the last date stated for its satisfaction; and
6.8.7. The date of Close of Escrow pursuant to Paragraph 6.2.
If any events which determine any of the aforesaid dates occur on a date
other than the date specified or assumed for its occurrence in this
Agreement, Escrow Holder shall promptly re-determine as appropriate each of
the dates of performance in the aforesaid schedule and notify Buyer and
Seller of the dates of performance, as re-determined.
7. Seller Representations, Warranties, and Covenants
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7.1 Representations and Warranties.
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Seller hereby represents and warrants as of the date hereof and as of
the Close of Escrow by appropriate certificate to Buyer as follows:
7.1.1. Sellers are individuals. Sellers have full power and
authority to enter into this Agreement, to perform this
Agreement and to consummate the transactions contemplated
hereby. The execution, delivery and performance of this
Agreement and all documents contemplated hereby by Seller
have been duly and validly authorized by all necessary action
on the part of Seller and all required consents and approvals
have been duly obtained and will not result in a breach of
any of the terms or provisions of, or constitute a default
under, any indenture, agreement or instrument to which Seller
is a party or otherwise bound. This Agreement is a legal,
valid and binding obligation of Seller, enforceable against
Seller in accordance with its terms, subject to the effect of
applicable bankruptcy, insolvency, reorganization,
arrangement, moratorium or other similar laws affecting the
rights of creditors generally.
7.1.2. Seller has good and marketable title to the Real Property,
subject to the Permitted Exceptions. There are no outstanding
rights of first refusal, rights of reverter or options
relating to the Real Property or any interest therein. To
Seller's knowledge, there are no unrecorded or undisclosed
documents or other matters which affect title to the Real
Property. Subject to the Leases, Seller has enjoyed the
continuous and uninterrupted quiet possession, use and
operation of the Real Property, without material complaint or
objection by any person.
7.1.3. Seller is not a "foreign person!' within the meaning of
Section 1445(f) of the Internal Revenue Code.
7.1.4. There are no on-site employees of Seller at the Real
Property, and following the Close of Escrow, Buyer shall have
no obligation to employ or continue to employ any individual
employed by Seller or its affiliates in connection with the
Real Property.
7.1.5 Except as set forth on any schedule of litigation delivered
pursuant to Paragraph 4.1.9, there are no actions, suits or
proceedings pending, or to the best of Seller's knowledge,
threatened against Seller and affecting any portion of the
Real Property, at law or in equity, or before or by any
federal, state, municipal, or other
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governmental court, department, commission, board, bureau,
agency, or instrumentality, domestic or foreign.
7.1.6. Seller has not received any notice of any violations of any
ordinance, regulation, law, or statute of any governmental
agency pertaining to the Real Property or any portion thereof
7.1.7. There are no unpaid bills, claims, or liens in connection
with any construction or repair of the Real Property except
for those that will be paid in the ordinary course of
business prior to Close of Escrow or which have been bonded
over or the payment of which has otherwise been adequately
provided for to the satisfaction of Buyer.
7.1.8. Seller has not experienced any material physical or
mechanical defects in the buildings or any material
settlement or earth movement affecting the Real Property.
7.1.9. To Seller's knowledge, the zoning of the Real Property
permits the current building and use of the Real Property,
and to Seller's knowledge there is no pending, or
contemplated, rezoning. To Seller's knowledge, the Real
Property complies with all applicable subdivision laws and
all local ordinances enacted thereunder and no subdivision or
parcel map not already obtained is required to transfer the
Real Property to Buyer.
7.1.10. The information in the Rent Roll is true, correct, and
complete. Seller has or will pursuant to Paragraph 4 and
Paragraph 7.3 deliver to Buyer true, accurate and complete
copies of all of the Leases and there are no leases,
subleases, licenses, occupancies or tenancies in effect
pertaining to any portion of the Real Property, and no
persons, tenants or entities occupy space in the Real
Property, except as stated in the Rent Roll. There are no
options or rights to renew, extend or terminate the Leases or
expand any Lease premises, except as shown in the Rent Roll
and the Leases. No brokerage commission or similar fee is due
or unpaid by Seller with respect to any Lease, and there are
no written or oral agreements that will obligate Buyer, as
Seller's assignee, to pay any such commission or fee under
any Lease or extension, expansion or renewal thereof The
Leases and any guaranties thereof are in full force and
effect, and are subject to no defenses, setoffs or
counterclaims for the benefit of the Tenants thereunder.
Neither Seller nor, to Seller's knowledge, any Tenant is in
default under its Lease. Seller is in full compliance with
all of the landlords
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obligations under the Leases, and Seller has no obligation to
any Tenant under the Leases to further improve such Tenant's
premises or to grant or allow any rent or other concessions.
No rent or other payments have been collected in advance for
more than one (1) month and no rents or other deposits are
held by Seller, except the security deposits described on the
Rent Roll and rent for the current month. Each rental
concession, rental abatement or other benefit granted to
Tenants under the Leases will have been fully utilized prior
to the Close of Escrow.
7.1.11. To Seller's knowledge, there are no presently pending or
contemplated proceedings to condemn the Real Property or any
part of it.
7.1.12. To Seller's knowledge, all water, sewer, gas, electric,
telephone and drainage facilities, and all other utilities
required by law or by the normal operation -of the Real
Property are connected to the Real Property and are adequate
to service the Real Property in its present use and normal
usage by the Tenants and occupants of the Real Property and
are in good working order and repair.
7.1.13. To Seller's knowledge, Seller has all licenses, permits
(including, without limitation, all building permits and
occupancy permits), easements and rights-of-way which are
required in order to continue the present use of the Real
Property and ensure adequate vehicular and pedestrian ingress
and egress to the Real Property.
7.1.14. Except for the Contracts, there are no agreements or other
obligations which may affect the current use of the Real
Property. Seller has fully performed all of the obligations
required to be performed by Seller under the Contracts, and
to Seller's knowledge, the other parties to the same are not
in default thereunder.
7.1.15. The operating statements furnished to Buyer in connection
with or pursuant to this Agreement (a) accurately reflect the
financial condition of the Real Property as of the date
thereof and (b) do not fail to state any material liability,
contingent or otherwise, or any other facts the omission of
which would be misleading.
7.1.16. Seller has no knowledge of nor received any written notice of
violation issued pursuant to any environmental law with
respect to the Real Property or any use or condition thereof.
There are no
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above-ground or underground storage tanks located on the Real
Property.
7.1.17. Seller has not released and, to the best of Seller's
knowledge, there has been no release of, any pollutant or
hazardous substance of any kind onto or under the Real
Property that affects the Real Property or that would result
in the prosecution of any claim, demand, suit, action or
administrative proceeding against Buyer as owner of the Real
Property based on any environmental requirements of state,
local or federal law including, but not limited to, the
Comprehensive Environmental Response Compensation and
Liability Act of 1980, U.S.C. 9601 et seq.
7.2 Indemnity; Survival.
-------------------
The foregoing representations and warranties of Seller are made by
Seller as of the date hereof and again as of Close of Escrow and
shall survive the Close of Escrow for a period of one year and shall
not be merged as of the date of the Close of Escrow hereunder. Seller
shall indemnify and defend Buyer against and hold Buyer harmless
from, and shall be responsible for all claims, demands, liabilities,
losses, damages, costs and expenses, including reasonable attorney's
fees, that may be suffered or incurred by Buyer, including any third
party due diligence expenses incurred by Buyer, if any representation
or warranty made by Seller is untrue or incorrect in any material
respect when made. The terms of Seller's indemnity set forth above
with respect to the representations and warranties made herein shall
survive for a period of one year following the Close of Escrow.
7.3. Covenants of Seller.
-------------------
Seller hereby covenants from and after the Effective Date as follows:
7.3.1. To cause to be in force fire and extended coverage insurance
upon the Real Property, and public liability insurance with
respect to damage or injury to persons or property occurring
on the Real Property in at least such amounts as are
maintained by Seller on the date hereof.
7.3.2 That any building constituting an improvement on the Real
Property will be in the same physical condition at the Close
of Escrow that it was at the date of Buyer's inspection, and
that all normal maintenance has been conducted from and after
the Effective Date in the same fashion as prior to the
Effective Date.
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7.3.3. To not enter into any new lease with respect to the Real
Property, without Buyer's prior written consent, which shall
not be unreasonably withheld. Exercise of a mandatory renewal
option shall not be considered a new lease. To the extent
specifically disclosed to Buyer in connection with any
request for approval, any brokerage commission and the cost
of Tenant improvements or other allowances payable with
respect to a new Lease shall be prorated between Buyer and
Seller in accordance with their respective periods of
ownership as it bears to the primary term of the new Lease.
Further, Seller will not modify or cancel any existing Lease
covering space in the Real Property without first obtaining
the written consent of Buyer which shall not be unreasonably
withheld. Buyer shall have five (5) business days following
receipt of a request for any consent pursuant to this
paragraph in which to approve or disapprove of any new Lease
or any modification or cancellation of any existing Lease.
Failure to respond in writing within said time period shall
be deemed to be consent. Seller's execution of a new lease or
modification or cancellation of an existing Lease following
Buyer's reasonable refusal to consent thereto shall
constitute a default hereunder.
7.3.4. To not sell, assign, or convey any right, title, or interest
whatsoever in or to the Real Property, or create or permit to
attach any lien, security interest, easement, encumbrance,
charge, or condition affecting the Real Property (other than
the Permitted Exceptions).
7.3.5. To not, without Buyer's written approval, (a) amend or waive
any right under any Contract, or (b) enter into any service,
operating or maintenance agreement affecting the Real
Property that would survive the Close of Escrow.
7.3.6. To fully and timely comply with all obligations to be
performed by it under the Leases and Contracts, and all
Permits, licenses, approvals and laws, regulations and orders
applicable to the Real Property.
8. Buyer hereby represents and warrants to Seller as of the date hereof and as
of the Close of Escrow by appropriate certificate that:
Buyer is a limited liability company duly organized and validly existing
under the laws of the State of Virginia. Buyer has full power and authority
to enter into this Agreement, to perform this Agreement and to consummate
the transactions
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contemplated hereby. The execution, delivery and performance of this
Agreement and all documents contemplated hereby by Buyer have been duly and
validly authorized by all necessary action on the part of Buyer and all
required consents and approvals have been duly obtained and will not result
in a breach of any of the terms or provisions of, or constitute a default
under, any indenture, agreement or instrument to which Buyer is a party or
otherwise bound. This Agreement is a legal, valid and binding obligation of
Buyer, enforceable against Buyer in accordance with its terms, subject to
the effect of applicable bankruptcy, insolvency, reorganization,
arrangement, moratorium or other similar laws affecting the rights of
creditors generally.
9. Conditions Precedent to Close of Escrow.
---------------------------------------
9.1 Conditions Precedent.
--------------------
The obligations of Buyer to purchase the Property pursuant to this
Agreement shall, at the option of Buyer, be subject to the following
conditions precedent:
9.1.1. All of the representations, warranties and agreements of
Seller set forth in this Agreement shall be true and correct
in all material respects as of the date hereof and as of the
Close of Escrow, and Seller shall not have on or prior to the
Close of Escrow, failed to meet, comply with or perform in
any material respect any covenants or agreements on Seller's
part as required by the terms of this Agreement.
9.1.2. There shall be no change in the matters reflected in the
Title Documents, and there shall not exist any encumbrance or
title defect affecting the Real Property not described in the
Title Documents except for the Permitted Exceptions or
matters to be satisfied at the Close of Escrow.
9.1.3. Unless Seller receives notice from Buyer at least thirty (30)
days prior to the Close of Escrow, effective as of the Close
of Escrow, any management agreement affecting the Real
Property shall be terminated by Seller and any and all
termination fees incurred as a result thereof shall be the
sole obligation of Seller.
9.1.4. Seller shall have operated the Real Property from and after
the date hereof in substantially the same manner as prior
thereto.
9.2. Effect of Failure.
-----------------
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If Buyer notifies Seller of a failure to satisfy the conditions
precedent set forth in this Paragraph 9, Seller may, within five (5)
days after receipt of Buyer's notice, agree to satisfy the condition
by written notice to Buyer, and Buyer shall thereupon be obligated to
close the transaction provided (a) Seller so satisfies such condition
and (b) no such right to cure shall extend the Close of Escrow. If
Seller fails to agree to cure or fails to cure such condition by the
Close of Escrow, this Agreement shall be automatically terminated,
the Deposit shall be returned to Buyer without any further action
required from either party and neither party shall have any
continuing obligations hereunder; provided, however, if such failure
constitutes a breach or default of its covenants, representations or
warranties Seller shall remain liable for such breach or default as
otherwise set forth in this Agreement.
10. Damage or Destruction Prior to Close of Escrow.
----------------------------------------------
In the event that the Real Property should be damaged by any casualty prior
to Close of Escrow, then Seller shall promptly provide Buyer with written
notice of such casualty. If the cost of repairing such damage, as estimated
by an architect or contractor retained pursuant to the mutual agreement of
the parties, is (a) less than One Hundred Thousand Dollars ($100,000), the
Close of Escrow shall proceed as scheduled and any insurance proceeds, plus
the cash amount of any associated deductible, shall be paid over to Buyer;
or (b) greater than One Hundred Thousand Dollars ($100,000), then Buyer may
in its discretion either (i) elect to terminate this Agreement, in which
case the Deposit shall be returned to Buyer without any further action
required from either party and neither party shall have any further
obligation to the other or (ii) proceed to Close of Escrow in which event
any insurance proceeds, plus the cash amount of any associated deductible,
shall be paid over to Buyer. The foregoing notwithstanding, in the event any
casualty results in the cancellation of, or rental abatement under, any
Lease, Buyer shall have the option to terminate this Agreement without
regard to the cost of repairs. Any notice required to terminate this
Agreement pursuant to this Paragraph shall be delivered no later than thirty
(30) days following Buyer's receipt of Seller's notice of such casualty.
11. Eminent Domain.
--------------
If, before the Close of Escrow, proceedings are commenced for the taking by
exercise of the power of eminent domain of all or a material part of the
Real Property which, as reasonably determined by Buyer, would render the
Real Property unacceptable to Buyer or unsuitable for Buyer's intended use,
Buyer shall have the right, by giving written notice to Seller within thirty
(30) days after Seller
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gives notice of the commencement of such proceedings to Buyer, to terminate
this Agreement, in which event this Agreement shall automatically terminate,
the Deposit shall be returned to Buyer without any further action required
from either party and neither party shall have any continuing obligations
hereunder. If, before the Close of Escrow, proceedings are commenced for the
taking by exercise of the power of eminent domain of less than a material
part of the Real Property, or if Buyer has the right to terminate this
Agreement pursuant to the preceding sentence but Buyer does not exercise
such right, then this Agreement shall remain in full force and effect and,
on the Close of Escrow, the condemnation award (or, if not theretofore
received, the right to receive such portion of the award) payable on account
of the taking shall be assigned, or paid to, Buyer. Seller shall give
written notice to Buyer within three (3) business days after Seller's
receiving notice of the commencement of any proceedings for the taking by
exercise of the power of eminent domain of all or any part of the Real
Property.
12. Notices.
-------
All notices, demands, or other communications of any type given by any party
hereunder, whether required by this Agreement or in any way related to the
transaction contracted for herein, shall be void and of no effect unless
given in accordance with the provisions of this Paragraph. All notices shall
be in writing and delivered to the person to whom the notice is directed,
either (a) in person, (b) by United States Mail, as a registered or
certified item, return receipt requested, (c) by telecopy or (d) by a
nationally recognized overnight delivery courier. Notices delivered by
telecopy or overnight courier shall be deemed received on the business day
following transmission. Notices delivered by certified or registered mail
shall be deemed delivered three (3) days following posting. Notices shall be
given to the following addresses:
Seller: Robert C. Parker
------ Carolyn De La Fuente Parker
2400 Goldenmoon Street
Las Vegas, NV 89108-4477
(702) 655-2512
(702) 655-2513 (fax)
Buyer: Anthony W. Thompson
----- TRIPLE NET PROPERTIES, LLC
1551 N. Tustin Avenue, Suite 650
Santa Ana, CA 92705
(714) 667-8252
(714) 667-6860 (fax)
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With Required Copy to: Louis J. Rogers, Esq.
--------------------- Hirschler, Fleischer, Weinberg, Cox & Allen
701 East Byrd Street, 15th Floor (23219)
Post Office Box 500 (23218-0500)
Richmond, VA
(804) 771-9500
(804) 644-0957 (fax)
13. Remedies.
--------
13.1. Defaults by Seller. If there is any default by Seller under
------------------
this Agreement, following notice to Seller and seven (7) days
thereafter during which period Seller may cure the default,
Buyer may at its option, either (a) declare this Agreement
terminated in which case the Deposit shall be returned to
Buyer without any further action required from either party,
and bring an action for any damages incurred by Buyer or (b)
treat the Agreement as being in full force and effect and
bring an action against Seller for specific performance. The
foregoing notwithstanding, no right to cure shall extend the
Close of Escrow.
13.2. Defaults by Buyer. If there is any default by Buyer under
-----------------
this Agreement, following notice to Buyer and seven (7) days,
during which period Buyer may cure the default, Seller may,
as its sole remedy, declare this Agreement terminated, in
which case the Deposit shall be paid to Seller as liquidated
damages and each party shall thereupon be relieved of all
further obligations and liabilities, except any which survive
termination. The foregoing notwithstanding, no right to cure
shall extend the Close of Escrow.
In the event this Agreement is terminated due to the default of Buyer
hereunder, Buyer shall, in addition, deliver to Seller, at no cost to
Seller, the Due Diligence Items.
14. Assignment.
----------
Buyer may assign any or all of its rights and obligations under this
Agreement to any one or more persons or entities upon notice to
Seller; provided however, that absent the express agreement of
Seller, no such assignment shall release Buyer from its liabilities
hereunder.
15. Interpretation and Applicable Law.
---------------------------------
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This Agreement shall be construed and interpreted in accordance with
the laws of the State where the Real Property is located. Where
required for proper interpretation, words in the singular shall
include the plural; the masculine gender shall include the neuter and
the feminine, and vice versa. The terms "successors and assigns"
shall include the heirs, administrators, executors, successors, and
assigns, as applicable, of any party hereto.
16. Amendment.
---------
This Agreement may not be modified or amended, except by an agreement
in writing signed by the parties. The parties may waive any of the
conditions contained herein or any of the obligations of the other
party hereunder, but any such waiver shall be effective only if in
writing and signed by the party waiving such conditions and
obligations.
17. Attorneys' Fees.
---------------
In the event it becomes necessary for either party to file a suit to
enforce this Agreement or any provisions contained herein, the
prevailing party shall be entitled to recover, in addition to all
other remedies or damages, reasonable attorneys' fees and costs of
court incurred in such suit.
18. Entire Agreement, Survival.
--------------------------
This Agreement (and the items to be furnished in accordance herewith)
constitutes the entire agreement between the parties pertaining to
the subject matter hereof and supersedes all prior and
contemporaneous agreements and understandings of the parties in
connection therewith. No representation, warranty, covenant,
agreement, or condition not expressed in this Agreement shall be
binding upon the parties hereto nor shall affect or be effective to
interpret, change, or restrict the provisions of this Agreement. The
obligations of the parties hereunder and all other provisions of this
Agreement shall survive the Close of Escrow or earlier termination of
this Agreement, except as expressly limited herein.
19. Counterparts.
------------
This Agreement may be executed in any number of counterparts, all of
which when taken together shall constitute the entire agreement of
the parties.
20. Acceptance.
----------
Time is of the essence of this Agreement. If the final date of any
period falls upon a Saturday, Sunday, or legal holiday under the laws
of the State of California, then
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in such event the expiration date of such period shall be extended to
the next day which is not a Saturday, Sunday, or legal holiday under
the laws of the State of California.
21. Real Estate Commission.
----------------------
Seller and Buyer each represent and warrant to the other that neither
Seller nor Buyer has contacted or entered into any agreement with any
real estate broker, agent, finder or any other party in connection
with this transaction, and that neither party has taken any action
which would result in any real estate broker's, finder's or other
fees or commissions being due and payable to any party with respect
to the transaction contemplated hereby, except that Seller agrees to
pay a commission of 5% of the Purchase Price to Triple Net Properties
Realty LLC. Each party hereby indemnifies and agrees to hold the
other party harmless from any loss, liability, damage, cost, or
expense (including reasonable attorneys' fees) resulting to the other
party by reason of a breach of the representation and warranty made
by such party in this Paragraph.
22. Financing Contingencies.
-----------------------
Buyer's obligations under this Agreement are contingent upon Buyer
obtaining, no later than forty-five (45) days after the mutual
execution of this Agreement, a binding commitment for financing to be
secured by a first mortgage or deed of trust against the Real
Property in an amount and terms reasonably acceptance to Buyer. The
failure of Buyer to notify Seller by the end of the forty-five (45)
day period that it has obtained the binding commitment shall be
deemed a failure of this contingency and this Agreement will, in such
event, be automatically terminated and the Deposit returned to Buyer
without further action required by either party. Buyer shall use good
faith efforts to obtain financing conforming to the terms of this
Paragraph.
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SIGNATURE PAGE FOR
CHRISTIE STREET BUILDING PURCHASE AGREEMENT
EXECUTED on this 5th day of June, 2000
SELLER:
------
/s/ Robert C. Parker
------------------------------------
Robert C. Parker
/s/ Carolyn De La Fuente Parker
------------------------------------
Carolyn De La Fuente Parker
EXECUTED on this 2nd day of June, 2000
BUYER:
-----
TRIPLE NET PROPERTIES, LLC, a Virginia limited liability company
By: /s/ Anthony W. Thompson
------------------------------------------
Anthony W. Thompson
President
44
