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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): February 25, 1999
JOHN HANCOCK REALTY INCOME FUND-III LIMITED PARTNERSHIP
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Massachusetts 0-18563 04-2921566
(STATE OF (COMMISSION (IRS EMPLOYER
ORGANIZATION) FILE NO.) IDENTIFICATION NO.)
200 Clarendon Street
Boston, MA 02116 (800) 722-5457
(ADDRESS OF PRINCIPAL EXECUTIVE (REGISTRANT'S TELEPHONE
OFFICES, INCLUDING ZIP CODE) NUMBER, INCLUDING AREA
CODE)
Not Applicable
(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
Page 1 of 8
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JOHN HANCOCK REALTY INCOME FUND-III LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
ITEM 2 - Acquisition or Disposition of Assets
Disposition of the Allmetal Distribution Building
During June 1998, the General Partner listed the Allmetal Distribution Building
for sale because of the long-term lease with the sole tenant at the property and
the existing favorable conditions in the Texas real estate market. Pursuant to a
Purchase and Sale Agreement dated February 5, 1999, John Hancock Realty Income
Fund-III Limited Partnership (the "Partnership") sold the Allmetal Distribution
Building on February 25, 1999 for a net sales price of approximately $2,080,000
to a non-affiliated buyer after deductions for commissions and selling expenses
incurred in connection with the sale of the property. The sale of the property
resulted in a non-recurring gain of approximately $576,000, which represents the
difference between the net sales price and the property's carrying value of
approximately $1,504,000.
Based upon the General Partner's analysis of comparable sales transactions and
its review of the offers received during the property's marketing period, the
General Partner accepted the offer from Cabot Industrial Properties, L.P. (the
"Buyer") as the most favorable. There is no relationship between the Buyer and
the Partnership or any associate, director or officer of the General Partner.
The sale was made pursuant to a Purchase and Sale Agreement dated February 5,
1999, which is included as Exhibit 1 of this report.
ITEM 7 - Financial Statements
(A) Financial Statements
Pro Forma Balance Sheet at September 30, 1998...................... 3
Pro Forma Statement of Operations for the Nine Months
Ended September 30, 1998...................................... 4
Pro Forma Statement of Operations for the Year Ended
December 31, 1997............................................. 5
Notes to Pro Forma Financial Statements............................ 6
(B) Exhibits
1. Purchase and Sale Agreement (excluding exhibits) between
John Hancock Realty Income Fund-III Limited Partnership and
Cabot Industrial Properties, L.P. dated February 5, 1999...... 9
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JOHN HANCOCK REALTY INCOME FUND-III LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
On February 25, 1999, the Partnership sold the Allmetal Distribution Building
property (the "Property") to the Buyer for a net sales price of approximately
$2,080,000. The Pro Forma Balance Sheet reflects the financial position of the
Partnership as if the Property had been sold on September 30, 1998. The Pro
Forma Statement of Operations for the nine months ended September 30, 1998
reflects the continued operations of the Partnership as if the Property had been
sold on December 31, 1997. In addition, the Pro Forma Statement of Operations
for the year ended December 31, 1997 reflects the continued operations of the
Partnership as if the Property had been sold on December 31, 1996.
JOHN HANCOCK REALTY INCOME FUND-III LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
PRO FORMA BALANCE SHEET
September 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
Pro Forma
Historical Adjustment for
Summary the Allmetal Pro Forma
September 30, Distribution September 30,
1998 Building 1998
---- -------- ----
<S> <C> <C> <C>
Cash and cash equivalents $ 3,182,199 $ 2,080,039 $ 5,262,238
Restricted cash 131,639 -- 131,639
Other assets 268,971 -- 268,971
Property held for sale 3,293,636 (1,504,448) 1,789,188
Investment in Joint Venture 7,206,936 -- 7,206,936
Investment in property:
Land 7,667,535 -- 7,667,535
Buildings and improvements 21,960,686 -- 21,960,686
------------ ------------ ------------
29,628,221 -- 29,628,221
Less: accumulated depreciation (5,379,751) -- ( 5,379,751)
------------ ------------ ------------
24,248,470 -- 24,248,470
Deferred expenses, net of accumulated
amortization of $1,623,405 942,088 -- 942,088
------------ ------------ ------------
Total assets $ 39,273,939 $ 575,591 $ 39,849,530
============ ============ ============
Liabilities:
Accounts payable and accrued expenses $ 481,085 $ -- $ 481,085
Accounts payable to affiliates 200,102 -- 200,102
------------ ------------ ------------
Total liabilities 681,187 -- 681,187
Partners' equity/(deficit):
General Partner ( 45,422) 5,756 ( 39,666)
Limited Partners 38,638,174 569,835 39,208,009
------------ ------------ ------------
Total partners' equity 38,592,752 575,591 39,168,343
------------ ------------ ------------
Total liabilities and partners' equity $ 39,273,939 $ 575,591 $ 39,849,530
============ ============ ============
</TABLE>
See Notes to Pro Forma Financial Statements
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JOHN HANCOCK REALTY INCOME FUND-III LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
PRO FORMA STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
Historical
Summary Pro Forma Pro Forma
For the Nine Adjustment for For the Nine
Months Ended the Allmetal Months Ended
September 30, Distribution September 30,
1998 Building 1998
---- -------- ----
Income:
<S> <C> <C> <C>
Rental income $ 2,940,826 ($ 183,156) $ 2,757,670
Income from Joint Venture 579,420 -- 579,420
Interest income 108,178 -- 108,178
----------- ----------- -----------
Total income 3,628,424 ( 183,156) 3,445,268
Expenses:
Depreciation 597,838 ( 94,636) 503,202
General and administrative 342,473 -- 342,473
Property operating expenses 187,537 -- 187,537
Amortization of deferred expenses 276,429 ( 7,784) 268,645
----------- ----------- -----------
Total expenses 1,404,277 ( 102,420) 1,301,857
----------- ----------- -----------
Net income $ 2,224,147 ($ 80,736) $ 2,143,411
=========== =========== ===========
Allocation of net income:
General Partner $ 151,177 ($ 7,822) $ 143,355
John Hancock Limited Partner 226,833 ( 12,341) 214,492
Investors 1,846,137 ( 60,573) 1,785,564
----------- ----------- -----------
$ 2,224,147 ($ 80,736) $ 2,143,411
=========== =========== ===========
Net income per Unit $ 0.76 ($ 0.02) $ 0.74
=========== =========== ===========
</TABLE>
See Notes to Pro Forma Financial Statements
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JOHN HANCOCK REALTY INCOME FUND-III LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
PRO FORMA STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
Historical Pro Forma
Summary Adjustment for Pro Forma
For the Year Ended the Allmetal For the Year Ended
December 31, Distribution December 31,
1997 Building 1997
(Audited) (Unaudited) (Unaudited)
Income:
<S> <C> <C> <C>
Rental income $ 3,600,452 ($ 240,257) $ 3,360,195
Income from Joint Venture 704,292 -- 704,292
Interest income 142,959 -- 142,959
----------- ----------- -----------
Total income 4,447,703 ( 240,257) 4,207,446
Expenses:
Depreciation 829,665 ( 45,768) 783,897
General and administrative 356,011 -- 356,011
Property operating expenses 314,874 -- 314,874
Amortization of deferred expenses 367,546 ( 3,892) 363,654
----------- ----------- -----------
Total expenses 1,868,096 ( 49,660) 1,818,436
----------- ----------- -----------
Net income $ 2,579,607 $ 190,597 $ 2,389,010
=========== =========== ===========
Allocation of net income:
General Partner $ 183,175 ($ 9,719) $ 163,456
John Hancock Limited Partner 276,868 ( 31,336) 245,532
Investors 2,119,564 ( 139,543) 1,980,021
----------- ----------- -----------
$ 2,579,607 ($ 190,597) $ 2,389,010
=========== =========== ===========
Net income per Unit $ 0.88 ($ 0.06) ($ 0.82)
=========== =========== ===========
</TABLE>
See Notes to Pro Forma Financial Statements
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JOHN HANCOCK REALTY INCOME FUND-III LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
Notes to Pro Forma Financial Statements
(Unaudited)
Note 1 - Allmetal Distribution Building
On February 25, 1999, the Partnership sold the Allmetal Distribution Building
property (the "Property") to the Buyer for a net sales price of approximately
$2,080,000, after deductions for commissions and selling expenses incurred in
connection with the sale of the property. The sale of the property resulted in a
non-recurring gain of approximately $576,000 which represents the difference
between the net sales price and the property's carrying value of approximately
$1,504,000.
The historical financial statements are adjusted to show the effects of the sale
of the Property on the Partnership's operations, assets and liabilities. The Pro
Forma Balance Sheet at September 30, 1998 reflects the financial position of the
Partnership as if the Property had been sold on September 30, 1998. The Pro
Forma Statement of Operations for the nine months ended September 30, 1998
reflects the continued operations of the Partnership as if the Property had been
sold on December 31, 1997. In addition, the Pro Forma Statement of Operations
for the year ended December 31, 1997 reflects the continued operations of the
Partnership as if the Property had been sold on December 31, 1996.
Note 2 - Distributions and Allocations
Distributable Cash from Operations (defined in the Partnership Agreement) is
distributed 5% to the General Partner and the remaining 95% in the following
order of priority: first, to the Investors until they receive a 7%
non-cumulative, non-compounded annual cash return on their Invested Capital
(defined in the Partnership Agreement); second, to the John Hancock Limited
Partner until it receives a 7% non-cumulative, non-compounded annual cash return
on its Invested Capital; and third, to the Investors and the John Hancock
Limited Partner in proportion to their respective Capital Contributions (defined
in the Partnership Agreement). However, any Distributable Cash from Operations
which is available as a result of a reduction in working capital reserves funded
by Capital Contributions of the Investors will be distributed 100% to the
Investors.
Cash from Sales or Refinancings, as defined in the Partnership Agreement, is
first used to pay all debts and liabilities of the Partnership then due and is
then used to fund any reserves for contingent liabilities. Cash from Sales or
Refinancings is then distributed as follows: first, to the Limited Partners
until they receive an amount equal to their Invested Capital with the
distribution being made between the Investors and the John Hancock Limited
Partner in proportion to their respective Capital Contributions; second, to the
Investors until they have received, after giving effect all previous
distributions of Distributable Cash from Operations and any previous
distributions of Cash from Sales or Financings after the return of their
Invested Capital, their Cumulative Return on Investment, as defined in the
Partnership Agreement; third, to the John Hancock Limited Partner until it has
received, after giving effect all previous distributions of Distributable Cash
from Operations and any previous distributions of Cash from Sales or Financings
after the return of their Invested Capital, their Cumulative Return on
Investment, its Cumulative Return on Investment; fourth, to the General Partner
to pay any Subordinated Disposition Fees, as defined in the Partnership
Agreement; and fifth, 99% to the Limited Partners and 1% to the General Partner,
with the distribution being made between the Investors and the John Hancock
Limited Partner in proportion to their respective Capital Contributions.
Cash from the Sale of the last of the Partnership's properties is distributed in
the same manner as Cash from Sales or Refinancings, except that before any other
distribution is made to the Partners, each Partner shall first receive from such
cash, an amount equal to the then positive balance, if any, in such Partner's
Capital Account after crediting or charging to such account the profits or
losses for tax purposes from such sale. To the extent, if any, that a Partner is
entitled to receive a distribution of cash based upon a positive balance in its
capital account prior to such distribution, such distribution will be credited
against the amount of such cash the Partner would have been entitled to receive
based upon the manner of distribution of Cash from Sales or Refinancings, as
specified in the previous paragraph.
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JOHN HANCOCK REALTY INCOME FUND-III LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
Notes to Pro Forma Financial Statements (continued)
(Unaudited)
Note 2 - Distributions and Allocations (continued)
Profits for tax purposes from the normal operations of the Partnership for each
fiscal year are allocated to the Partners in the same amounts as Distributable
Cash from Operations for that year. If such profits are less than Distributable
Cash from Operations for any year, they are allocated in proportion to the
amounts of Distributable Cash from Operations for that year. If such profits are
greater than Distributable Cash from Operations for any year, they are allocated
5% to the General Partner and 95% to the John Hancock Limited Partner and the
Investors, with the allocation made between the John Hancock Limited Partner and
the Investors in proportion to their respective Capital Contributions. Losses
for tax purposes from the normal operations of the Partnership are allocated 1%
to the General Partner and 99% to the John Hancock Limited Partner and the
Investors, with the allocation made between the John Hancock Limited Partner and
the Investors in proportion to their respective Capital Contributions. However,
all tax aspects of the Partnership's payment of the sales commissions from the
Capital Contributions made by the John Hancock Limited Partner are allocated 1%
to the General Partner and 99% to the John Hancock Limited Partner, and not to
the Investors. Depreciation deductions are allocated 1% to the General Partner
and 99% to the Investors, and not to the John Hancock Limited Partner.
Profits and Losses from Sales or Refinancings are generally allocated 99% to the
Limited Partners and 1% to the General Partners. In connection with the sale of
the last of the Partnership's properties, and therefore the dissolution of the
Partnership, profits will be allocated to any Partners having a deficit balance
in their Capital Account in an amount equal to the deficit balance. Any
remaining profits will be allocated in the same order as cash from the sale
would be distributed.
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JOHN HANCOCK REALTY INCOME FUND-III LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Report on Form 8-K to be signed on its behalf by
the undersigned, hereunto duly authorized, on the 19th day of March, 1999.
John Hancock Realty Income Fund-III Limited
Partnership
By: John Hancock Realty Equities, Inc.,
General Partner
By:________________________________
William M. Fitzgerald, President
By:________________________________
Richard E. Frank, Treasurer
(Chief Accounting Officer)
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PURCHASE AND SALE AGREEMENT
THIS AGREEMENT made and entered into as of the __ day of February 1999, by and
between JOHN HANCOCK REALTY INCOME FUND - III LIMITED PARTNERSHIP, a
Massachusetts limited partnership, having its principal address c/o The Real
Estate Investment Group, John Hancock Place, P.O. Box 111, Boston, Massachusetts
02117 (hereinafter "Seller"), and CABOT INDUSTRIAL PROPERTIES, L.P., a Delaware
limited partnership, having an office address of Two Center Plaza, Suite 200,
Boston, Massachusetts 02108-1906 (hereinafter "Buyer");
WITNESSETH THAT:
WHEREAS, Seller desires to sell certain improved real property known as
the Allmetal Distribution Building and located in Carrollton, Texas, along with
certain related personal and intangible property; and
WHEREAS, Buyer desires to purchase such real, personal, and intangible
property in accordance with the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
set forth the parties hereto mutually agree as follows:
1. The Property.
1.1 Description: Subject to the terms and conditions of this
Agreement, and for the consideration herein set forth, Seller agrees to sell and
transfer, and Buyer agrees to purchase and acquire, all of Seller's right,
title, and interest in and to the following (collectively, "the Property"):
1.1.1 Certain land ("the Land") located at 1413
Bradley Lane, Carrollton, Texas, and more specifically described in Exhibit
1.1.1 attached hereto;
1.1.2 The building(s) ("the Building"), parking
areas, improvements, and fixtures now situated on the Land ("the Improvements");
1.1.3 All furniture, personal property, machinery,
apparatus, and equipment currently used in the operation, repair, and
maintenance of the Land and the Improvements and situated thereon, excluding,
however, tangible personal property and fixtures of the Improvements which are
owned by tenants or which may be removed by tenants under the terms of their
leases (collectively, "the Personal Property"). The Personal Property to be
conveyed is subject to depletions, replacements, and additions in the ordinary
course of Seller's business;
1.1.4 All easements, hereditaments, and appurtenances
belonging to or inuring to the benefit of Seller and pertaining to the Land, if
any;
1.1.5 Any street or road abutting the Land to the
center line thereof (to the extent owned by Seller);
1.1.6 The leases or occupancy agreements, including
those in effect on the date of this Agreement which are identified on the
Schedule of Leases attached hereto as Exhibit 1.1.6, and any new leases entered
into pursuant to section 7.3, including all amendments thereto, which as of the
Closing (hereinafter defined) affect all or any portion of the Land or the
Improvements (collectively, "the Leases"), and any security deposits actually
held by Seller with respect to any such Leases;
1.1.7 All service, maintenance, supply, or other
contracts relating to the operation of the Property, including those in effect
as of the date hereof which are
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listed on Exhibit 1.1.7 hereto and any new contracts entered into pursuant to
section 7.2 (together, "the Contracts"), subject to section 5.5 hereof;
1.1.8 The name "Allmetal Distribution Building" (if
available)
1.1.9 All assignable warranties and guaranties issued
in connection with the Improvements or the Personal Property which remain in
effect as of Closing; and
1.1.10 All transferable consents, authorizations,
variances or waivers, licenses, permits, and approvals from any governmental or
quasi-governmental agency, department, board, commission, bureau, or other
entity or instrumentality solely in respect of the Land or the Improvements
which remain valid or in effect as of Closing.
1.2 Agreement to Convey. Seller agrees to convey, and Buyer
agrees to accept, on the Date of Closing: (a) title to the Land and the
Improvements by special warranty deed in the condition described in section 6.1,
and subject to the Permitted Exceptions (hereinafter defined); and (b) title to
the Personal Property, by Bill of Sale (hereinafter defined), without warranty
as to the title or the condition of such personalty.
2. Purchase Price. The Property is to be sold to Buyer for the sum of
$2,180,000.00 ("the Purchase Price"), which Buyer shall pay to Seller on the
Date of Closing by wiring immediately available Federal funds to such bank
account as may be designated by Seller.
3. Deposit. Within three business days after a fully executed copy this
Agreement is given to the Title Company Buyer shall deposit with the Dallas,
Texas office of Chicago Title Insurance Company (attention: Ellen Schwab) (the
"Title Company") the sum of $100,000.00 by official bank cashier's check or by
wire transfer of federal funds simultaneously with the execution of this
Agreement as a good faith deposit (hereinafter, said deposit and such interest
as is earned thereon shall be referred to as "the Deposit"), which Deposit shall
be disposed of in the manner herein provided. If the Closing occurs in
accordance with this Agreement, the Deposit shall either be applied against the
Purchase Price or returned by Seller to Buyer on the Date of Closing, as
hereinafter provided. If this Agreement is terminated, or if either party fails
to perform any of its agreements hereunder, the Deposit shall be disposed of in
the manner hereinafter provided.
4. Closing. Subject to the provisions of this Agreement, the Closing
Documents shall be delivered at 11:00 o'clock A.M., EST, on February 25, 1999
("the Date of Closing"), at the offices of the Title Company, unless otherwise
agreed upon in writing.
5. Buyer's Review.
5.1 Access.
5.1. Seller shall promptly upon the execution hereof
make available to Buyer copies of the Contracts and the Leases. Seller agrees to
allow Buyer or Buyer's agents or representatives reasonable access to the
Property (during business hours) for purposes of any non-intrusive physical or
environmental inspection of the Property and review and copying of the
Contracts, the Leases, Seller's books and records relating to the Property
(other than any privileged, proprietary or confidential records), soil reports,
environmental studies and reports, surveys, building and systems plans, income
and expense statements, and other matters necessary in the reasonable discretion
of Buyer to evaluate and analyze the feasibility of the Property for Buyer's
intended use thereof. Buyer shall not conduct or authorize any physically
intrusive testing of, on, or under the Property without first obtaining Seller's
written consent as to
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the timing and scope of work to be performed, such consent not to be
unreasonably withheld.
5.1.2 Except as otherwise expressly set forth herein,
Seller makes no representations or warranties as to the truth, accuracy, or
completeness of any materials, data, or other information, including without
limitation the contents of Seller's or its property manager's books and records,
marketing materials prepared by Seller or the Broker, the Leases, the Contracts,
rent rolls or income and expense statements, supplied to Buyer in connection
with Buyer's inspection of the Property. It is the parties' express
understanding and agreement that all such materials are provided by Seller
solely for Buyer's convenience in making its own examination and determination
prior to the Approval Date as to whether it wishes to purchase the Property,
and, in making such examination and determination, Buyer shall rely exclusively
on its own independent investigation and evaluation of the Property and not on
any materials supplied by Seller.
5.2 Title and Survey. Seller shall, at Seller's expense,
obtain a commitment by the Title Company to issue an owner's policy of title
insurance insuring the Land and the Improvements ("the Title Commitment"), and
an ALTA survey of the Land prepared by a professional land surveyor licensed in
the state in which the Property is located ("the Survey").
5.3 Buyer's Right to Object or Terminate.
5.3.1 Buyer's Right to Object. Buyer shall have the right,
in its sole discretion, on or before 5:00 p.m. EST on February 15, 1999 ("the
Approval Date") to make written objection to any matter regarding the Property
("Objection Notice"), which notice must specify the reason such matter(s) are
not satisfactory and the curative steps necessary to remove the basis for
Buyer's disapproval. The parties shall then have until the later of ten business
days after the date of the Notice and the Approval Date (whichever is later,
"the Objection Deadline") to make such arrangements or take such steps as they
shall mutually agree to satisfy Buyer's objection(s); provided, however, that
Seller shall have no obligation whatsoever to expend or agree to expend any
funds, to undertake or agree to undertake any obligations, or otherwise to
attempt to cure or agree to attempt to cure any objections, except liens and
encumbrances voluntarily created by Seller, and Seller shall not be deemed to
have any obligation to attempt to cure any such matters unless Seller expressly
undertakes such an obligation by a written notice to or written agreement with
Buyer given or entered into on or prior to the Objection Deadline and which
recites that it is in response to an Objection Notice. Buyer's sole right with
respect to any objections contained in an Objection Notice given in a timely
manner shall be to elect on or before the Objection Deadline to terminate this
Agreement pursuant to section 5.3.2 hereof. All possible objections regarding
title, the Survey, or other matters regarding the Property not included in an
Objection Notice given by Buyer to Seller on or before the Approval Date, or
with respect to which a timely Objection Notice is given but Seller fails to
expressly agree to attempt to cure as provided above, shall be deemed to be
approved by Buyer as "Permitted Exceptions" as provided in section 5.4 hereof.
5.3.2 Buyer's Right to Terminate. In the alternative,
Buyer shall have the right, in its sole discretion, with or without cause, on or
before the Approval Date (if Objection Notice has not been given) or the
Objection Deadline (if Objection Notice has been given), to terminate its
obligation to purchase the Property by giving Seller written notice of
termination ("the Termination Notice"). If the Termination Notice is timely
given, Seller shall direct the Title Company promptly to return the Deposit to
Buyer and neither party shall have any further obligations or liability
hereunder except as expressly set forth in this Agreement, including without
limitation sections 6.2 and 24 hereof. In the event that Buyer does not tender
to Seller the Objection Notice or the Termination Notice prior to the Approval
Date or the Objection Deadline, as applicable: (a) the Deposit shall be
non-refundable; and (b) Buyer shall have no further rights to the
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Deposit, and no further right to terminate this Agreement, except pursuant to
sections 9.1, 13, or 18.1.
5.4 Permitted Exceptions. If this Agreement is not terminated,
Buyer shall be deemed to have approved and to have agreed to purchase the
Property subject to the following (but Seller agrees that the following matters
will not be recited in the special warranty deed):
5.4.1 All possible title objections, survey objections,
and any defects in or to title to the Property or other matters affecting or
relating to the title to, or the survey of, or the condition of the Property
existing as of the Approval Date and not included in an Objection Notice given
by Buyer and/or which Buyer has otherwise approved or is deemed to have approved
pursuant to section 5.3.1 hereof;
5.4.2 All existing Leases, and all Contracts and Leases
which Buyer has approved or is deemed to have approved, or which Seller is
permitted to enter into, pursuant to sections 5.5, and 7.3 hereof;
5.4.3 the lien of non-delinquent real and personal
property taxes and assessments;
5.4.4 rights of parties in possession not shown by the
public records;
5.4.5 discrepancies, conflicts in boundary lines,
shortages in area, encroachments, and any state of facts which an inspection of
the Property would disclose and which are not shown by the public records;
5.4.6 easements or claims of easements, whether or not
shown by the public records;
5.4.7 any service, installation, connection, maintenance
or construction charges due after Closing, and, subject to the proration
provisions hereof, charges for sewer, water, electricity, telephone, cable
television or gas; and
5.4.8 unrecorded leaseholds, rights of vendors and holders
of security interests on personal property installed upon the Property by
tenants, and rights of tenants to remove trade fixtures at the expiration of the
term of the Leases.
All of the foregoing are referred to herein collectively as the "Permitted
Exceptions".
5.5 Contracts. On or before the Approval Date, Buyer shall
notify Seller in writing as to which of the Contracts Buyer elects to assume at
Closing. Seller shall notify the vendors under those Contract(s) which Buyer has
not agreed to assume as of Closing that, provided that Closing occurs hereunder,
Seller shall terminate such Contracts, effective as of the Date of Closing;
provided however if any such non-assumed Contract does not permit Seller to
terminate same within thirty (30) days or requires that Seller pay a fee to
terminate same prior to Closing, Buyer shall be required at Closing to assume
all obligations thereunder until the effective date of the termination and to
assume the obligation to pay, or to reimburse Seller for the payment of, the
termination fee. Seller agrees that it will terminate the existing property
management agreement effectively on or before the Date of Closing.
6. Condition of Premises.
6.1 Except as otherwise expressly set forth herein, Buyer and
Seller agree that Buyer is acquiring the Property in its "AS IS" condition, WITH
ALL FAULTS, IF ANY, AND WITHOUT ANY WARRANTY, EXPRESS OR IMPLIED. Except as
otherwise expressly set forth herein, neither Seller nor any agents,
representatives, or
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employees of Seller have made any representations or warranties, direct or
indirect, oral or written, express or implied, to Buyer or any agents,
representatives, or employees of Buyer with respect to the condition of the
Property, its fitness for any particular purpose, or its compliance with any
laws, and Buyer is not aware of and does not rely upon any such representation
to any other party. Buyer acknowledges that the Purchase Price might be higher
if Buyer were not acquiring the Property in "as is" condition. Buyer
acknowledges that it either has had or will have before the Date of Closing
pursuant to the terms of this Agreement the opportunity to make such inspections
(or have such inspections made by consultants) as it desires of the Property and
all factors relevant to its use, including, without limitation, the interior,
exterior, and structure of all improvements, and the condition of soils and
subsurfaces (particularly with respect to the presence or absence of hazardous
substances).
6.2 After its inspections are completed, Buyer shall restore
the Property to its condition prior to Buyer's inspections. Buyer agrees to
indemnify Seller for all claims or damages arising out of Buyer's inspections,
including, without limitation, claims for personal injury or property damage,
and including all costs and attorneys' fees. The obligations in this paragraph
shall survive the Closing or the termination of this Agreement for any reason,
including without limitation pursuant to section 5.3.2, 9.1, or 13 hereof.
6.3 Excepting the matters set forth in section 8.1, Buyer
hereby releases Seller and its agents, representatives, and employees from any
and all claims, demands, and causes of action, past, present, and future, that
Buyer may have relating to (i) the condition of the Property at any time, before
or after the Date of Closing, including, without limitation, the presence of any
hazardous substance, or (ii) any other matter pertaining to the Property. This
release shall survive the Closing or the termination of this Agreement for any
reason.
7. Prior to Closing.
7.1 Until Closing, Seller or Seller's agents shall:
7.1.1 Insurance. Maintain the types and amounts of
insurance that are in force on the date of execution hereof.
7.1.2 Operation. Operate and maintain the Property
substantially in accordance with Seller's past practices with respect to the
operation of the Property, and deliver the Property to Buyer at Closing in its
present condition, normal wear and tear excepted, subject to section 13 hereof.
7.2 New Contracts. Between the date of this Agreement and the
Date of Closing, Seller will enter into only those Contracts which Seller
believes are necessary to carry out its obligations under section 7.1.2 and
which shall be cancelable on not more than thirty (30) days' written notice. If
Seller enters into any such Contract, it shall promptly provide written notice
thereof to Buyer and unless Buyer, within seven (7) days thereafter, notifies
Seller in writing of Buyer's intention to assume such Contract, it shall be
treated as a non-assumed Contract under section 5.5 hereof.
7.3 New Leases. Between the Approval Date and the Date of
Closing, Seller will not execute any new Leases or materially amend, terminate
(except upon a default by the tenant thereunder), or accept the surrender of any
existing tenancies or approve any subleases without the prior consent of Buyer,
which consent shall not be unreasonably withheld (having in mind commercially
reasonable matters such as the amount of rent, the term, and the use under the
proposed lease, and the proposed tenant's creditworthiness); provided however
that Seller is authorized to accept the termination of Leases at the end of
their existing terms and to expand, extend, or renew any Leases pursuant to
expansion, extension, or renewal options contained therein.
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8. Representations and Warranties.
8.1 Seller represents and warrants to Buyer as follows:
8.1.1 Seller is a limited partnership, duly organized,
validly existing, and in good standing under the laws of the Commonwealth of
Massachusetts and the state in which the Property is located.
8.1.2 Subject to section 9.2 hereof, Seller has all
requisite power and authority to execute and deliver this Agreement and to carry
out its obligations hereunder and the transactions contemplated hereby. This
Agreement has been, and the documents contemplated hereby will be, duly executed
and delivered by Seller and constitute Seller's legal, valid, and binding
obligation enforceable against Seller in accordance with its terms. The
consummation by Seller of the sale of the Property is not in violation of or in
conflict with, nor does it constitute a default under any term or provision of,
the organizational documents of Seller, or any of the terms of any agreement or
instrument to which Seller is a party, or by which Seller is bound, or any
provision of any applicable law, ordinance, rule, or regulation of any
governmental authority or any provision of any applicable order, judgment, or
decree of any court, arbitrator, or governmental authority.
8.1.3 The Leases and, to the best of Seller's knowledge,
the financial information furnished or to be furnished to Buyer by Seller, are
true, correct and complete in all material respects.
8.1.4 To the best of Seller's knowledge, there are no
hazardous materials on the Property which violate any applicable federal or
state environmental laws.
8.1.5 Seller has received no notice of any violation or
alleged violation of any law affecting the Property, and to the best of Seller's
knowledge, no such violation exists.
8.1.6 Seller has received no notice of any pending or
threatened litigation or governmental proceeding against the Property, and to
the best of Seller's knowledge, no such litigation or proceeding exists.
8.1.7 All of the Leases are in full force and effect and
all tenants are paying rent, as provided in the Leases, and to the best of
Seller's knowledge, neither the Seller nor any tenant is default under any
Lease.
8.2 Buyer represents and warrants to Seller as follows:
8.2.1 Buyer is a limited partnership, duly organized,
validly existing, and in good standing under the laws of Delaware and the state
in which the Property is located.
8.2.2 Buyer has all requisite power and authority to
execute and deliver this Agreement and to carry out its obligations hereunder
and the transactions contemplated hereby. This Agreement has been, and the
documents contemplated hereby will be, duly executed and delivered by Buyer and
constitute its legal, valid, and binding obligation enforceable against it in
accordance with its terms, and the consummation and performance by Buyer of the
transactions contemplated herein will not result in a violation of or be in
conflict with or constitute a default under any term or provision of the
organizational documents of Buyer, or any of the terms of provisions of any
agreement or instrument to which it is a party, or by which it is bound, or of
any term of any applicable law, ordinance, rule or regulation of any
governmental authority
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or of any term of any applicable order, judgment, or decree of any court,
arbitrator, or governmental authority.
8.3 The above-stated representations and warranties will
survive the Closing for a period of six months, before the expiration of which
the party claiming a breach must have filed an action in a court of competent
jurisdiction, and any representation and warranty not specified in such action
shall expire. Any such claim shall be limited to actual damages (specifically
including reasonable attorneys' fees and expenses and court costs) suffered by
the claiming party (specifically excluding consequential, punitive, or other
damages), and in no event shall the aggregate of such damages exceed
$200,000.00. Buyer acknowledges that Seller has maintained no employees at the
Property and that the Property has during Seller's ownership thereof always been
managed by a third-party manager, and that Seller has relied upon such manager
for knowledge and notice. The words "to the best of Seller's knowledge" in
section 8.1 mean to the actual knowledge of Scott E. Morrow, the employee of
Seller's general partner who is most familiar with the Property and who have had
the most contact with the management company.
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9. Conditions Precedent.
9.1 Representations and Warranties. Each party's obligation to
close hereunder shall be conditioned upon the truth in all material respects as
of the Date of Closing of the other party's representations and warranties set
forth in section 8 hereof. If on the Date of Closing a representation and
warranty is not true, and such representation and warranty either was not true
on the date of this Agreement, or was true on the Date of this Agreement but has
become untrue as a result of a breach of this Agreement by the party making the
representation hereunder, the other party may either seek its remedy pursuant to
section 18 hereof, waive this condition and proceed to Closing, or terminate
this Agreement by notice to the representing party. If on the Date of Closing a
representation and warranty is not true, and such representation and warranty
was true on the date of this Agreement and has become untrue not as a result of
a breach of this Agreement by the representing party, the other party may either
waive this condition and proceed to Closing or terminate this Agreement by
notice to the representing party. Upon the representing party's receipt of
notice of termination pursuant to this section 9.1, the Deposit shall be
refunded and this Agreement shall terminate, and neither party shall be liable
to the other for damages or otherwise except as otherwise expressly provided
herein.
9.2 Seller's Approvals. Seller's obligation to close hereunder
shall be conditioned upon the approval of this transaction by Seller's internal
committees. If on or before the Approval Date Seller has not notified Buyer that
such approval has been granted, such approval shall be deemed not to have been
granted, and the Deposit shall be refunded and this Agreement shall terminate,
and neither party shall be liable to the other for damages or otherwise except
as otherwise expressly provided herein; provided, however, that Seller shall
reimburse Buyer for Buyer's reasonable due diligence expenses in an amount not
to exceed $10,000.00.
10. Adjustments and Prorations.
10.1 All taxes, including, without limitation, real estate
taxes and personal property taxes, collected rents, charges for utilities,
including water, sewer, and fuel oil, and for utility services, maintenance
services, maintenance and service contracts, all operating costs and expenses,
and all other income, costs, and charges of every kind which in any manner
relate to the operation of the Property (but not including insurance premiums)
shall be prorated to the Date of Closing, except that if Seller does not receive
the Purchase Price (by receipt of wired funds or by receipt in hand of an
official bank cashier's check) by 2:00, EST, on the Date of Closing, all
prorations shall be made as of the following business day. If the amount of said
taxes, assessments, or rents is not known on the Date of Closing, they shall be
apportioned on the basis of the amounts for the preceding year, with a
reapportionment as soon as the new amounts can be ascertained. If such taxes and
assessments shall thereafter be reduced by abatement, the amount of such
abatement, less the reasonable cost of obtaining the same, shall be apportioned
between the parties, provided that neither party shall be obligated to institute
or prosecute proceedings for an abatement unless otherwise agreed. Buyer shall
be responsible for the payment of any assessments or notice of assessments made
after the date of execution hereof for any public improvement, provided Buyer
takes title hereunder. With respect to security deposits, if any, made by
tenants at the Property and actually received in hand by Seller, Buyer shall
receive credit therefor in the proration of rents. Any deposits on utilities
paid by Seller shall be returned to Seller. The foregoing provisions of this
section shall not apply to any taxes, assessments, or other payments, which are
directly payable by tenants under their leases or reimbursable by such tenants
to the owner of the Property, as landlord, under their leases. On the Date of
Closing, Seller shall deliver to Buyer all inventories of supplies on hand at
the Property owned by Seller, if any, at no additional cost to Buyer.
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10.2 Post-Closing Collections. Buyer shall use commercially
reasonable efforts during the twelve (12) month period immediately following the
Closing to collect and promptly remit to Seller rents or other amounts due
Seller for the period prior to Closing. Buyer shall apply all rents or other
amounts received by Buyer, first for the account of Buyer for amounts currently
due to Buyer; second to Seller for any and all amounts due Seller for periods
prior to Closing; and the balance to be retained by Buyer.
11. Closing Documents.
11.1 Seller's Deliveries. Conditioned upon performance by
Buyer hereunder, Seller shall execute and deliver to Buyer at the Closing the
following documents ("Seller's Closing Documents"):
11.1.1 Deed. A special warranty deed conveying marketable
title to the Land and the Improvements subject to the Permitted Exceptions.
11.1.2 Bill of Sale. A bill of sale, assigning and
transferring to Buyer all of the right, title, and interest of Seller in and to
the Personal Property.
11.1.3 Assignment of Leases. (i) The Leases which are
still in effect as of Closing and any new Leases entered into pursuant to
section 7.3; (ii) a current listing of any tenant security deposits and prepaid
rents held by Seller with respect to the Property; and (iii) an assignment of
such Leases and security deposits, which will include an indemnification by
Seller of Buyer for all landlord obligations accruing prior to the Date of
Closing.
11.1.4 Assignment of Contracts. (i) Copies of all
Contracts relating to the Property which Buyer has elected to assume or which
are not terminable by Seller on or before the Date of Closing; and (ii) an
assignment of such Contracts, which will include an indemnification by Seller of
Buyer for all owner obligations accruing prior to the Date of Closing.
11.1.5 Non-Foreign Certificate. A certification that
Seller is not a non-resident alien (a foreign corporation, partnership, trust,
or estate as defined in the Internal Revenue Code and Treasury Regulations
promulgated thereunder).
11.1.6 Assignment of Warranties and Guaranties. An
assignment of all transferable warranties and guaranties then in effect, if any,
with respect to the Improvements or any repairs or renovations to such
Improvements and the Personal Property being conveyed hereunder.
11.1.7 Books and Records. All books and records held at
the Property by or for the account of Seller (other than any privileged,
proprietary or confidential records), including without limitation plans and
specifications and lease applications, as available.
11.1.8 Owner's Affidavit. An Owner's Affidavit and such
other similar documents as are reasonably required from Seller pursuant to the
Title Commitment as a condition precedent to the issuance of an owner's title
insurance policy pursuant to the terms thereof.
11.1.9 Tenant Estoppel Certificates. Estoppel Certificates
executed by the tenants under the Leases, dated not later than fifteen (15) days
prior to the Date of Closing, and in all material respects consistent with the
rent roll furnished to the Buyer.
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11.2 Buyer's Deliveries. Conditioned upon performance by
Seller hereunder, Buyer shall execute and deliver to Seller at the Closing the
following documents:
11.2.1 Assumption of Leases. An assumption of the Leases
and security deposits, which will include an indemnification by Buyer of Seller
for all landlord obligations accruing on or after the Date of Closing.
11.2.2 Assumption of Service Contracts. An assumption of
the Contracts which Buyer has elected to assume, which will include an
indemnification by Buyer of Seller for all owner obligations accruing on or
after the Date of Closing.
11.3 Other Closing Documents. Each party shall deliver to the
other party or the Title Company such duly executed and acknowledged or verified
certificates, affidavits, and other usual closing documents respecting the power
and authority to perform the obligations hereunder and as to the due
authorization thereof by the appropriate corporate, partnership, or other
representatives acting for it, as counsel for the other party or the Title
Company may reasonably request.
12. Costs. Buyer shall pay all settlement expenses, except as set forth
in the following sentence, in connection with the transfer of the Property,
including, but not limited to, real estate transfer taxes, personal property
sales taxes, if any, recording fees, Buyer's attorneys' fees, and all other
costs and expenses incidental to or in connection with closing this transaction.
Seller shall pay only the attorneys' fees, if any, incurred by Seller in
connection with this transaction, the costs of obtaining a survey, a title
insurance commitment and the premium for the Buyer's owner's policy of title
insurance and the Broker's commission, but only if, as, and when the transaction
contemplated hereby is fully consummated and the deed is recorded and the full
consideration therefor has been received by Seller.
13. Casualty or Condemnation. In the event that prior to the Date of
Closing either the Improvements are damaged or destroyed, in whole or in part,
by fire or other cause, or any portion of the Land or the Improvements becomes
the subject of a condemnation proceeding by a public or quasi-public authority
having the power of eminent domain, then either (a) the parties shall proceed
with the transaction contemplated herein, in which event Buyer shall be entitled
to receive any insurance proceeds (and, if the loss is five percent (5%) or less
of the Purchase Price, an amount equal to any deductible under the Seller's
casualty insurance policy) or condemnation awards, or (b) in the event such
damage, destruction, or condemnation involves, in the reasonable estimation of
Seller, a loss in an amount in excess of five per cent (5%) of the Purchase
Price, or loss of all or a material portion of access to the Property, Buyer, at
its option, may terminate this Agreement by notice to the other within ten (10)
days of Buyer's receipt of Seller's notice of such damage or proceeding, in
which case the Deposit shall be refunded, and thereafter neither party shall
have any further obligation or liability to the other by virtue of this
Agreement, except as otherwise expressly provided herein.
14. Insurance. Seller shall not be obligated to assign to Buyer any
fire, hazard, or liability insurance policies which it holds respecting the
Property, and Seller shall have the right to any and all refunds or rebates
resulting from the termination of such policies.
15. Broker's Commission. Buyer and Seller each hereby warrants and
represents to the other that it has dealt with no broker or finder in connection
with this transaction except CB Richard Ellis, Inc. ("the Broker"), and that it
is not affiliated with the Broker in any way. Buyer and Seller each hereby
agrees to indemnify and hold the other harmless from and against any and all
claims for brokerage or finder's fees or other similar commissions or
compensation made by any and all other brokers or finders claiming to have dealt
with the indemnifying party in connection with this
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Agreement or the consummation of the transaction contemplated hereby. The
obligations in this section shall survive the Closing or the termination of this
Agreement for any reason, including without limitation pursuant to section
5.3.2, 9.1, or 13 hereof.
16. Seller's Performance. The acceptance of Seller's Closing Documents
by Buyer shall be deemed to be a full performance and discharge of every
agreement and obligation of Seller herein contained and expressed, except such
as are, by the terms hereof, to be performed after the delivery of said
instruments.
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17. Recording Prohibited. This Agreement shall not be recorded with
Deed Records of Dallas County or in any other office or place of public record.
If Buyer shall record this Agreement or cause or permit the same to be recorded,
Seller may, at its option, elect to treat such act as a default by Buyer under
this Agreement.
18. Remedies.
18.1 If Seller defaults under this Agreement, Buyer's sole remedy,
at law or in equity, shall be one of either (a) the return of the Deposit to
Buyer, whereupon the obligations of Seller under this Agreement shall terminate;
or (b) the right to obtain specific performance of Seller's obligation to convey
the Property pursuant to this Agreement, provided that in no event shall Seller
be obliged to undertake any of the following: (i) change the condition of the
Property or restore the same after any fire or casualty; (ii) expend money or
post a bond to remove or insure over a title defect or encumbrance or to correct
any matter shown on a survey of the Property; (iii) secure any permit, approval,
or consent with respect to the Property or Seller's conveyance, or (iv) cure
defects objected to by Buyer pursuant to section 5.3.1 hereof. In no event shall
any officer, director, employee, agent, or representative of Seller have any
personal liability in connection with this Agreement or transaction.
18.2 If Buyer defaults under this Agreement, the sole remedy of
Seller shall be to retain the Deposit, which sum the parties fix and settle as
liquidated damages for such default of Buyer.
18.3 Nothing in this section 18 shall limit the express provisions
of this Agreement obligating one party hereto to indemnify the other or to
restore the Property, including without limitation sections 6.2 and 24 hereof.
18.4 In any action to enforce the provisions of this Agreement, the
prevailing party shall be entitled to an award of its attorneys' fees and costs.
19. Assignment. This Agreement may not be assigned by Buyer without the
express written consent of Seller, which consent Seller may in its sole
discretion withhold, except that Buyer may, without Seller's consent, assign
this Agreement to a limited partnership of which Buyer (or a principal of Buyer)
or any parent or any majority owned subsidiary of Buyer are the sole general
partners. No such assignment shall operate to relieve Buyer from any obligation
hereunder.
20. Waiver. No waiver of any breach of any agreement or provision
contained herein shall be deemed a waiver of any preceding or succeeding breach
of any other agreement or provision herein contained. No extension of time for
the performance of any obligation or act shall be deemed an extension of time
for the performance of any other obligation or act.
21. Time. It is agreed that time is of the essence of this Agreement.
22. Governing Law. This Agreement shall be construed under the laws of
the state in which the Property is located.
23. Notices. All notices required or permitted to be given hereunder
shall be in writing and sent by overnight delivery service (such as Federal
Express), in which case notice shall be deemed given on the day after the date
sent, or by personal delivery, in which case notice shall be deemed given on the
date received, or by certified mail, in which case notice shall be deemed given
three (3) days after the date sent, or by fax (with copy by overnight delivery
service), in which case notice shall be deemed given on the date sent, to the
appropriate address indicated below or at such other place or places as either
Buyer or Seller may, from time to time, respectively, designate in a written
notice given to the other in the manner described above.
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To Seller: c/o The Real Estate Investment Group
John Hancock Place, P.O. Box 111
Boston, MA 02117
Attention: Scott E. Morrow
Fax No.: (617) 572-3860 or 3866
Telephone No.: (617) 572-3835
With Copy To: John Hancock Mutual Life Insurance Company
Law Department (T-50)
John Hancock Place, P.O. Box 111
Boston, MA 02117
Attention: Walter Boldys
Fax No.: (617) 572-9268 or 9269
Telephone No.: (617) 572-9236
To Buyer: Cabot Industrial Trust
Two Center Plaza, Suite 200
Boston, MA 02108-1906
Attention: Andrew D. Ebbott
Fax No.: (617) 722-8237
Telephone No.: (617) 723-0900
With Copy to: M. Marvin Katz
Mayer, Brown & Platt
700 Louisiana, Suite 3600
Houston, TX 770022
Fax No.: (713) 224-6410
Telephone No.: (713) 546-0513
24. Confidentiality. Buyer shall not disclose the financial and
economic terms and conditions of the transaction contemplated herein except as
may be necessary in the ordinary course of its business. All press releases or
other dissemination of information to the media, or responses to requests from
the media, for information relating to the transaction contemplated herein shall
be subject to the prior written approval of Seller; provided that, following the
Closing, Seller's approval shall not be unreasonably withheld or delayed. The
obligations in this section shall survive the Closing or termination of this
Agreement for any reason.
25. Entire Agreement. This instrument, executed in duplicate, sets
forth the entire agreement between the parties and may not be canceled,
modified, or amended except by a written instrument executed by both Seller and
Buyer.
26. Counterparts. This Agreement may be executed and delivered in any
number of counterparts, each of which so executed and delivered shall be deemed
to be an original and all of which shall constitute one and the same instrument.
27. Limitation of Liability. Any obligation or liability whatsoever of
Buyer which may arise at any time under this Agreement or any obligation or
liability which may be incurred by Buyer pursuant to any other instrument,
transaction or undertaking contemplated hereby shall not be personally
enforceable against the trustees, shareholders, officers, employees or agents of
the Buyer, regardless of whether such obligation or liability is in the nature
of contract, tort or otherwise. The seller agrees to look solely to the property
of the Buyer for the satisfaction of any obligation or liability of Buyer.
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IN WITNESS WHEREOF, the parties hereto have caused these presents to be
executed the day and year first above written.
SELLER:
JOHN HANCOCK REALTY INCOME FUND -
III LIMITED PARTNERSHIP
BY: John Hancock Realty Equities, Inc.,
Its General Partner
By: _____________________________
Scott E. Morrow,
Assistant Vice President
BUYER:
CABOT INDUSTRIAL PROPERTIES, L.P., a
Delaware limited partnership
BY: Cabot Industrial Trust, a Maryland real
estate investment trust, its General
Partner
By:______________________________
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EXHIBIT 1.1.1
PROPERTY DESCRIPTION
Tract 1:
BEING a tract of land in the Josiah Ashlock Survey, Abstract No. 24, Denton
County, Texas, and being out of Block F of Trinity Mills - IH 35 Business Park
Section Two, an Addition to the City of Carrollton as recorded in Volume C, Page
24 of the Map Records of Denton County, Texas and being more particularly
described as follows:
BEGINNING at an iron rod found at the most Southerly and Easterly point of 5.0
foot corner clip at the intersection of the South line of Bradley Lane (60 foot
wide right-of-way), West line of Dickerson Parkway (140 foot right-of-way);
THENCE South 1 degree 13 minutes 00 seconds East along, said West line, a
distance of 326.50 feet to an iron rod found for corner being on the centerline
of a railroad, drainage, and public utility easement (63.0 feet wide) as
recorded in Volume 1058, Page 575, Deed Records, Denton County, Texas;
THENCE South 88 degrees 47 minutes 00 seconds West, along said centerline, a
distance of 397.00 feet to an iron rod set for corner;
THENCE North 1 degree 13 minutes 00 seconds West, departing said centerline, a
distance of 331.50 feet to a 60d nail found for corner, being on the South line
of said Bradley Lane;
THENCE North 88 degrees 47 minutes 00 seconds East along said South line, a
distance of 392.00 feet to a set iron rod being the most Northerly and Westerly
point of said corner clip;
THENCE South 46 degrees 13 minutes 00 seconds East a distance of 7.07 feet to
the POINT OF BEGINNING AND CONTAINING 131,593 square feet or 3.021 acres of
land, more or less.
NOTE: SELLER DOES NOT REPRESENT THAT THE ABOVE ACREAGE AND/OR SQUARE FOOTAGE
CALCULATIONS ARE CORRECT.
Tract 2: (Easement)
A non-exclusive easement interest in common with Grantor, its successors and
assigns, as created in that certain easement recorded in Volume 1058, Page 575,
Deed Records, Denton County, Texas, to the extent such easement runs with the
above described property, and covering the land described as follows:
Parcel A
BEING a tract of land situated in the Josiah Ashlock Survey, Abstract No. 24 in
the City of Carrollton, Denton County, Texas and being more particularly
described as follows:
BEGINNING at a point that is South 88 degrees 47 minutes 00 seconds West, 215.80
feet from the point of intersection of the West line of Eisenhower Street (a 60
foot right-of-way) with the North line of Trinity Mills - IH 35 Business Park,
Section One an addition to the City of Carrollton according to the map thereof,
recorded in Volume 80141, Page 1069, Deed Records, Dallas County, Texas and in
Plat Cabinet B, Page 225-227, Map Records, Denton County, Texas;
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THENCE South 88 degrees 47 minutes 00 seconds West, 75.54 feet continuing along
the said North line of Trinity Mills - IH 35 Business Park Section One;
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DESCRIPTION
THENCE NORTH 49 degrees 20 minutes 06 seconds East, 455.00 feet to a point for
corner;
THENCE South 01 degrees 13 minutes 00 seconds East, 62.16 feet to a point for
corner;
THENCE South 49 degrees 20 minutes 06 seconds West, 357.17 feet to the POINT OF
BEGINNING and containing 0.447 acres or 19,492 square feet of land, more or
less.
NOTE: COMPANY DOES NOT REPRESENT THAT THE ABOVE ACREAGE AND/OR SQUARE FOOTAGE
CALCULATIONS ARE CORRECT.
Parcel B:
BEING a tract of land situated in the Josiah Ashlock Survey, Abstract No. 24 in
the City of Carrollton, Denton County, Texas and being more particularly
described as follows:
COMMENCING at a point that is the Northeast corner of Trinity Mills IH - 35
Business Park, Section One, an addition to the City of Carrollton as recorded in
Volume 80141, Page 1069, Deed Records, Dallas County, Texas and in Plat Cabinet
B, Page 225-227, Map Records, Denton County, Texas;
THENCE South 88 degrees 47 minutes 00 seconds West, 140.00 feet;
THENCE North 1 degree 13 minutes 0 seconds West, 331.50 feet to the POINT OF
BEGINNING;
THENCE South 88 degrees 47 minutes 00 seconds West, 1,649.00 feet to a point for
corner;
THENCE North 01 degrees 13 minutes 00 seconds West, 31.50 feet to a point for
corner;
THENCE North 88 degrees 47 minutes 00 seconds East, 1,649.30 feet to a POINT for
corner;
THENCE South 01 degrees 13 minutes 00 seconds East, 31.50 feet to the POINT OF
BEGINNING and containing 1.193 acres or 51,953 square feet of land, more or
less.
NOTE: SELLER DOES NOT REPRESENT THAT THE ABOVE ACREAGE AND/OR SQUARE FOOTAGE
CALCULATIONS ARE CORRECT.
Tract 3: (Easement)
A non-exclusive easement interest in common with Grantor, its successors and
assigns, as created in that certain easement recorded in Volume 1058, Page 578,
Deed Records, Denton County, Texas, to the extent such easement runs with the
above described property, covering the land described as follows:
BEING a tract of land situated in the Josiah Ashlock Survey, Abstract No. 24 in
the City of Carrollton, Denton County, Texas and being more particularly
described as follows:
COMMENCING at a point that is the Northeast corner of Trinity Mills IH-35
Business Park, Section One, an addition to the City of Carrollton as recorded in
Volume 80141, Page 1069 of the Deed Records of Dallas County, Texas, and in Plat
Cabinet "B" at Page 225-227 of the Map Records of Denton County, Texas;
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THENCE South 88 degrees 47 minutes 00 seconds West, 140.00 feet;
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THENCE North 1 degree 13 minutes 00 seconds West, 300.00 feet to the POINT OF
BEGINNING;
THENCE South 88 degrees 47 minutes 01 seconds West, 1405.05 feet to the
beginning of a curve to the left having a central angle of 34 degrees 05 minutes
22 seconds and a radius of 435.78 feet;
THENCE along said curve 259.27 feet to the end of said curve;
THENCE North 1 degree 13 minutes 00 seconds West, 106.33 feet to a point for a
corner;
THENCE North 88 degrees 47 minutes 00 seconds East, 1649.30 feet to a point for
a corner;
THENCE South 1 degree 13 minutes 00 seconds East, 31.50 feet to the POINT OF
BEGINNING and containing 57,823 square feet or 1.327 acres of land, more or
less.
NOTE: SELLER DOES NOT REPRESENT THAT THE ABOVE ACREAGE AND/OR SQUARE FOOTAGE
CALCULATIONS ARE CORRECT.
Tract 4: (Easement)
A non-exclusive easement for vehicular ingress and egress as created in that
certain Reciprocal Easement Agreement recorded in Volume 1781, Page 448, Deed
Records of Denton County, Texas, to the extent such easement runs with the above
described property, covering the land described as follows:
BEING the Easternmost seventeen feet (17') of the property described as follows:
BEING a tract of land of the Josiah Ashlock Survey, Abstract No. 24, Denton
County, Texas, and being out of Block F of Trinity Mills - IH 35 Business Park,
Section Two, an addition to the City of Carrollton as recorded in Volume C, Page
24, Map Records, Denton County, Texas, and more particularly described as
follows:
BEGINNING at a set "x" on the South line of Bradley Lane (60 foot right-of-way),
said point being 392.00 feet North 88 degrees 47 minutes East from the Easterly
most point of a 5 foot corner clip at the intersection of the said South line
and the East line of Eisenhower Street (60 foot right-of-way);
THENCE North 88 degrees 47 minutes 00 seconds East along the said South line a
distance of 855.30 feet to a found nail for a corner;
THENCE South 1 degree 13 minutes 00 seconds East, departing said South line a
distance of 331.50 feet to a point for corner being on the centerline of a
railroad, drainage and public utility easement (63.0 feet wide) as recorded in
Volume 1058, Page 575, Deed Records, Denton County, Texas;
THENCE South 88 degrees 47 minutes 00 seconds West along the said centerline of
855.30 feet to a point for a corner;
THENCE North 1 degree 13 minutes 00 seconds West departing said centerline a
distance of 331.50 feet to the POINT OF BEGINNING AND CONTAINING 283,532 square
feet or 6.509 acres of land, more or less.
NOTE: SELLER DOES NOT REPRESENT THAT THE ABOVE ACREAGE AND/OR SQUARE FOOTAGE
CALCULATIONS ARE CORRECT.
<PAGE> 20
EXHIBIT 1.1.6
Leases
Lease by and between The Travelers Insurance Company, as Landlord, and Allmetal,
Inc., as Tenant, dated May 17, 1991, as amended by Amendment to Lease Agreement
by and between Seller, as Landlord, and Allmetal, Inc., as Tenant, dated as of
July 17, 1997.
<PAGE> 21
EXHIBIT 1.1.7
SERVICE CONTRACTS
1413 BRADLEY LANE
As of 10/1/98
Landscaping Contract:
Contractor: VMC Landscape Services
Address: 2561 Merrell Drive
Address: Dallas, TX 75229
Telephone: (972) 481-1616
Contact: Mark Slicker
Effective Date: 2/8/98
Term: 1 year
Cancellation
Terms: 30 day cancellation with 48 hour Cancellation in
the event of a sale of the property
Costs: $463/ month
Comments: Service contract for mowing, edging,
fertilization, trimming, weed control within the
property line. Contract also provides three
seasonal color changes per year.
Sweeping Contract:
Contractor: Majestic Cleaning Services, Inc.
Address: 1000 Post and Paddock, Suite 405
Address: Grand Prairie, Texas 75050
Telephone: (972) 660-5440
Contact: Peter Salondikis
Effective Date: 3/1/98
Term: 1 year
Cancellation
Terms: 30 day cancellation with 48 hour cancellation in
the event of a sale of the property
Costs: $35/month, which includes two sweeps a month.
Comments: Service has been good.
Exterior Window Cleaning Contract:
Contractor: Task Services
Address: 1105 Recan
Address: Bonham, TX 75418
Telephone: (903) 583-5985
Contact: Joe Shellman
Effective Date: 1/1/93
Term: MTM
Cancellation
Terms: 30 day cancellation required
Costs: $44/quarter for exterior window cleaning.
Comments: Service has been good.
<PAGE> 22
Exterior Grounds Policing:
Contractor: D Box Commercial Property Maintenance Services
Address: P.O. Box 667
Address: Euless, TX 76039
Telephone: (817) 488-1309
Contact: Dennis Box
Effective Date: 9/28/98
Term: 1 year
Cancellation
Terms: 30 day cancellation with 48 hour cancellation in
the event of a sale of the property
Costs: $145.16/month for exterior trash pick ups and
broom sweeping twice per week
Comments: Service has just started
