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Exhibit 10.2
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Exhibit 10.2
AGREEMENT FOR PURCHASE AND SALE
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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 October, 2000, by and
between S-SI SEGUIN, LP, a Texas limited partnership ("Seller") and T REIT,
L.P., a Virginia limited partnership ("Buyer"), with reference to the following
facts:
A. Seller owns certain real property located in Guadalupe County,
Texas, commonly known as Seguin Corner Shopping Center 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.
-----------------
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. All of Seller's rights, title and interest in and to that
certain real property commonly known as Seguin Corner Shopping
Center, located at 596 South 123, Seguin, 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;
1.1.3. All tangible and intangible personal property (not to include
bank accounts, cash, accounts receivables or any computer
related equipment) owned by Seller located on or used in
connection with the Real Property, including, specifically,
without limitation, equipment, furniture, tools and
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supplies, and all related intangibles including Seller's
interest in the name "Seguin Corner Shopping Center" (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 TWO FOUR HUNDRED FIFTY
THOUSAND and No/100 Dollars ($2,450,000) ("Purchase Price") payable as
follows:
2.1. Deposit/Further Payments.
------------------------
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, San 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 deemed a
part of the Deposit. In the event that this Agreement is
terminated by Buyer, in accordance with Section 5 herein
below, the Deposit shall be immediately and automatically paid
over to Buyer without the need for any further action by
either party hereto.
First Mortgage Loan: Buyer's will assume the remaining unpaid
balance of the loan (in the approximate amount of $1,735,000)
secured by, a first mortgage lien on the property, infavor of
Bank of America, which loan and mortgage Buyer will have
reviewed and approved with application for assumption made
during the due diligence period. The terms and conditions of
such assumption must be satisfactory to Buyer in its
discretion. Seller will provide Buyer with a copy of said Note
and Mortgage not less than 10 days prior to the end of the Due
Diligence Period.
2.1.2. 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
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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 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 indefeasible 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.
-------------------------------
Seller shall, no later than two (2) 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.
Seller may, at its sole option, elect, by written notice given to
Buyer within two (2) days following the conclusion of the Title Review
Period ("Seller's Notice Period"), to cure or 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 ten (10) days from the conclusion of the
Title Review Period ("Cure Period") in
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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 close
this transaction as otherwise contemplated herein. Buyer shall provide
written notice to Seller within five (5) 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.
-------------------
4.1. Seller shall, within five (5) 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;
4.1.4. A "rent roll" current as of 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;
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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 year
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 and 15 day advance written notice to Seller,
such files and records may be made available for inspection by
Buyer during ordinary business hours at Seller's management
office);
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 existing loan documents and notes affecting the Real
Property, if loan is to be assumed;
4.1.14. Copies of utility bills for the Real Property for the calendar
years 2000 year to date;
4.1.15. Intentionally deleted;
4.1.16. Intentionally deleted;
4.1.17. Seller hereby agrees to provide Buyer with a copy of its most
current Environmental Impact Report for the Real Property.
Furthermore, Seller delivers the same report without any
representation, warranty of its content and Buyer's
interpretation and reliance thereof;
4.1.18. Intentionally deleted.
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 not less than
eighty-five percent (85%) of all Tenants of the Real Property
(measured by square footage occupied) (the
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"Required Percentage Estoppels"), in all cases in a form provided by,
or otherwise approved by, Buyer. In the event Seller is unable to
obtain the Required Percentage Estoppels despite diligent efforts to
do so, Seller may deliver to Buyer an estoppel certificate executed by
Seller and otherwise in form approved by Buyer covering sufficient
estoppels that, together with those obtained, equal the Required
Percentage Estoppels; provided, however, Seller shall thereafter
continue to use diligent efforts to obtain an estoppel certificate
executed by any such Tenant. Whether executed by the Tenant or by
Seller, 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 Percentage Estoppels or (b) Seller
is unable to deliver acceptable forms of the Major 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 Bank of America.
5. Inspections.
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5.1 Procedure; Indemnity.
--------------------
Buyer, at its sole expense, shall have the right to conduct a
feasibility, environmental, engineering and physical study of the Real
Property at any time from and after Effective Date and for a period of
thirty (30) days thereafter (the "Due Diligence Period"). 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,
make application of Bank of America Loan and any other inspections
and/or tests that Buyer may deem necessary or advisable (collectively,
the "Inspections"). Buyer agrees to promptly discharge any liens 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
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Items enumerated in Paragraph 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.
---------------
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 Buyer's
election, and upon payment of TWENTY-FIVE THOUSAND and No/100 Dollars
($25,000) on each occasion, extend the Close of Escrow on not more
than one (1) occasion for additional period of thirty (30) days. Any
payments received shall be non-refundable and applicable to the
Purchase Price at Close of Escrow.
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6.3. Buyer Required to Deliver.
-------------------------
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;
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.
--------------------------
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 Special 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. Intentionally deleted.
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;
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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;
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 Guadalupe County, Texas;
6.5.4. All cost associated with the assumption of the Seller's
existing mortgage with Bank of America.
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 Owner's Title Policy not to
exceed $7,500;
6.6.4. All other costs customarily borne by sellers of real property
in Guadalupe County, Texas.
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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
cause Tenant to be delinquent for their current rent or become
financially unstable; however in the event Tenant fails to
provide delinquent rents within four (4) months from the date
of Seller's notice, all legal rights and actions shall become
available to Seller, at it's sole discretion. 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.
Percentage Rents. Any percentage rents due or paid under any
----------------
of the Leases ("Percentage Rent") shall be prorated between
Buyer and Seller outside of Escrow as of the date of Close of
Escrow on a Lease-by-Lease basis, as follows; (a) Seller shall
be entitled to receive the portion of the Percentage Rent
under each Lease for the Lease Year in which Close of Escrow
occurs, which portion shall be the ratio of the number of days
of said Lease Year in which Seller was Landlord under Lease to
the total number of days in said Lease Year., and (b) Buyer
shall receive the balance of Percentage rent paid under each
Lease for the lease Year. As used herein, the term "Lease
Year" means the twelve (12) month period as to which annual
Percentage rent is owed under each Lease, Upon receipt by
either Buyer or Seller of any Gross Sales reports and/or any
full or partial payment of percentage rent from any tenant of
the Property, the party receiving the same shall promptly
provide to the other party a copy of the Gross Sales Report
and/or a check for the other party's prorata share of the
percentage rent within five (5) days of the receipt thereof
Nothing contained herein shall be deemed or construed to
require either Buyer to Seller to pay to the other party its
prorata share of the percentage rent prior to receiving the
percentage rent from the tenant, and the acceptance or
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negotiation of any check for percentage rent by either party
shall not be deemed a waiver of that party's right to contest
the accuracy or amount of the percentage rent paid by the
tenant.
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.
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.
-------------------------------------
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;
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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, Buyer shall promptly, within five (5) days, re-
determine as appropriate each of the dates of performance in the
aforesaid schedule and notify Seller of the dates of performance, as
redetermined.
7. Seller Representations, Warranties, and Covenants.
-------------------------------------------------
7.1 Representations and Warranties.
------------------------------
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. Seller is a limited partnership duly formed and validly
existing under the law of the State of Texas. Seller has 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. To Seller's actual knowledge has good and indefeasible 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
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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 onsite 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 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. To Seller's actual knowledge it 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 actual 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
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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 landlord's 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.
7.1.1.1.To Seller's actual 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 actual 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 actual 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 actual 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
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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 aboveground or underground storage tanks located
on the Real Property.
7.1.17. Seller has not released and, to the best of Seller's actual
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 are suffered or incurred by Buyer, including any
third party due diligence expenses incurred by Buyer, as a result of
any representation or warrants 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
materially 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 material 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 Representations and Warranties.
------------------------------------
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 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
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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 at 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, 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.
9.1.5. Seller shall deliver to Buyer copies of Tenant insurance
certificates.
9.1.6. 1031 Exchange: It is Buyer's intent to effect a tax-deferred
exchange pursuant to Section 1031 of the Internal Revenue
Code. Seller agrees to cooperate in said exchange and agrees
to execute such documents or instruments as may be necessary
or appropriate to evidence such exchange, provided that
Seller's cooperation in such regard shall be at no
additional costs, expenses, or liability whatsoever to
Seller, and that no delays in the scheduled closing dated of
this escrow are incurred unless mutually agreed upon by all
parties to this Agreement.
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9.1.7 This escrow is contingent upon Buyer's assumption of the
loan of record with an approximate unpaid balance of
$1,735,000 in favor of Bank of America. Buyer agrees to pay
all reasonable fees associated with said assumption. In the
event, Buyer is not approved for said loan and/or does not
agree to the terms of said loan, this escrow shall terminate
and Buyer shall be entitled to the return of their deposit.
Buyer hereby agrees to act in a timely manner in providing
all necessary documentation for the application, approval
and funding/transfer of said loan.
9.2. Effect of Failure.
-----------------
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.
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
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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 ten (10) days after Seller
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: S-SI Seguin LP
St. Ives Holdings, LLC
100 N. Central Expressway, Suite 810
Richardson, Texas 75080
Attn: Troy Bathman or Jim Gissler
(972) 235-7888
(972) 235-3570 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
Post Office Box 500
Richmond, VA 23218-0500
(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 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.
---------------------------------
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.
---------
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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. Attorney's 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 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 has contracted with Paxton Sandidge as its
broker and will pay a commission
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to said broker of $46,000 payable at close of escrow . Seller further
agrees to pay Triple Net Properties Realty a commission of $150,000 at
close of escrow and payment of the Purchase Price. All commissions payable,
at close of escrow and funding of Purchase Price, shall be deemed earned
and payable upon this occurrence and funded by the title company at the
close of escrow. 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.
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SIGNATURE PAGE FOR SEQUIN CORNER SHOPPING CENTER
EXECUTED on this 6th day of October, 2000
SELLER:
S-SI SEGUIN, LP, a Texas limited partnership
By: BGRW SEGUIN VENTURE LP, a Texas limited partnership
Its: General Partner
By: St. Ives Holdings, LLC, a Texas limited liability company
Its: General Partner
By: /s/ James E. Gissler
---------------------------------------------------------------------
James E. Gissler
Title: Vice President
EXECUTED on this 5th day of October, 2000
BUYER:
T REIT, L.P., a Virginia limited partnership
By: TRIPLE NET PROPERTIES, LLC, a Virginia limited liability company
By: /s/ Anthony W. Thompson
--------------------------------------------------------------
Anthony W. Thompson
Title: President
NO EXHIBITS ARE ATTACHED
58
