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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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) September 22, 1998
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United Investors Realty Trust
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(Exact Name of Registrant as Specified in its Charter)
Texas 001-13915 76-0265701
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(State or other jurisdiction of (Commission (IRS Employer
incorporation or organization) File Number) Identification No.)
5847 San Felipe, Suite 850
Houston, TX 77057
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (713) 781-2860
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N.A.
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(Former name or former address, if changed since last report)
<PAGE>
Item 2. Acquisition or Disposition of Assets
On September 22, 1998, United Investors Realty Trust (the "Registrant") acquired
the Highland Square Shopping Center located in Sugar Land, Texas (a suburb of
Houston) (the "Property"). The Property was purchased pursuant to a Contract of
Sale dated June 4, 1998. The Property, an approximately 64,000 square foot
community shopping center, was purchased from Highland Square Partners, Ltd. for
$7.65 million. The property was acquired with available cash of approximately,
$3.2 million and by taking title subject to an existing loan having a principal
balance outstanding on the date of closing of approximately $4.4 million.
Interest on this loan is payable at the rate of 8.87% per annum. This loan
matures on December 1, 2006 and may be prepaid on or after December 1, 2001 with
a yield maintenance based penalty with a minimum of one percent of the then
outstanding principal balance. The Registrant intends to continue to operate the
Property as a shopping center.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements.
It is impracticable to provide the required financial statements of
Highland Square Shopping Center at this time. The required financial
statements of Highland Square Shopping Center will be filed by
amendment as soon as practicable, but not later than December 6, 1998.
(b) ProForma Financial Information.
It is impracticable to provide the required pro forma financial
information for Highland Square Shopping Center at this time. The
required pro forma financial information of Higland Square Shopping
Center will be filed by amendment as soon as practicable, but not
later than December 6, 1998.
(c) Exhibits.
The Exhibits to this report are listed on the Exhibit Index set forth
elsewhere herein.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, on October 7, 1998.
UNITED INVESTORS REALTY TRUST
By: /s/ R. Steven Hamner
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R. Steven Hamner
Vice President, Chief Financial Officer
Number and Description of Exhibit:
10.35 Contract of Sale dated June 4, 1998, by and between the Registrant
and Highland Square Partners, Ltd.
10.36 Promissory note dated as of November 26, 1996 made by Highland Square
Partners, Ltd. to Belgravia Capital Corporation, as beneficiary in the
principal amount of $4,525,000.
<PAGE>
Exhibit 10.35:
REAL ESTATE PURCHASE
AND SALE AGREEMENT
by and between
HIGHLAND SQUARE PARTNERS, LTD.
and
UNITED INVESTORS REALTY TRUST
Dated as of June 4, 1998
for
HIGHLAND SQUARE SHOPPING CENTER
(Sugar Land, Texas)
<PAGE>
TABLE OF CONTENTS
Page
1. AGREEMENT FOR PURCHASE AND SALE................................... 1
2. PURCHASE PRICE AND EARNEST MONEY....................................2
3. CLOSING........................................................... 2
4. ESCROW............................................................ 2
5. CONVEYANCE........................................................ 2
6. TITLE COMMITMENT.................................................. 3
7. SURVEY............................................................ 3
8. REPRESENTATIONS AND WARRANTIES.................................... 4
9. SELLER'S COVENANTS................................................ 6
10. PURCHASER'S CONDITIONS TO CLOSING................................. 7
11. DELIVERY OF DOCUMENTS.............................................. 8
12. FIRE OR CASUALTY.................................................. 10
13. CONDEMNATION...................................................... 11
14. ADJUSTMENTS AND PRORATIONS........................................ 11
15. CLOSING COSTS..................................................... 12
16. POSSESSION........................................................ 12
17. DEFAULT........................................................... 13
18. NOTICES........................................................... 13
19. BROKERS........................................................... 14
20. LEASING COMMISSIONS, MANAGEMENT FEES AND EMPLOYEES................ 14
21. "AS IS" SALE...................................................... 14
22. OFFER AND ACCEPTANCE.............................................. 15
23. MISCELLANEOUS..................................................... 15
24. ASSUMPTION OF EXISTING FINANCING...................................17
<PAGE>
Exhibits
A - Legal Description of Land
B - List of Equipment, Fixtures and Personal Property
C - Rent Roll
D - List of Contracts
E - List of Licenses
F - Escrow Instructions
G-1 - General Warranty Deed
G-2 - Bill of Sale
G-3 - Assignment of Contracts, Licenses, Leases and Intangibles
H - Disclosure of Lease Matters/Pending Commissions
I - Tenant Estoppel Letter
J - Recertification of Representations and Warranties
K - Mortgage Note
<PAGE>
REAL ESTATE PURCHASE AND SALE AGREEMENT
Summary Statement
This Summary Statement is attached to and made a part of that certain Real
Estate Purchase and Sale Agreement dated as of the 4th day of June, 1998 by
and between the Seller and Purchaser referenced below.
1. DATE OF AGREEMENT: June 4, 1998
2. SELLER: Highland Square Partners, Ltd.
3. PURCHASER: United Investors Realty Trust
4. PROPERTY DESCRIPTION:
a) Address 3100 Texas Highway 6 South, Sugar Land, Texas
b) Nature of Improvements: one (1) story retail shopping center
c) Rentable Square Footage: 64,171 square feet
d) Parking: 281 spaces
5. PURCHASE PRICE: $7,750,000.00
6. EARNEST MONEY: $50,000.00
7. ADDITIONAL EARNEST MONEY: N/A
8. APPROVAL DATE: 30 days from the date this Agreement becomes effective
pursuant to Section 22 below
9. CLOSING DATE: 30 days after Approval Date
10. TITLE COMPANY: Safeco Land Title Company
Suite 500, 8080 N. Central Expressway
Dallas, Texas 77206
Attn: Maggie Fielding
11. PURCHASER'S MAILING Suite 850, 5847 San Felipe
ADDRESS: Houston, Texas 77057-3008
Attn: Randall D. Keith
Telecopy: (713) 270-6285
with a copy to:
Merton B. Goldman
James, Goldman & Haugland, P.C.
8th Floor, Chase Tower
201 E. Main Drive
El Paso, Texas 79901-1334
Telecopy: (915) 541-6440
12. BROKERS: N/A
13. GOVERNING STATE LAW: Texas
<PAGE>
REAL ESTATE PURCHASE AND SALE AGREEMENT
THIS REAL ESTATE PURCHASE AND SALE AGREEMENT ("Agreement") is made and
entered into as of this 4th day of June, 1998 by and between Highland Square
Partners, Ltd., a Texas limited partnership ("Seller"), and United Investors
Realty Trust, a Texas real estate investment trust ("Purchaser").
RECITALS
A. Seller is the owner of certain real property legally described in
Exhibit "A" attached hereto (the "Land") and all buildings, fixtures and other
improvements situated on the Land (collectively, the "Improvements"), said Land
and the Improvements are described on Line 4 of the preceding Summary Statement
which is attached to and incorporated into this Agreement (the "Summary
Statement").
B. Seller desires to sell to Purchaser, and Purchaser desires to
purchase from Seller, the Land and the Improvements, together with all of the
other property and interests of Seller described in Section 1 below, subject to
the terms and conditions contained herein.
AGREEMENTS
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Seller and Purchaser agree as
follows:
Seller agrees to sell, and Purchaser agrees to purchase, subject to the terms
and conditions contained herein, the Land and the Improvements, together with:
(a) (i) all of Seller's right, title and interest in and to
all rights of way, tenements, hereditaments, easements, rights,
interests, claims, minerals and mineral rights, water and water rights,
utility capacity and appurtenances, if any, in any way belonging or
appertaining to the Land and the Improvements and (ii) all of Seller's
right, title and interest in and to all adjoining streets, alleys,
private roads, parking areas, curbs, curb cuts, sidewalks, landscaping,
signage, sewers and public ways (collectively, the "Appurtenant
Rights"); and
(b) all equipment and fixtures owned by Seller attached to the
Improvements and located at and used in connection with the ownership,
operation and maintenance of the Land or the Improvements, including
without limitation all heating, lighting, air conditioning,
ventilating, plumbing, electrical or other mechanical equipment and the
personal property located at the Land or the Improvements, if any, and
listed in Exhibit "B" attached hereto (collectively, the "Personal
Property"); and
(c) all of Seller's right, title and interest as landlord in
and to all leases, tenancies and rental or occupancy agreements
granting possessory rights in, on or covering the Land or Improvements,
together with all modifications, extensions, amendments and guarantees
thereof, to the extent set forth in Exhibit "C" attached hereto,
together with such other leases of the Improvements as may be made
prior to Closing in accordance with the terms of this Agreement
(collectively, the "Leases"); and
(d) to the extent assignable, all of Seller's right, title and
interest in and to all contracts, agreements, guarantees, warranties
and indemnities, written or oral, if any, affecting the ownership,
operation, management and maintenance of the Land, Improvements,
Appurtenant Rights, Personal Property and Leases, including without
limitation those items listed in Exhibit "D" attached hereto
(collectively, the "Contracts"); and
(e) to the extent assignable, all of Seller's right, title and
interest (if any) in and to all (i) plans, models, drawings,
specifications, blueprints, surveys, engineering reports, environmental
reports and other technical descriptions or materials relating in any
way to the Land, Improvements, Appurtenant Rights, Personal Property,
Leases or Contracts, and (ii) licenses, franchises, certificates,
occupancy and use certificates, permits, authorizations, consents,
variances, waivers, approvals and the like from any governmental or
quasi-governmental entity or instrumentality affecting the ownership,
operation or maintenance of the Land or the Improvements, including
without limitation the items listed in Exhibit "E" attached hereto
(collectively, the "Licenses"); and
(f) to the extent assignable, all of Seller's right, title and
interest (if any) in and to all plans, drawings, specifications,
financial statements and maintenance records prepared by or on behalf
of Seller in connection with the ownership, operation and maintenance
of the Property (as defined below), (collectively, the "Intangibles").
The Land, Improvements, Appurtenant Rights, Personal Property, Leases,
Contracts, Licenses and Intangibles and other property described above are
collectively referred to herein as the "Property."
. The purchase price for the Property (the "Purchase Price") shall be the amount
set forth in Line 5 of the Summary Statement. The Purchase Price, plus or minus
prorations and adjustments provided for herein, and less the principal amount of
the Existing Financing (as defined in Section 24), shall be paid in cash or cash
equivalent to Seller on or before 2:00 p.m. Central Daylight Savings Time on the
Closing Date (as hereinafter defined). Within three (3) business days after the
date that this Agreement becomes effective pursuant to Section 22 below,
Purchaser shall deposit into the Escrow (as hereinafter defined) cash or
certified funds in the amount set forth in Line 6 of the Summary Statement as an
earnest money deposit (the "Earnest Money"). The Earnest Money shall be invested
in accordance with Purchaser's direction and, except as otherwise provided
herein, all interest earned on the Earnest Money shall remain the property of
and be paid to Purchaser. The cost of the investment of the Earnest Money shall
be paid from the interest earned thereon before such interest is paid out by
Title Company. Upon the closing of the transaction contemplated by this
Agreement, the Earnest Money shall be paid to Seller and Purchaser shall receive
a credit against the Purchase Price in the amount thereof. If the transaction
does not so close, the Earnest Money shall be disbursed in accordance with the
terms of this Agreement.
. Subject to terms and conditions of this Agreement, the closing of the
transaction contemplated by this Agreement (the "Closing") shall take place on
the date set forth on Line 9 of the Summary Statement (the "Closing Date") at
the offices of Title Company, or as the parties shall otherwise agree.
. This transaction shall be closed through an escrow established with Title
Company in accordance with the deed and money escrow instructions in the form
attached hereto as Exhibit "F" (the "Escrow"). Upon the creation of the Escrow,
anything herein to the contrary notwithstanding, the transfer and conveyance of
the Property, the payment of funds and the delivery of the Conveyance Documents
(as defined below) and other documents required to close the transaction
contemplated by this Agreement shall be made through the Escrow. At the option
of either Purchaser or Seller, the Closing shall also take place through a
so-called "New York Style" closing, so that the Title Policy will be delivered
to Purchaser on the Closing Date. All escrow costs, including the costs of the
Escrow and any New York Style closing fees, shall be divided equally between
Purchaser and Seller.
. On the Closing Date, Seller shall transfer and convey title to the Property to
Purchaser free and clear of all liens and encumbrances, other than real and
personal property taxes not yet due and payable and such title exceptions as may
be permitted pursuant to Section 6 below and liens securing the Existing
Financing (collectively, the "Permitted Exceptions"), by:
(a) delivering a recordable General Warranty deed, in the form
of Exhibit "G-1" attached hereto, subject only to the Permitted
Exceptions, executed by Seller, that conveys fee simple title to the
Land, Improvements and Appurtenant Rights to Purchaser;
(b) delivering a bill of sale, in the form of Exhibit "G-2"
attached hereto, executed by Seller, that transfers the Personal
Property to Purchaser;
(c) delivering an assignment and assumption, in the form of
Exhibit "G-3" attached hereto, executed by Seller, that transfers all
of Seller's right, title, and interest in and to the Contracts, the
Licenses, the Leases and the Intangibles to Purchaser (the "Assignment
and Assumption").
The foregoing documents and instruments are collectively referred to herein as
the "Conveyance Documents".
. Within ten (10) days after the date this Agreement becomes effective pursuant
to Section 22 below (the "Effective Date"), Seller shall deliver to Purchaser a
current Texas form title commitment (the "Title Commitment") for an owner's
title insurance policy issued by the title company identified in Line 10 of the
Summary Statement (the "Title Company") in the amount of the Purchase Price,
covering title to the Land, Improvements and Appurtenant Rights, together with
legible copies of each of the documents underlying the title exceptions listed
therein. On or before the date which is ten (10) days after Purchaser's receipt
of both the Title Commitment and the Survey (referred to in Section 7 hereof)
("Title Objection Date"), Purchaser will notify Seller in writing as to those
title exceptions listed in the Title Commitment which it will accept as
Permitted Exceptions (the "Exception Notice"). If Purchaser fails to provide
Seller the Exception Notice on or before the Title Objection Date, the title
exceptions listed in the Title Commitment shall be deemed to be Permitted
Exceptions and Purchaser shall be deemed to have waived its right to object to
such exceptions. Seller shall have the right, but not the obligation, until the
sooner of (x) the Closing Date, or (y) the date which is ten (10) days after the
date Seller receives the Exception Notice (the soonest of which is hereinafter
referred to as the "Title Clearance Date") to have all title exceptions other
than Permitted Exceptions (collectively, the "Unpermitted Exceptions") removed
from the Title Commitment or to have Title Company commit to insure, at Seller's
expense, against any and all loss or damage that may be occasioned by any such
Unpermitted Exceptions. If Seller fails on or before the Title Clearance Date to
reasonably demonstrate to Purchaser that the Unpermitted Exceptions have been
removed, or in the alternative, that Seller has obtained a commitment for title
indemnification or title insurance over such Unpermitted Exceptions, then, in
either such case, Purchaser shall, as its sole remedy, have the option (the
"Title Election") to either (i) terminate this Agreement, whereupon the parties
hereto shall have no further obligations hereunder (except for obligations which
are expressly intended to survive the termination of this Agreement), and
receive a return of the Earnest Money, or (ii) proceed with Closing, in which
event the Purchase Price shall be reduced by an amount equal to the aggregate
amount of all tax, judgment, mechanics' and lender's liens of a definite and
ascertainable amount that constitute Unpermitted Exceptions and Purchaser shall
be deemed to have waived any objection to any other Unpermitted Exceptions. If
Purchaser fails to notify Seller of its Title Election within five (5) days
after the Title Clearance Date, Purchaser shall be deemed to have elected to
proceed with the Closing, as set forth in subclause (ii) above. The provisions
of this Section 6 shall survive the termination of this Agreement.
. Within fifteen (15) days after the date this Agreement becomes effective
pursuant to Section 22 below, Seller shall obtain at Seller's expense and
deliver to Purchaser a survey of the Land and Improvements (the "Survey"), dated
on or after the date of this Agreement and prepared by Prejean & Company, Inc.
or by another land surveyor licensed by the state in which the Land is located.
The Survey shall be certified to Seller, Purchaser, the Purchaser's lender (if
any), and Title Company as having been prepared in compliance with the
requirements of the Texas Society of Professional Surveyors Standards and
Specifications for a Category 1A, Condition II Survey. On or before the Title
Objection Date, Purchaser is obligated to notify Seller in writing as to those
encroachments, gaps, gores and other matters depicted on the Survey which
Purchaser does not accept (the "Survey Defects"). If Purchaser fails to provide
Seller with written notice of any Survey Defects on or before the Survey
Objection Date, Purchaser shall be deemed to have waived its right to object to
matters of survey (and to any related title exceptions raised on the Title
Commitment in connection with survey matters). Seller shall have the right, but
not the obligation, until the sooner of (x) the Closing Date, or (y) the date
which is ten (10) days after the date Seller receives notice of the Survey
Defects (the soonest of which is hereinafter referred to as the "Survey
Clearance Date") to have the Survey Defects removed from the Survey or to have
Title Company commit to insure, at Seller's expense, against any and all loss or
damage that may be occasioned by any such Survey Defect. If Seller fails on or
before the Survey Clearance Date to reasonably demonstrate to Purchaser that the
Survey Defects have been removed, or in the alternative, that Seller has
obtained a commitment for title indemnification or title insurance over such
Survey Defect, then, in either case, Purchaser shall, as its sole remedy, have
the option (the "Survey Election") to either (i) terminate this Agreement,
whereupon the Earnest Money shall be returned to Purchaser and the parties
hereto shall have no further obligations hereunder (except for obligations which
are expressly intended to survive the termination of this Agreement), or (ii)
proceed with closing, in which case Purchaser shall be deemed to have waived any
objection to such Survey Defects. If Purchaser fails to notify Seller of its
Survey Election within ten (10) days of the Survey Clearance Date, Purchaser
shall be deemed to have elected to proceed with the Closing as set forth in
subclause (ii) above. The provisions of this Section 7 shall survive the
termination of this Agreement.
. 8. REPRESENTATIONS AND WARRANTIES
(a) As used in this Section 8, references to "Seller's actual
knowledge" shall mean the actual knowledge of Charles A. Scoville, a Vice
President of the general partner of Seller ("Seller's Agent"). Seller represents
and warrants to Purchaser, as of the date hereof and again on the Closing Date,
as follows:
(i) Except as shown on (x) the rent roll attached
hereto as Exhibit "C" (as to the representation made on the
date of this Agreement), (y) the rent roll delivered on the
Closing Date pursuant to Section 11(b)(x) below (as to the
representation made as of the Closing Date) (as applicable,
the "Rent Roll") or (z) the Title Commitment (as to the rights
of the beneficiaries of the recorded instruments specified
therein only), there are no persons in possession or occupancy
of the Property, or any part thereof, nor are there any
persons who have possessory rights with respect to the
Property or any part thereof;
(ii) During its period of ownership Seller has
received no written notice from any governmental authority of
any violation of applicable laws, ordinances or regulations
related to the Property or the occupancy thereof, nor any
written notice of increases in insurance premiums, and to its
actual knowledge, no such violation presently exists;
(iii) To Seller's actual knowledge, neither the
execution or delivery of this Agreement, the consummation of
the transactions contemplated hereby, nor the fulfillment of
or compliance with the terms and conditions hereof conflict
with or result in a material breach of any of the terms,
conditions or provisions of any agreement or instrument to
which the Seller is a party or by which Seller is bound;
(iv) Except as set forth in Section 19 below and as
set forth in Exhibit "H" below (the "Pending Commissions"),
Seller has entered into no brokerage or leasing commission
agreements with respect to the Property, where a commission or
fee has been earned but not fully paid;
(v) There are no contracts or agreements affecting
the operation of the Land or the Improvements (including
without limitation management, maintenance, service, supply,
purchase, consulting, advertising, promotion, public relations
and construction contracts, agreements, commitments,
guarantees and warranties, but other than the Leases and
agreements of record affecting the Property), except as
disclosed in Exhibit "D" attached hereto, each of which is
terminable without cause prior to the Closing Date;
<PAGE>
(vi) There are no claims, causes of action, lawsuits
or legal proceedings pending or, to Seller's actual knowledge,
threatened regarding the ownership, use or possession of the
Property, including without limitation condemnation or similar
proceedings;
(vii) Seller is duly organized, validly existing and
in good standing under the laws of the State of Texas. Seller
has all necessary power and authority to enter into this
Agreement and to consummate all of the transactions
contemplated herein. Seller's Agent is familiar with the
Property and oversees the operation and management of the
Property. The individual or individuals executing this
Agreement on behalf of Seller (or on behalf of the general
partner of Seller) are duly authorized to execute, deliver and
perform this Agreement on behalf of Seller (or on behalf of
the general partner of Seller) and to bind Seller. This
Agreement and all documents to be executed by Seller and
delivered to Purchaser hereunder (A) are and will be the
legal, valid and binding obligations of Seller, enforceable in
accordance with their terms, (B) do not or will not contravene
any provision of Seller's organizational documents or any
existing laws and regulations applicable to Seller or the
Property and (C) will not conflict with or result in a
violation of any agreement, instrument, order, writ, judgment
or decree to which Seller is a party or is subject or which
governs the Property;
(viii) To Seller's actual knowledge, during the
period of time that Seller has owned the Property, (A) Seller
has not conducted or authorized the generation,
transportation, storage, treatment or disposal at or from the
Property of any Hazardous Substances (as defined in Section
21) in violation of any applicable environmental laws, (B)
Seller has not received any written notice of, any generation,
transportation, storage, treatment or disposal at or from the
Property of any Hazardous Substance in violation of any
applicable environmental laws, and, (C) to Seller's actual
knowledge, there has been no generation, transportation,
storage, treatment or disposal at or from the Property of any
Hazardous Substances in violation of any applicable
environmental laws.
(ix) The service contracts, Leases and other
agreements delivered to Purchaser pursuant to this Agreement,
together with the recorded documents to be delivered with the
Title Commitment, constitute all contracts, leases or
agreements affecting the Property (and the ownership and use
thereof); the documents delivered pursuant to Section 11
hereof are true and correct copies of the originals and no
other amendments or modifications exist thereto; and no
defaults, or events which with notice and/or passage of time
would constitute default, exist thereunder.
(x) To Seller's actual knowledge, the Property is not
in violation of any applicable restrictive use agreements or
reciprocal easement or other similar agreements filed of
record in Fort Bend County, Texas and applicable to the
Property;
(xi) All financial and operating statements, rent
rolls, contracts, agreements and books and records delivered
by Seller to Purchaser relating to Seller and its business are
true and correct in all material respects and there are no
omissions of any material facts relating thereto;
(xii) Based on currently applicable taxes, Seller has
paid all taxes, charges, and assessments (special or
otherwise) required to be paid to any taxing authority with
respect to the Property (except for taxes and assessments for
the current year not yet due and payable); Seller has filed
with the Fort Bend County Appraisal District a written protest
contesting the valuation of the Property for 1998; no action
or proceeding currently exists by a governmental agency or
authority for the assessment or collection of currently
applicable taxes, charges, or assessments with respect to the
Property;
(xiii) The copies of the Leases which are to be
delivered by Seller to Purchaser in accordance with the terms
of this Agreement, are and shall be true and correct copies,
and no tenants are or shall be entitled to any rebates,
allowances, rent concessions or free rent for any period
subsequent to the Closing except as may be specified therein.
All obligations and items of an inducement nature to be
performed by the Seller as landlord under any of the Leases or
to which Seller otherwise agreed to perform have been fully
performed and no commitments have been made to any tenant for
repairs or improvements other than a general landlord
requirement for normal maintenance and other obligations
specified in the Leases in the future. Except as reflected on
the current Rent Roll to be delivered to Purchaser pursuant to
the provisions of Section 11(c)(x) below, no tenant has given
Seller notice of its intention to vacate its leased premises
prior to the end of the primary term (or any current renewal
or extended term). All of the Leases are in full force and
effect without current default by Seller or the respective
tenants except as otherwise reflected in the Rent Roll. There
are no pending claims asserted by any past or present tenants
for offsets against rent or any other claims (whether monetary
or otherwise) made against Seller, as landlord, under the
Leases or otherwise. There are no fees or commissions payable
to any person or entity in regard to the Leases or the
Property, except as specifically set out in the Rent Roll.
<PAGE>
(b) Purchaser represents and warrants to Seller, now and again
on the Closing Date, that: (i) Purchaser has all necessary power and authority
to enter into this Agreement and to consummate all the transactions contemplated
herein, (ii) the individuals executing this Agreement on behalf of Purchaser are
duly authorized to execute, deliver and perform this Agreement on behalf of
Purchaser and to bind Purchaser and (iii) this Agreement and all documents to be
executed by Purchaser and delivered to Seller hereunder (A) are and will be the
legal, valid and binding obligations of Purchaser, enforceable in accordance
with their terms, (B) do not or will not contravene any provision of Purchaser's
organizational documents or any existing laws and regulations applicable to
Purchaser and (C) will not conflict with or result in a violation of any
agreement, instrument, order, writ, judgment or decree to which Purchaser is a
party or is subject.
(c) All of the representations and warranties of Seller and
Purchaser contained in this Section 8 are material, none shall merge into the
deed herein provided for and all shall survive the Closing Date or termination
of this Agreement for a period of six (6) months ("Survival Period"). All rights
of Purchaser hereunder with respect to any surviving representation, warranty or
covenant shall be deemed waived if Purchaser does not, by written notice to
Seller, advise Seller of any alleged breach of representation, warranty or
covenant in this Section 8 prior to the expiration of the Survival Period.
Subject to the limitations set forth in the immediately preceding sentence, all
remedies shall be those set forth in Section 17 below, and notwithstanding
anything herein to the contrary, Seller's liability under any representation,
warranty or covenant made hereunder or in any of the Closing Documents shall in
no event exceed Seller's Maximum Liability (as hereinafter defined).
. 9. SELLER'S COVENANTS
From and after the date of this Agreement through the Closing
Date, Seller and Seller's agents shall at Seller's expense:
(a) maintain the Property in the condition in which it existed
as of the date of this Agreement, normal wear and tear excepted, free
from mechanics' liens or other claims for liens, and operate the
Property in a manner consistent with current practice and perform its
obligations under the Leases, Contracts and Licenses;
(b) keep in existence all fire and extended coverage insurance
policies, and all public liability insurance policies, that are in
existence as of the date of this Agreement with respect to the
Property;
(c) not amend, waive any rights under, terminate or extend any
Lease, Contract or License, nor apply any security or other deposits
held under any Lease, Contract or License to delinquent rents, without
Purchaser's prior written consent. Notwithstanding the preceding
sentence, prior to the Approval Date, and without the Purchaser's
consent, the Seller shall have the right to enter into new leases,
extend leases, expand demised premises, and enforce and terminate
Leases, provided that Seller gives immediate written notice of such
leasing activity to Purchaser. In the event of Purchaser's receipt of
such notice after the date which is three (3) business days prior to
the Approval Date, the Approval Date shall be extended until the date
which is three (3) business days after Purchaser's receipt of such
notice;
(d) upon at least twenty four (24) hours notice to Seller,
permit Purchaser, its engineer, architect or other agents, during
normal business hours (or such other times as are reasonable), to enter
onto the Land for the purpose of making inspections thereof;
(e) grant Purchaser access to any records, books and
agreements concerning the Property within Seller's possession or
control (with the exception of any such documents that it deems
confidential or proprietary), and maintain such records, books and
accounts in Seller's ordinary manner consistent with past practice;
(f) promptly advise Purchaser in writing of any changes in
circumstances which would render the representations and warranties
made by Seller herein false or misleading, and take such reasonable
actions as may be necessary to make such representations and warranties
true and not misleading; provided, however, that (i) Seller, in taking
such reasonable actions, shall in no event be required to spend in
excess of $25,000 (but other than in respect to the obligations arising
under any of the Leases, in which case such spending limitation shall
not apply), (ii) if Seller determines that such reasonable actions
shall require the expenditure in excess of $25,000, Seller shall have
the right to give written notice to Purchaser of its election to
terminate this Agreement, and (iii) in the event Seller makes an
election to terminate this Agreement, Purchaser shall have the option
of either (A) closing as provided for under this Agreement, with a
$25,000 credit towards the Purchase Price, in which event Seller shall
not be required to take any such actions, or (B) consent to Seller's
termination of this Agreement, in which event the Earnest Money shall
be promptly returned to Purchaser;
(g) upon written notice from Purchaser on or before Closing,
give appropriate notices of termination of Contracts designated by
Purchaser (but only to the extent termination is permitted thereunder
without a penalty); provided, however, that if the notice period
required to terminate such contracts will not have run prior to
Closing, Seller shall assign and Purchaser shall assume any remaining
rights and obligations under such Contracts pursuant to the Assignment
and Assumption; and
(h) provide Purchaser with any other relevant information with
respect to the Property upon Purchaser's reasonable request.
. 10. PURCHASER'S CONDITIONS TO CLOSING
(a) Purchaser shall have from the date this Agreement becomes
effective pursuant to Section 22 below through the Approval Date identified in
Line 8 of the Summary Statement (the "Approval Date") to inspect the Property
and complete such tests, inspections and investigations as Purchaser may
determine in its sole discretion. The period between the date this Agreement
becomes effective and the Approval Date is called the "Inspection Period."
Without limiting the generality of the first sentence of this Section 10(a),
during the Inspection Period: (A) Seller shall permit Purchaser to examine, at
all reasonable times, all books and records (including without limitation
financial and operating statements) in Seller's possession or control relating
to the Property, (B) Purchaser shall have the right, at all reasonable times, to
(I) inspect the Land, Improvements, Appurtenant Rights and Personal Property,
(II) review the Leases, the Contracts, the Licenses and the Intangibles, (III)
discuss the Property with, and obtain additional information from, tenants and
any property manager and (IV) conduct geophysical feasibility tests of the
Property and an environmental audit or audits of the Property (with copies of
the reports relating to such audits delivered to Seller when completed),
including sampling, and (C) Purchaser shall be given complete access to the
Property for the purpose of making such tests, inspections and investigations.
All of the foregoing tests, investigations and studies to be conducted under
this Section 10(a) by Purchaser shall be subject to the following:
(i) Such tests, inspections and investigations shall
take place during normal business hours upon reasonable notice
to Seller or its designated agents and Seller's consent shall
be required prior to the performance of any drilling, boring
or other invasive testing or procedures;
(ii) Except as may be required by Purchaser to
complete its due diligence during the Inspection Period or to
obtain financing in order to close this transaction, all
information set forth in the documents to be reviewed
hereunder by Purchaser, its employees and agents shall be held
in strict confidence until Closing and thereafter in the event
that the Closing does not occur;
(iii) In the event the Closing does not occur,
Purchaser shall promptly return to Seller any documents
obtained from Seller or Seller's agents;
(iv) Purchaser shall not suffer or permit any lien,
claim or charge of any kind whatsoever to attach to the
Property or any part thereof; and
(v) such tests, investigations and studies shall be
at Purchaser's sole cost and expense, and in the event of any
damage to the Property caused by Purchaser, its agents,
engineers, employees, contractors or surveyors (including,
without limitation, pavement, landscaping and surface damage),
Purchaser shall pay the cost incurred by Seller to restore the
Property to the condition existing prior to the performance of
such tests, investigations or studies.
Purchaser shall defend, indemnify and hold Seller harmless from any and all
liability, cost and expense (including without limitation, reasonable attorneys'
fees, court costs and costs of appeal) suffered or incurred by Seller for injury
to persons or property caused by Purchaser's investigations, tests, studies and
inspections of the Property.
If Purchaser elects for this Agreement to remain in full force and effect beyond
the Inspection Period, then Purchaser, at its sole option, shall deliver written
notice (the "Notice to Continue") thereof to Seller and Title Company, on or
before the expiration of the Inspection Period. Once the Notice to Continue has
been given, the Earnest Money shall become at risk. If, however, prior to the
expiration of the Inspection Period, Purchaser does not timely deliver the
Notice to Continue or if Purchaser notifies Seller and Title Company that
Purchaser has no further interest in purchasing the Property, then, in either
event, the Earnest Money shall be returned to Purchaser, and thereafter Seller
and Purchaser shall have no further obligations, one to the other, with respect
to the subject matter of this Agreement, except as otherwise specified herein.
If this Agreement is terminated, as provided above, Purchaser shall promptly
deliver to Seller copies of all documents, studies and reports obtained by
Purchaser in connection with its due diligence, this Agreement shall terminate,
the Earnest Money and all interest earned thereon shall be delivered to
Purchaser and the parties hereto shall have no further obligations hereunder
(except for obligations which are expressly intended to survive termination of
this Agreement).
(b) The obligation of Purchaser to close the transaction contemplated
by this Agreement is further subject to the condition that Purchaser has
received tenant estoppel certificates in the form attached hereto as Exhibit "I"
or in such other form as may be reasonably acceptable to Purchaser from (i) all
of the Anchor Tenants (as that term is hereinafter defined), and (ii) at least
75% (by square footage of the Improvements), of the non-Anchor Tenants, which
estoppel certificates shall confirm the tenant-based information set forth on
the Rent Roll attached hereto as Exhibit "C", or with respect to tenants who
have executed new leases since the Effective Date, as reflected on the Rent Roll
to be delivered in connection with the Closing; and as to the remaining 25% of
the non-Anchor Tenants, either tenant estoppel certificates have been received
by Purchaser or Seller has certified in writing the same information set forth
in the estoppel certificate in the form attached as Exhibit "I" or in such other
form as may be reasonably acceptable to Purchaser (the representations and
warranties contained in Seller's certificate shall survive the Closing Date for
a period of six (6) months). The term "Anchor Tenant" means any tenant at the
Property that (i) leases and occupies 8,000 square feet or more at the Property,
(ii) leases and occupies more space than any other tenant at the Property, or
(iii) leases and occupies space in at least 25 other shopping centers throughout
the United States).
(c) The obligation of Purchaser to close the transaction contemplated
by this Agreement is further subject to the condition that: (i) all of the
representations and warranties of Seller contained in this Agreement are true
and correct, in all material respects, at the date hereof and as of the Closing
Date, and (ii) all of the obligations and duties of Seller to be performed
hereunder on or before the Closing Date have been timely and duly performed.
Purchaser shall give written notice to Seller, if and to the extent Purchaser
ascertains that any representationor warranty by Seller is no longer true and
correct within five (5) days of the date of Purchaser's discovery that such
representation or warranty is no longer true and correct; provided, however,
that Purchaser's failure to give such written notice shall in no instance
constitute a default by Purchaser under this Agreement but shall instead only
serve to bar Purchaser from raising such matter as a failure of a condition
precedent to Purchaser's obligation to close the transaction and Purchaser's
election to proceed with the Closing shall result in Purchaser's waiver of any
remedy resulting from the incorrectness in such representation of warranty.
(d) If the Property is subject to any reciprocal easement agreements,
agreement of covenants, conditions and restrictions or similar documents with
adjacent landowners (the "REA Participants"), the obligation of Purchaser to
close the transaction contemplated by this Agreement is further subject to the
condition that Purchaser shall have received an estoppel certificate from each
of the REA Participants, which estoppel certificate shall be dated not more than
30 days prior to the Closing Date and shall state, inter alia, that there are no
defaults by Seller or claims against Seller arising out of such documents and
shall otherwise be in form and substance reasonably acceptable to Purchaser.
(e) All information, data and documents relating to the Property
(including, without limitation, those furnished pursuant to the terms and
provisions of Section 11) obtained by Purchaser from Seller or any other party
or discovered by Purchaser during the term of this Agreement shall be maintained
by Purchaser in strict confidence and may not be revealed to any other party
except Purchaser's employees and contractors but then only if Purchaser has
conveyed to such person the confidential nature of such material and believes
that such person will respect the confidential nature thereof.
11. DELIVERY OF DOCUMENTS.
(a) Within five (5) business days of the Effective Date of this
Agreement, Seller shall deliver to Purchaser (unless otherwise provided in this
Section 11(a) below) the following (the "Ownership Documents"), to the extent in
the possession or control of Seller:
(i) The most recent (for the prior twelve (12) months) real
estate and personal property tax bills, notices of assessed valuation
and utility bills relating to the Property;
(ii) All surveys, certificates of occupancy, certificates or
other evidence of compliance (other notices of violation) with
applicable laws, engineering data, floor plans, "as built" or working
drawings, site plans, specifications, appraisals and title policies
relating to the Property; provided Seller is only obligated to deliver
at Closing the "as built" or working drawings and specifications of the
Property.
(iii) Copies of the Leases (executed and/or out for signature)
and commission agreements, together with the most current Rent Roll for
the Property;
(iv) Copies of the Contracts and Licenses;
(v) Copies of true and correct operating income and expense
statements with respect to the Property, accurately reflecting the
operating history of the Property for calendar years 1995, 1996, and
1997 and for year-to-date 1998, on an annual basis, and, if available,
on a quarterly basis, together with operating budgets for calendar
years 1997 and 1998, if available, for the Property;
(vi) A detailed summary of all capital expenditures for the
calendar years 1995, 1996, 1997 and for year-to-date 1998, together
with the capital expenditure budgets for calendar years 1997 and 1998,
if available, for the Property;
(vii) All material audits, reports, test results,
notifications and correspondence relating to the environmental
condition or operation of the Property;
(vii) copies of any insurance policies carried on the
Property, together with a schedule setting forth property and liability
insurance coverage on or affecting the Property and the current
premiums therefor together with a written summary of all claims made
against the Property's insurance policies since January 1, 1997; and
(viii) all material data, correspondence, documents,
agreements with, notices to or from, or applications to, any taxing
authorities, governmental agencies, utilities, vendors, tenants and
mortgagees with respect to the Property that are in Seller's possession
or control, all other documents material to the condition, maintenance
or operation of the Property, and all other information and documents
relating to the Property as Purchaser shall reasonably request.
(b) Purchaser has advised Seller that it is a "reporting"
company under the Securities Exchange Act of 1934, and by reason
thereof, Purchaser is required to conduct an audit of the Property in
conformity with the rules and regulations promulgated by the Securities
and Exchange Commission. To this end, Seller agrees to cooperate with
Purchaser to grant access to Purchaser's auditors and authorized
representatives in order to permit them to conduct an audit of the
books and records of the Property and to furnish to Purchaser and its
authorized agents financial statements, rent rolls and federal income
tax returns associated with the Property for the last three fiscal
years. Upon completion of the audit, Seller also agrees to sign a
representation letter to Purchaser that, to Seller's best information,
all information furnished to Purchaser's auditors in this regard is
true and complete in all material respects
(c) On the Closing Date, Seller shall deliver the following
documents (the "Closing Documents") to Purchaser, in form and substance
reasonably acceptable to Purchaser all duly executed, where
appropriate, each of which shall be a condition precedent to
Purchaser's obligation to close the transaction contemplated by this
Agreement (and one or more of which may be waived in writing by the
Purchaser, in its sole discretion, on or prior to the Closing Date):
(i) the Conveyance Documents, executed by
Seller;
(ii) to the extent required by the title company, a
title affidavit in customary form, executed by Seller;
(iii) Seller's counterpart of a closing and
proration statement, executed by Seller;
(iv) a certification of nonforeign status satisfying
Section 1445 of the Internal Revenue Code of 1986, as amended, executed
by Seller;
(v) such documents as may be required by the holder
of the Existing Financing to evidence its consent to the conveyance of
the Property to Purchaser and the release of Seller from further
liability in accordance with the provisions of Section 24 hereof;
(vi) evidence of Seller's existence and authority to
perform its obligations under this Agreement, in form and substance
reasonably satisfactory to Purchaser and Title Company;
(vii) if a New York Style closing is used, (A) a gap
undertaking, executed by Seller, and (B) the Title Commitment,
hand-marked, initialed and dated as of the Closing Date so as to be the
equivalent of the Title Policy (or a pro forma title policy) subject
only to the Permitted Exceptions (the "Title Policy");
(viii) all keys and access cards to, and combinations to
locks and other security devices located at, the Property, if
applicable;
(ix) all of the original Leases, Contracts and
Licenses, and originals of all other materials delivered pursuant to
Section 11(a) above, where available, together with (A) a letter from
Seller advising the tenants under the Leases of the assignment of their
respective Leases to Purchaser and the manner in which rent is to be
paid subsequent to Closing; and (B) evidence of termination of
Contracts designated by Purchaser, if applicable;
(x) a current Rent Roll certified by Seller as
true, correct and complete;
(xi) all letters of credit and other non-cash security
deposits for which Purchaser is not receiving a credit under Section 14
below, together with appropriate documents of assignment and amendment
running in favor of Purchaser;
(xii) a certificate in the form of Exhibit "J" executed
by Seller recertifying the representations and warranties set forth in
Section 8(a) above as of the Closing Date ; and
(xiii) such other documents, instruments, consents or
agreements as may be reasonably requested by the Title Company or the
escrow agent, in order to issue the Title Policy, in the form and with
the endorsements required by this Agreement, and to otherwise
consummate the Closing.
(d) On the Closing Date, Purchaser shall deliver the following
to Seller, in form and substance reasonably acceptable to Seller, all
duly executed where appropriate, each of which shall be a condition
precedent to Seller's obligation to close the transaction contemplated
by this Agreement:
(i) such documents as may be required by the holder
of the existing indebtedness to evidence assumption thereof by
Purchaser and the release of Seller from further liability;
(ii) counterparts of the Assignment and
Assumption, executed by Purchaser;
(iii) counterparts of the closing and proration
statement, executed by Purchaser;
(iv) a certified copy of the resolutions or consent of
Purchaser authorizing the transaction contemplated by this Agreement or
other satisfactory evidence of authorization;
(v) the Purchase Price, plus or minus prorations and
adjustments, less the principal amount of the Existing Financing; and
(vi) such other documents, instruments or agreements
as may be reasonably requested by (A) Seller, in order to consummate
this Agreement or (B) Title Company or the escrow agent, in order to
issue the Title Policy free of any exceptions raised due to the actions
of Purchaser, and to otherwise consummate the Closing.
. In the event of damage to the Property by fire or other casualty prior to the
Closing Date, Seller shall promptly notify Purchaser of such fire or other
casualty. If the fire or other casualty causes damage which would cost in excess
of $100,000 to repair (as determined by Seller in good faith), then Purchaser
may elect, by written notice to be delivered to Seller on or before the sooner
of (i) the twentieth (20th) day after Purchaser's receipt of such notice, or
(ii) the Closing Date, to either: (a) close the transaction contemplated by this
Agreement and receive all insurance claims and proceeds payable to Seller as a
result of such fire or other casualty, with the same being paid or assigned to
Purchaser at Closing or (b) terminate this Agreement, and receive a return of
the Earnest Money in which case the parties hereto shall have no further
obligations hereunder (except for obligations which are expressly intended to
survive the termination of this Agreement). If the damage to the Property by
fire or other casualty prior to the Closing Date would cost less than or equal
to $100,000 to repair (as determined by Seller in good faith), Purchaser shall
not have the right to terminate its obligations under this Agreement by reason
thereof, and Seller shall have the right to elect to either repair and restore
the Property if such repair or restoration may be completed prior to the Closing
Date or to assign and transfer to Purchaser on the Closing Date all of Seller's
right, title and interest in and to all insurance proceeds paid or payable to
Seller on account of such fire or casualty and Purchaser shall be entitled to
receive a credit against the Purchase Price the amount of any deductible under
Seller's insurance policy. The provisions of this Section 12 shall survive the
termination of this Agreement.
. If, prior to the Closing Date, all or any portion of the Property is taken by
condemnation or a conveyance in lieu thereof, or if notice of a condemnation
proceeding with respect to the Property is received by Seller (a copy of which
notice shall be immediately delivered by Seller to Purchaser), Seller shall
promptly notify Purchaser of such condemnation or a conveyance in lieu thereof.
If the taking or threatened taking involves a material portion of the Property
(hereafter defined), Purchaser may elect, by written notice to be delivered to
Seller on or before the sooner of (i) the twentieth (20th) day after Purchaser's
receipt of such notice, or (ii) the Closing Date, to terminate this Agreement,
in which event the Earnest Money shall be returned to Purchaser, and the parties
hereto shall have no further obligations hereunder (except for obligations which
are expressly intended to survive the termination of this Agreement). If
Purchaser elects to close this transaction notwithstanding such taking or
condemnation, Purchaser shall be entitled to any award given to Seller as a
result of such condemnation proceedings, with the same being paid or assigned to
Purchaser at Closing. As used herein, a "material portion of the Property" means
any part of the Property reasonably required for the operation of the Property
in the manner operated on the date hereof. If any taking or threatened taking
does not involve a material portion of the Property, Purchaser shall be required
to proceed with the Closing, in which event Seller shall assign to Purchaser any
award given to Seller as a result of such condemnation proceedings. The
provisions of this Section 13 shall survive the termination of this Agreement.
. Adjustments and prorations with respect to the Property shall be computed
and determined between the parties as of 12:01 a.m. on the Closing Date as
follows:
(a) General real estate taxes for the year of closing and
special assessments (if any) shall be prorated as of the Closing Date
based on the then current real estate taxes (if known, based on the
final real estate tax bills for such period -- and if not known, based
on the most recent ascertainable taxes) and the special assessments due
and owing prior to Closing, and Seller or Purchaser shall receive a
credit at Closing, as appropriate. Without affecting the obligations
set forth in this Section 14(a), the prorations for real and personal
property taxes shall be equitably prorated on a "net" basis (i.e.
adjusted for all tenants' liabilities, if any, for such items). If
general real estate taxes or special assessments are not known as of
the Closing, the parties agree to reprorate when such amounts become
known. The agreement to reprorate includes any reduction in 1998 taxes
as a result of the protested valuation of the Property. All obligations
under this Section 14(a) shall survive the Closing.
(b) All rents, escalation or reimbursement payments for real
estate and personal property taxes, insurance premiums, CAM or other
operating expenses and charges, payable with respect to the Property
for the then current month and other sums receivable from tenants of
the Property which were earned and attributable to the period prior to
the Closing Date will be prorated and retained by Seller to the extent
that such rents and other amounts have been collected on or before the
Closing Date. Rents earned and attributable to the period beginning on
the Closing Date and thereafter, will be paid to Purchaser by the
tenants, or credited to Purchaser at Closing (if such rents are
received by Seller prior to the Closing Date). Percentage rents for
each Tenant obligated therefor shall be prorated within thirty (30)
days after the end of calendar year 1998 on the basis of the number of
days lapsed during the Tenant's percentage rent period as of the
Closing Date and not on the basis of the amount of the Tenant's sales
which accrued during such percentage rent period as of the Closing
Date. All payments from tenants, on account of rent or otherwise,
received by Seller after the Closing Date, whether attributable to the
period prior to or after the Closing Date, shall be deemed to be held
in trust by Seller for Purchaser and shall be promptly delivered to
Purchaser by Seller for application as provided in this Section 14(b).
All payments from tenants, on account of rent or otherwise, received
after the Closing Date by Purchaser and all amounts received from
Seller by Purchaser pursuant to the immediately preceding sentence,
shall be applied first to rent or other sums due under the Leases
attributable to the period beginning on the Closing Date and continuing
thereafter, and then to payment to Seller on account of rents which
were earned and attributable to the period prior to the Closing Date
but which have not been paid when due. Any customary out of pocket
costs incurred by Purchaser in collection of delinquent rentals shall
be deducted by Purchaser prior to the payment to Seller on account of
delinquent rentals as provided herein.
(c) On the Closing Date, Seller will deliver to Purchaser in
cash, as a credit against the Purchase Price or as an adjustment to the
prorations provided for elsewhere in this Section 14, as appropriate,
an amount equal to all security deposits made by tenants occupying the
Property which were paid to Seller by such tenants and which have not
been applied by Seller pursuant to the Leases, together with interest
owing thereon pursuant to the applicable Lease, if any, and together
with a listing of the tenants to which such deposits and interest are
owing.
(d) All amounts payable, owing or incurred in connection with
the Property under the Contracts to be assumed by Purchaser under the
Assignment and Assumption shall be prorated as of the Closing Date.
(e) Seller shall be entitled to a credit for all transferable
utility deposits transferred hereunder, if any. All other utility
deposits, if any, may be withdrawn by and refunded to Seller and
Purchaser shall make its own replacement deposits for utilities as may
be required by the respective utilities involved.
(f) The Earnest Money shall be paid to Seller at Closing and
Purchaser shall be entitled to a credit against the Purchase Price in
the amount thereof.
(g) All utility charges that are not separately metered to
tenants will be prorated to the Closing Date and Seller will obtain a
final billing therefor and pay any amounts owing therein for the period
prior to the Closing Date and Purchaser shall pay any amounts owing for
the period on and after the Closing Date. To the extent that utility
bills cannot be handled in the foregoing manner, they shall be prorated
as of the Closing Date based on the most recent bills available and
reprorated when such final bills become known.
(h) Purchaser shall pay its pro rata share (based on the
applicable commencement date of the lease and lease term) of all
leasing commissions and tenant improvement costs payable with respect
to Leases entered into after the date of this Agreement which are
approved by Purchaser. If Seller has paid such amounts prior to the
Closing Date, Purchaser shall reimburse Seller for its prorata share of
such payments at Closing. If Seller has not paid such amounts prior to
the Closing Date, Purchaser shall receive a credit against the Purchase
Price at Closing in an amount equal to the Seller's pro rata share of
such amounts.
(i) Unless provided otherwise hereinabove, such other items
which are customarily prorated in a purchase and sale of the type
contemplated hereunder shall be prorated as of the Closing Date.
(j) Except as provided in this Section 14, all prorations are
final and there shall be no reprorations. Notwithstanding the
foregoing, each of the provisions of this Section 14 shall survive the
Closing.
. Seller shall pay: (a) the costs of recording any releases required to clear
title to the Property, (b) Seller's attorneys' fees, (c) one half of all escrow
and New York Style closing fees, and (d) the costs of the Title Policy but not
any endorsements or deletions thereto. Purchaser shall pay: (i) the costs of
recording the deed, (ii) Purchaser's attorneys' fees, and (iii) one half of all
escrow and New York Style closing fees.
. Possession of the Property shall be delivered to Purchaser at Closing, free
and clear of all liens and claims other than Permitted Exceptions and the rights
of the tenants identified on the Rent Roll, in the same condition as it exists
on the date of this Agreement, ordinary wear and tear excepted and except as
provided in Section 12 and 13 hereof. Purchaser shall have the right to inspect
the Property within three (3) days prior to Closing to verify that the condition
of the Property is as required under this Agreement.
. If Seller defaults hereunder and fails to cure such default within five (5)
days after written notice of such default, or if the representations and
warranties set forth in this Agreement shall not be true and correct in all
material respects on the date of this Agreement and as of the Closing Date,
Purchaser's sole remedy shall be to either (a) terminate this Agreement and
receive a return of the Earnest Money (less $100 which shall be paid to Seller
in any event), in which event each of the parties hereto shall be relieved of
any further obligation to the other arising by virtue of this Agreement (except
for obligations which are expressly intended to survive the termination of this
Agreement), or (b) pursue specific performance of this Agreement, or (c) solely
in the event of a conveyance or hypothecation of the Property to a third party
in violation of the terms hereof, recover from Seller its actual damages. Except
as aforesaid, in no event shall Seller be liable for any actual, punitive,
speculative or consequential damages; nor shall Seller's liability under any
representation, warranty, covenant, agreement, proration, reproration,
obligation or indemnity made hereunder or under any of the Closing Documents
exceed $50,000 in the aggregate ("Seller's Maximum Liability"). None of Seller's
partners, members, officers, agents or employees shall have any personal
liability of any kind or nature or by reason of any matter or thing whatsoever
under, in connection with, arising out of or in any way related to this
Agreement and the transactions contemplated herein, and Purchaser waives for
itself and for anyone who may claim by, through or under Purchaser any and all
rights to sue or recover on account of any such alleged personal liability. If
Purchaser defaults hereunder and fails to cure such default within five (5) days
of written notice of such default, this Agreement shall terminate and Seller
shall retain the Earnest Money and any interest thereon as liquidated damages in
full settlement of all claims against Purchaser (with the exception of claims
against Purchaser related to obligations which are expressly intended to survive
the termination of this Agreement). The parties agree that the amount of actual
damages which Seller would suffer as a result of Purchaser's default would be
extremely difficult to determine and have agreed, after specific negotiation,
that the amount of the Earnest Money is a reasonable estimate of Seller's
damages and is intended to constitute a fixed amount of liquidated damages in
lieu of other remedies available to Seller and is not intended to constitute a
penalty.
. Any notice, demand, request or other communication which either party hereto
may be required or may desire to give under this Agreement shall be in writing
and shall be deemed to have been properly given if (a) hand delivered (effective
upon delivery), (b) mailed (effective three (3) days after mailing) by United
States registered or certified mail, postage prepaid, return receipt requested,
(c) sent by a nationally recognized overnight delivery service (effective one
(1) day after delivery to such courier) or (d) sent by facsimile (effective upon
confirmation of transmission), in each case, addressed as follows:
<PAGE>
IF TO SELLER:
Highland Square Partners, Ltd.
c/o Transwestern Property Company
6671 Southwest Freeway, Suite 200
Houston, Texas 77074
Attn: Charles A. Scoville
Telecopy Number: (713) 270-0688
With a copy to:
Coats, Rose, Yale, Holm, Ryman & Lee, P.C.
800 First City Tower, 1001 Fannin St.
Houston, Texas 77002
Attn: Richard L. Rose
Telecopy Number: (713) 651-0220
IF TO PURCHASER:
In accordance with Line 11 of the Summary Statement
or to such other or additional addresses as either party might designate by
written notice to the other party.
. Each of Seller and Purchaser represents and warrants to the other that it has
not dealt with any brokers, finders or agents with respect to the transaction
contemplated hereby other than the broker(s) set forth in Line 12 of the Summary
Statement (collectively, the "Brokers"). Each party agrees to indemnify, defend
and hold harmless the other party, its successors, assigns and agents, from and
against the payment of any commission, compensation, loss, damages, costs, and
expenses (including without limitation attorneys' fees and costs) incurred in
connection with, or arising out of, claims for any broker's, agent's or finder's
fees of any person claiming by or through such party other than Brokers. The
obligations of Seller and Purchaser under this Section 19 shall survive the
Closing and the termination of this Agreement.
. On the Closing Date, Seller shall deliver evidence satisfactory to Purchaser
that, unless expressly assumed by Purchaser in writing, any current management
and leasing agreements for the Property have been terminated (or notice of
termination given), and that the manager and any brokers have been paid all
commissions or fees due any payable except as provided in Section 14(h) hereof.
Purchaser is not required to continue the employment of any employees of Seller
or any property manager after the Closing Date. Seller shall satisfy all
obligations to all employees, if any, employed by Seller or otherwise in the
operation of the Property and provide Purchaser with evidence thereof
satisfactory to Purchaser on the Closing Date.
. 21. "AS IS" SALE
(a) EXCEPT FOR THE EXPRESS REPRESENTATIONS AND WARRANTIES OF
SELLER SET FORTH HEREIN, PURCHASER ACKNOWLEDGES AND AGREES THAT IT WILL BE
PURCHASING THE PROPERTY AND THE PERSONAL PROPERTY BASED SOLELY UPON ITS
INSPECTIONS AND INVESTIGATIONS OF THE PROPERTY AND THE PERSONAL PROPERTY, AND
THAT PURCHASER WILL BE PURCHASING THE PROPERTY AND THE PERSONAL PROPERTY "AS IS"
AND "WITH ALL FAULTS", BASED UPON THE CONDITION OF THE PROPERTY AND THE PERSONAL
PROPERTY AS OF THE DATE OF THIS AGREEMENT, ORDINARY WEAR AND TEAR AND LOSS BY
FIRE OR OTHER CASUALTY OR CONDEMNATION EXCEPTED AND THAT SELLER MAKES NO
WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, OR ARISING BY OPERATION OF LAW,
INCLUDING, BUT NOT LIMITED TO, ANY WARRANTY OF CONDITION, HABITABILITY,
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, IN RESPECT OF THE PROPERTY.
WITHOUT LIMITING THE FOREGOING, PURCHASER ACKNOWLEDGES THAT, EXCEPT AS MAY
OTHERWISE BE SPECIFICALLY SET FORTH ELSEWHERE IN THIS AGREEMENT, NEITHER SELLER
NOR ITS CONSULTANTS, BROKERS OR AGENTS HAVE MADE ANY REPRESENTATIONS OR
WARRANTIES OF ANY KIND UPON WHICH PURCHASER IS RELYING AS TO ANY MATTERS
CONCERNING THE PROPERTY OR THE PERSONAL PROPERTY, INCLUDING, BUT NOT LIMITED TO:
(I) THE CONDITION OF THE LAND OR ANY IMPROVEMENTS COMPRISING THE PROPERTY; (II)
THE EXISTENCE OR NON-EXISTENCE OF ANY POLLUTANT, TOXIC WASTE AND/OR ANY
HAZARDOUS MATERIALS OR SUBSTANCES; (III) ECONOMIC PROJECTIONS OR MARKET STUDIES
CONCERNING THE PROPERTY, OR THE INCOME TO BE DERIVED FROM THE PROPERTY; (IV) ANY
DEVELOPMENT RIGHTS, TAXES, BONDS, COVENANTS, CONDITIONS AND RESTRICTIONS
AFFECTING THE PROPERTY; (V) THE NATURE AND EXTENT OF ANY RIGHT OF WAY, LEASE,
LIEN, ENCUMBRANCE, LICENSE, RESERVATION OR OTHER TITLE MATTER; (VI) WATER OR
WATER RIGHTS, TOPOGRAPHY, GEOLOGY, DRAINAGE, SOIL OR SUBSOIL OF THE PROPERTY;
(VII) THE UTILITIES SERVING THE PROPERTY; (VIII) THE SUITABILITY OF THE PROPERTY
FOR ANY AND ALL ACTIVITIES AND USES WHICH PURCHASER MAY ELECT TO CONDUCT
THEREON; OR (IX) THE COMPLIANCE OF THE PROPERTY WITH ANY ZONING, ENVIRONMENTAL,
BUILDING OR OTHER LAWS, RULES OR REGULATIONS AFFECTING THE PROPERTY. SELLER
MAKES NO REPRESENTATION OR WARRANTY THAT THE PROPERTY COMPLIES WITH THE
AMERICANS WITH DISABILITIES ACT OR ANY FIRE CODE OR BUILDING CODE. PURCHASER
HEREBY RELEASES SELLER FROM ANY AND ALL LIABILITY IN CONNECTION WITH ANY CLAIMS
WHICH PURCHASER MAY HAVE AGAINST SELLER AND PURCHASER HEREBY AGREES NOT TO
ASSERT ANY CLAIMS FOR CONTRIBUTION, COST RECOVERY OR OTHERWISE, AGAINST SELLER
RELATING DIRECTLY OR INDIRECTLY TO THE EXISTENCE OF ASBESTOS OR HAZARDOUS
MATERIALS OR SUBSTANCES ON, OR ENVIRONMENTAL CONDITIONS OF, THE PROPERTY,
WHETHER KNOWN OR UNKNOWN. As used herein, the term "hazardous materials or
substances" means (i) hazardous wastes, hazardous substances, hazardous
constituents, toxic substances or related materials, whether solids, liquids or
gases, including but not limited to substances defined as "hazardous wastes,"
"hazardous substances," "toxic substances," "pollutants, "contaminants,"
"radioactive materials," or other similar designations in, or otherwise subject
to regulation under, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, 42 U.S.C. ss. 9601 et seq.; the Toxic
Substance Control Act, 15 U.S.C. ss. 2601 et seq.; the Hazardous Materials
Transportation Act, 49 U.S.C. ss. 1802; the Resource Conservation and Recovery
Act, 42 U.S.C. ss. 9601. et seq.; the Clean Water Act, 33 U.S.C. ss. 1251; the
Safe Drinking Water Act, 42 U.S.C. ss. 30Of et seq; the Clean Air Act, 42 U.S.C.
ss. 7401 et seq.; and in any permits, licenses, approvals, plans, rules,
regulations or ordinances adopted, or other criteria and guidelines promulgated
pursuant to the preceding laws or other similar federal, state or local laws,
regulations, rules or ordinance now or hereafter in effect relating to
environmental matters (collectively, "Environmental Laws"); and (ii) any other
substances, constituents or wastes subject to any applicable federal, state or
local law, regulation or ordinance, including any Environmental Law, now or
hereafter in effect, including but not limited to (A) petroleum, (B) refined
petroleum products, (C) waste oil, (D) waste aviation or motor vehicle fuel and
(E) asbestos. The provisions of this Section 21 shall survive the Closing Date.
Purchaser's Initials
22. OFFER AND ACCEPTANCE. Seller shall have five (5) business days to
accept Purchaser's offer measured from the date offered indicated below
Purchaser's signature hereto. Acceptance of the offer shall become effective
only when Purchaser receives a fully executed copy of this Agreement. If this
Agreement has not been executed by Seller and delivered to Purchaser prior to
the end of the fifth (5th) business day after the date indicated below
Purchaser's signature, the terms of this Agreement shall be deemed null and void
without further action.
23. MISCELLANEOUS.
(a) Time is of the essence of each provision of this
Agreement.
(b) This Agreement and all provisions hereof shall extend to,
be obligatory upon and inure to the benefit of the respective heirs, legatees,
successors and assigns of the parties hereto. Without limitation to the
foregoing, Purchaser shall have the right to assign its rights under this
Agreement to, and to direct that the Conveyance Documents, including without
limitation the deed provided for in Section 5(a), run in favor of and/or list as
grantee or assignee therein, an entity affiliated, or under common control, with
Purchaser, or a nominee of Purchaser. In the event of any such assignment,
Purchaser shall be deemed to be relieved from all of its obligations under this
Agreement. For the purpose of this Section 23(b), the term "control" shall mean
the power to directly or indirectly determine ordinary business decisions,
regardless of whether such power is accompanied by the majority of ownership
interests.
(c) Except as provided herein, this Agreement contains the
entire agreement between the parties relating to the transactions contemplated
hereby.
(d) This Agreement shall be governed by and construed in
accordance with the laws of the State described in Line 13 of the Summary
Statement.
(e) If any of the provisions of this Agreement or the
application thereof to any persons or circumstances shall, to any extent, be
deemed invalid or unenforceable, the remainder of this Agreement and the
application of such provisions to persons or circumstances other than those as
to whom or which it is held invalid or unenforceable shall not be affected
thereby.
(f) This Agreement and any document or instrument executed
pursuant hereto may be executed in any number of counterparts, each of which
shall be deemed an original, but all of which, together, shall constitute one
and the same instrument.
(g) From the date hereof through Closing, Purchaser and Seller
shall jointly prepare and issue all releases of information relating to the sale
of the Property, and any inquiries regarding the transaction contemplated hereby
shall be responded to only after consultation with the other party hereto.
(h) If either party institutes a legal action against the
other relating to this Agreement or any default hereunder, the unsuccessful
party to such action will reimburse the successful party for the reasonable
expenses of prosecuting or defending such action, including without limitation
attorneys' fees and disbursements and court costs. The obligations under this
Section 23(h) shall survive the termination of this Agreement.
(i) This Agreement shall not be construed more strictly
against one party than against the other merely by virtue of the fact that the
Agreement may have been prepared primarily by counsel for one of the parties, it
being recognized that both Purchaser and Seller have contributed substantially
and materially to the preparation of this Agreement.
(j) Exhibits "B", "C", "D" and "E" may be finalized, initialed
by both parties and inserted into this Agreement after this Agreement is fully
executed and prior to the Approval Date.
(k) The Summary Statement attached to this Agreement is hereby
incorporated herein and made a part hereof.
(l) If, under the terms of this Agreement and the calculation
of the time periods provided for herein, the Approval Date, the Closing Date or
any other date to be determined under this Agreement should fall on Saturday, a
Sunday, a legal holiday or other date on which banks located in Houston, Texas
are not open for business, then such date shall be extended to the next business
day.
(m) A facsimile or photocopy signature on this Agreement, any
amendment hereto or any notice delivered hereunder shall have the same legal
effect as an original signature.
(n) Prior to the Closing Date, the parties shall keep the
terms of this Agreement confidential and shall not disclose such terms to any
other parties without the other party's prior written consent, which consent
shall be in each party's sole discretion; provided, however, that each party
may, without obtaining such prior written consent, make such disclosures as may
be required by applicable laws or agreements by which such party is bound, and
to each such party's managers, members, officers, lenders, employees, attorneys,
accountants, appraisers, insurance advisors, consultants and similar third party
professionals.
24. EXISTING FINANCING. Prior to the Approval Date, Purchaser shall
request approval from Morgan Stanley Mortgage Capital, Inc. ("Morgan Stanley"),
the current owner and holder of a mortgage lien secured by the Property (the
"Existing Financing") to the conveyance of the Property to Purchaser and the
release of Seller from further liability under such financing. At Closing,
Purchaser accept title to the Property subject to the Existing Financing and all
of Seller's obligations with respect to the Existing Financing which arise as of
and after the Closing Date, provided that the terms of such Existing Financing
provide that (i) Purchaser shall have no corporate or trust liability thereunder
except for certain "carve-outs" which Purchaser reserves the right to approve,
and (ii) Purchaser agrees to be bound by the terms of the Existing Financing and
the holder of such financing is entitled to exercise the rights and remedies
available to it under the loan documents evidencing and securing the Existing
Financing. Notwithstanding anything contained herein to the contrary, in the
event Morgan Stanley does not approve the conveyance of the Property to
Purchaser and the release of Seller from all liability for events occurring
subsequent to the Closing, before the Closing Date, then this Agreement shall
terminate and Purchaser shall receive a full refund of the Earnest Money.
Purchaser agrees to provide all information requested by the lender in
connection with its approval process. Seller and Purchaser each agree to pay
one-half (1/2) of the costs and expenses related to the approval by the holder
of the Existing Financing for this transaction, including application fees, loan
fees or points, transfer fees and other costs which the holder of the Existing
Financing requires to be paid in connection with its approval, including
lender's attorney's fees (the "Approval Costs"); provided, however, Purchaser
shall not be required to pay in excess of $25,000.00 and Seller alone shall be
responsible for all Approval Costs in excess of $50,000.00. Seller covenants
that it shall not, at any time, either prior to or after Closing, alter, renew,
rearrange, restructure or refinance any indebtedness evidenced by the Existing
Financing or modify the Existing Financing or any instrument securing the
Existing Financing, without the prior written consent of Purchaser; and Seller
shall neither accept nor request any extension, postponement, indulgence or
forgiveness of the Existing Financing or the indebtedness evidenced thereby,
without the prior written consent of Purchaser.
IN WITNESS WHEREOF, this Agreement has been executed as of the date
first above written.
PURCHASER:
UNITED INVESTORS REALTY TRUST,
a Texas real estate investment trust
By:
Its:
Date Offered:
SELLER:
HIGHLAND SQUARE PARTNERS, LTD.,
a Texas limited partnership Date Accepted: 6/4/98
By: Highland Square GP, Inc.,
a Texas corporation, general partner<PAGE>
By:
Name:
Title:
EXHIBIT A
Legal Description
<PAGE>
EXHIBIT B
List of Equipment, Fixtures and Personal Property
<PAGE>
EXHIBIT C
Rent Roll
The current Rent Roll of the Property shall contain the following information
with respect to each Tenant:
(A) the name and street or unit number of the Tenant;
(B) the term of the Tenant's Lease, its commencement and
expiration dates, any renewal terms or extensions and the base
rent and percentage rent, if any, payable thereunder;
(C) the amount of monthly base rent and percentage rent, if
any, payable by and portion of the Property's CAM and real
estate taxes and insurance premiums recoverable from each
Tenant and any other payments for which such Tenant is liable;
(D) amount of prepaid rent and the amount of security and
other deposits due under the Lease and held by Landlord;
(E) the amount of any ongoing Lease commission obligations, if
any, and to whom such commission is owed;
(F) any uncured defaults and the amounts of any unpaid rents,
percentage rents, and other payments past due thereunder;
(G) the amount of any offsets or credits against rental, if
any; and
(H) any concessions granted to the Tenant, including, without
limitation, free rent, rental rebates or credits, lease
take-over arrangements, cash payments, and moving allowances.
<PAGE>
EXHIBIT D
List of Contracts
<PAGE>
EXHIBIT E
List of Licenses
<PAGE>
EXHIBIT F
ESCROW AGREEMENT
THIS ESCROW AGREEMENT is made and entered into on this _____ day of
__________, 1998, by and among Highland Square Partners, Ltd. ("Seller"), United
Investors Realty Trust ("Purchaser") and Safeco Land Title Company ("Escrow
Agent").
RECITALS
(a) Seller and Purchaser have entered into that certain Real Estate
Purchase and Sale Agreement dated June ___, 1998 ("Agreement"), providing for
the sale by Seller of property commonly known as the Highland Square Shopping
Center, Sugar Land, Texas ("Property").
B. The parties wish to enter into this Escrow Agreement to provide for
(1) the holding and disposition of the earnest money under the Agreement, and
(2) the closing of the transaction contemplated by the Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
1. On or before __________, 199__, Purchaser shall deliver to Escrow
Agent funds in the amount of $25,000.00 (the "Earnest Money"). Escrow Agent
shall deliver to Purchaser an acknowledgment of receipt of a check or funds
representing the Earnest Money.
2. On or before __________, 199___ at 5:00 p.m. (Houston, Texas Time)
("Approval Date") Purchaser may deliver to Escrow Agent written notice that
Purchaser has elected not to terminate the Agreement pursuant to Section 10(a)
of the Agreement ("Notice to Continue"). In the event that Purchaser either
delivers written notice to Escrow Agent of its election to terminate the
Agreement on or before the Approval Date or fails to deliver to Escrow Agent the
Notice to Continue on or before the Approval Date, Escrow Agent shall promptly
deliver to Purchaser the Earnest Money, together with all interest earned
thereon, and this Escrow Agreement shall terminate.
3. Unless terminated pursuant to Paragraph 2 above, on or before
__________, 199___ ("Closing Date"):
a. Seller will deposit or will cause to be deposited
with the Escrow Agent the following documents:
(1) General Warranty Deed with assumption executed by Seller (the "Deed");
(2) Bill of Sale executed by Seller (the "Bill of Sale");
(3) Assignment and Assumption (of contracts, licenses, leases and intangibles)
executed by Seller (the "Assignment and Assumption");
(4) Non-Foreign Affidavit executed by Seller;
(5) Evidence of Seller's existence and authority to perform its obligations
under the Agreement;
(6) Unless Purchaser has elected to assume Seller's management agreement,
evidence of termination of such management agreement and payment of all
management fees;
(7) Current rent roll certified by Seller; and
<PAGE>
(8) A certificate executed by Seller recertifying the representations and
warranties contained in the Agreement;
b. Purchaser will deposit or will cause to be deposited the following documents:
(1) Purchaser's counterpart of the Assignment and Assumption executed by
Purchaser;
(2) Wire transfer of funds in the amount required to close as shown on the
Closing Statement, pursuant to the wire transfer instructions as shown on
Schedule 1 attached hereto.
(3) A list of the "Permitted Exceptions" and other title matters Purchaser is
willing to take the Property subject to, determined in accordance with the terms
of Section 6 of the Agreement (the "Exception List").
c. Purchaser and Seller (or their respective attorneys) will jointly deposit the
following:
(1) Closing and Proration Statement (the "Closing Statement") (five originals).
(2) Counterparts of the Assignment and Assumption, executed by Purchaser or its
assignee.
(3) Transfer Tax Declarations, if applicable.
4. When you have received all of the deposits listed in Section 3 above
and when you are prepared to issue a Lawyers Title Insurance Corporation ("Title
Company") Owner's Policy of Title Insurance ("Title Policy") having an effective
date as of the date the Deed is recorded, in the amount of the Purchase Price
and insuring the title of Purchaser in the Property, subject only to those
matters on the Exception List, you are then authorized and instructed to proceed
as follows:
a. Record the Deed.
b. Pay the disbursements as shown on the Closing
Statement from the funds deposited by Purchaser.
c. Deliver to Purchaser the Title Policy, the recorded
Deed, the Bill of Sale, one original of the
Assignment and Assumption, the certified rent roll,
the recertification of the representations and
warranties, two originals of the Closing Statement
and copies of all other deposits.
d. Deliver to Seller one original of the Assignment and
Assumption, two originals of the Closing Statement
and copies of all other deposits made hereunder.
5. In the event all escrow deposits have not been received herein on or
before 5:00 p.m. on , 199 or if Title Company is not prepared to issue the Title
Policy or to comply with the other instructions contained herein on or before
5:00 p.m. on , 199 you are hereby authorized and directed to continue to comply
with this Escrow Agreement until you have received a written demand from any
party hereto for the return of the deposits made hereunder by said party. Upon
receipt of such demand, you are hereby authorized and directed to return to the
party making such demand the deposits made by such party without notice to any
other party and you may return all remaining deposits to the respective
depositors thereof, except that, notwithstanding the terms hereof, (A) joint
deposits shall be destroyed, and (B) the Earnest Money, together with interest
earned thereon, shall be retained by you, until you receive a joint instruction
executed by Purchaser and Seller. Notwithstanding the foregoing, if the Deed has
been recorded, then prior to returning any deposits to Purchaser, you must
receive and record a quit claim deed of reconveyance reconveying the Property to
the grantor in the Deed deposited by Seller, and Title Company must be prepared
to issue an owner's policy of title insurance in the amount stated herein
insuring the title of Seller, free and clear of acts done or suffered by or
judgments against Purchaser. Seller shall pay for the recording of the
reconveyance deeds and the title policy.
6. Escrow Agent shall invest all funds held hereunder in such
investments, or types thereof, as shall be designated in writing by Seller and
Purchaser. If Seller does not designate any investments, then the funds shall be
held by Escrow Agent in an interest bearing account, in a financial institution
which has FDIC insurance covering up to $100,000 of such funds. Interest shall
accrue to the benefit of Purchaser.
7. It is agreed that the Escrow Agent shall have no obligation or
liability hereunder except as a depositary to retain the cash which may be
deposited with it hereunder and to dispose of the same in accordance with the
terms hereof. The Escrow Agent shall be entitled to rely and act upon any
written instrument received by it from either party, and if a corporation,
purporting to be executed by an officer thereof, and if a partnership,
purporting to be executed by a general partner thereof and shall not be required
to inquire into the authority of such officer or partner or the correctness of
the facts stated in said instrument. By acceptance of this agreement, Escrow
Agent agrees to use its best judgment and good faith in the performance of any
of its obligations and duties under this Agreement and shall incur no liability
to any person for its acts or omissions hereunder, except for those acts or
omissions which may result from its gross negligence or willful misconduct. Upon
disposition by the Escrow Agent, in accordance with the terms hereof, of the
cash deposited with the Escrow Agent hereunder, the Escrow Agent shall be fully
and finally released and discharged from any and all duties, obligations, and
liabilities hereunder.
8. The Escrow Agent shall be reimbursed for any reasonable expenses
incurred by it hereunder, including the reasonable fees of any attorneys which
it may wish to consult in connection with the performance of its duties
hereunder. Such compensation and expenses shall be paid and reimbursed to the
Escrow Agent one-half by Purchaser and one-half by Seller.
9. In the event of a dispute between any of the parties hereto as to
their respective rights and interests hereunder, the Escrow Agent shall be
entitled to hold any and all cash then in its possession hereunder until such
dispute shall have been resolved by the parties in dispute and the Escrow Agent
shall have been notified by instrument jointly signed by all of the parties in
dispute, or until such dispute shall have been finally adjudicated by a court of
competent jurisdiction.
10. Any notice which any party may be required or may desire to give
hereunder shall be deemed to have been duly given when personally delivered,
against receipt therefor signed by the party to whom the notice is given, or
with respect to any party other than the Escrow Agent, on the next business day
if sent by overnight courier, or on the fourth business day after mailing by
certified or registered mail, postage prepaid, addressed as set forth below, or
to such other address as a party hereto may designate by a notice to the other
parties. Any notice mailed, sent by facsimile transmission, or given to the
Escrow Agent shall be deemed given only when received.
Seller: Highland Square Partners, Ltd.
c/o Transwestern Property Company
6671 Southwest Freeway, Suite 200
Houston, Texas 77074
Attention: Charles L. Scoville
Fax: (713) 270-0688
<PAGE>
Purchaser: United Investors Realty Trust
5847 San Felipe, Suite 850
Houston, Texas 77057-3008
Attention: Randall D. Keith
Fax: (713) 270-6285
Escrow Agent: Safeco Land Title Company
8080 N. Central Expressway, Suite 500
Dallas, Texas 75206
Attention: Maggie Fielding
Fax: (214) 360-3696
11. The Escrow Agent hereby consents and agrees to all of the
provisions hereof, and agrees to accept, as Escrow Agent hereunder, all cash and
documents deposited hereunder, and agrees to hold and dispose of said cash and
documents deposited hereunder in accordance with the terms and provisions
hereof.
12. This Escrow Agreement and all of the provisions hereof shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective legal representatives, successors and assigns.
13. This Escrow Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which shall constitute one
and the same instrument.
[Signature Page Follows]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be duly executed the day and year first above written.
PURCHASER:
UNITED INVESTORS REALTY TRUST
By:
Its:
Date Offered:
SELLER:
HIGHLAND SQUARE PARTNERS, LTD., Date Accepted:
a Texas limited partnership
By: Highland Square GP, Inc., ESCROW AGENT:
a Texas corporation, general partner
SAFECO LAND TITLE COMPANY
By:
Name:
Title: By:
Its: Authorized Agent
<PAGE>
Schedule 1 to Escrow Agreement
WIRE TRANSFER INSTRUCTIONS
<PAGE>
RLR\140707.2\P&S AGREE\HIGHLAND\1900.699
EXHIBIT G-1
GENERAL WARRANTY DEED
THE STATE OF TEXAS )
)
COUNTY OF HARRIS )
KNOWN BY ALL MEN BY THESE PRESENTS:
That HIGHLAND SQUARE PARTNERS, LTD., a Texas limited partnership
("Grantor") for and in consideration of the sum of Ten and No/100 Dollars
($10.00) cash and other good and valuable considerations to it paid by United
Investors Realty Trust, a Texas real estate investment trust (herein called
"Grantee"), has GRANTED, BARGAINED, SOLD and CONVEYED and by these presents does
GRANT, BARGAIN, SELL and CONVEY unto the Grantee the tract of land (herein
called the "Land") in Fort Bend County, Texas more fully described in Exhibit A
hereto, together with all improvements thereon and all easements, rights-of-way,
rights and appurtenances appertaining thereto (herein collectively called the
"Property").
This General Warranty Deed is executed by Grantor and accepted by
Grantee subject to validly existing and enforceable rights, interests and
estates, if any do in fact exist, but only to the extent that the same do in
fact exist, of third parties in connection with those items set out and listed
in Exhibit B hereto (herein collectively called the "Encumbrances").
GRANTOR HAS EXECUTED AND DELIVERED THIS GENERAL WARRANTY DEED AND HAS
CONVEYED THE PROPERTY, AND GRANTEE HAS ACCEPTED THIS GENERAL WARRANTY DEED AND
HAS PURCHASED THE PROPERTY, "AS IS", "WHERE IS", AND "WITH ALL FAULTS" AND
WITHOUT REPRESENTATIONS OR WARRANTIES WHATSOEVER, EXPRESS OR IMPLIED, EXCEPT FOR
THE WARRANTY OF TITLE EXPRESSLY SET FORTH HEREIN AND THE REPRESENTATIONS AND
WARRANTIES CONTAINED IN THE REAL ESTATE PURCHASE AND SALE AGREEMENT DATED
__________, 1998 BETWEEN GRANTOR AND GRANTEE AND IN THE RECERTIFICATION OF
REPRESENTATIONS AND WARRANTIES DELIVERED CONTEMPORANEOUSLY HEREWITH BY GRANTOR
TO GRANTEE PURSUANT TO SUCH REAL ESTATE PURCHASE AND SALE AGREEMENT.
TO HAVE AND TO HOLD the Property unto Grantee, its successors and
assigns forever; and Grantor does hereby bind itself and its successors and
assigns to WARRANT and FOREVER DEFEND all and singular the Property, subject to
the validly existing and enforceable rights, if any, of third parties in
connection with the Encumbrances, unto Grantee, its successors and assigns,
against every person whomsoever lawfully claiming or to claim the same or any
part thereof.
Ad valorem taxes with respect to the Property have been prorated as of
the date hereof between Grantor and Grantee, and Grantee expressly assumes the
payment of ad valorem taxes assessed from and after the date hereof.
Address of Grantee:
United Investors Realty Trust
5847 San Felipe, Suite 850
Houston, Texas 77057-3008
<PAGE>
WITNESS THE EXECUTION HEREOF effective as of , 1998.
GRANTOR:
HIGHLAND SQUARE PARTNERS, LTD.,
a Texas limited partnership
By: Highland Square GP, Inc.,
a Texas corporation, general partner
By:
Its:
STATE OF TEXAS ss.
ss.
COUNTY OF HARRIS ss.
This instrument was acknowledged before me on , 1998 by , of Highland Square GP,
Inc., a Texas corporation which is the general partner of Highland Square
Partners, Ltd., a Texas limited partnership, as the act and deed of said limited
partnership.
Name:
Notary Public in and for
The State of
(Seal of Notary)
My commission expires:
<PAGE>
Exhibit A to General Warranty Deed
LEGAL DESCRIPTION
<PAGE>
Exhibit B to General Warranty Deed
ENCUMBRANCES
<PAGE>
EXHIBIT G-2
BILL OF SALE
("Seller"), in consideration of the sum of
Ten and No/100 Dollars ($10.00), in hand paid, and other good and valuable
consideration, the receipt, adequacy and sufficiency of which are hereby
acknowledged does hereby sell, assign, transfer, and set over to , a
("Grantee"), the personal property described on Schedule 1 attached
hereto, presently located on the real estate commonly known as and legally
described on Schedule 2 attached hereto ("Real Estate").
Seller does hereby covenant with Purchaser that at the time of delivery of this
Bill of Sale, the Personal Property is free from all encumbrances made by Seller
and that Seller will warrant and defend the same against the lawful claims and
demands of all persons claiming by, through or under Seller, but against none
other. SELLER HEREBY DISCLAIMS, AND GRANTEE HEREBY WAIVES ANY AND ALL WARRANTIES
OF MERCHANTABILITY OR WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE WITH
RESPECT TO THE PERSONAL PROPERTY BEING TRANSFERRED BY THIS INSTRUMENT.
EXECUTED this day of , 199
SELLER:
By:
Its:
<PAGE>
Schedule 1 to Bill of Sale
PERSONAL PROPERTY
<PAGE>
Schedule 2 to Bill of Sale
LEGAL DESCRIPTION
<PAGE>
EXHIBIT G-3
ASSIGNMENT AND ASSUMPTION
For and in consideration of the sum of Ten and No/100 Dollars ($10.00),
in hand paid, and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, ("Assignor") hereby sells, transfers,
conveys, assigns and sets over unto ("Assignee"), the following described
property (collectively, the "Assigned Property"):
(1) All of Assignor's right, title and interest, as lessor, in and to
all leases, licenses and other agreements (collectively, "Leases") to occupy all
or any portion of the real estate commonly known as
, and legally described on Schedule 1 attached hereto
(the "Property"), including without
limitation, the Leases listed on Schedule 2 attached hereto together with all
rents due, or to become due under each such lease, license and agreement on or
after the date hereof and all guaranties by third parties of the tenants'
obligations thereunder; and
(2) all refundable lease security deposits under the Leases (to the
extent sums are being paid to Assignee on the date hereof); and
(3) all of Assignor's right, title and interest in and to all
contracts, agreements, guarantees, warranties and indemnities, written or oral,
affecting the ownership, operation, management and maintenance of the Property
listed on Schedule 3 attached hereto (collectively, the "Contracts"); and
(4) to the extent assignable without the payment of any fee or the
occurrence of any obligation, or the execution of any documents (other than this
Assignment and Assumption) which create liability or reserve against the
Assignor, all of Assignor's right, title and interest in and to all (i) to the
extent in Assignor's possession or control, plans, models, drawings,
specifications, blueprints, surveys, engineering reports, environmental reports
and other technical descriptions or materials relating in any way to the
Property, and (ii) licenses, franchises, certificates, occupancy and use
certificates, permits, authorizations, consents, variances, waivers, approvals
and the like from any federal, state, county, municipal or other governmental or
quasi-governmental body, agency, department, board, commission, bureau or other
entity or instrumentality affecting the ownership, operation or maintenance of
the Property, including without limitation the items listed on Schedule 4
attached hereto; and
(5) to the extent assignable, all of Assignor's right, title and
interest in and to all designs, plans, drawings, specifications, and other
intangible property used by Assignor in connection with the ownership, operation
and maintenance of the Property.
<PAGE>
Seller does hereby covenant with Purchaser that at the time of delivery
of this Assignment and Assumption, the Leases and Contracts are free from all
encumbrances made by Seller and that Seller will warrant and defend the same
against the lawful claims and demands of all persons claiming by, through or
under Seller, but against none other. Except as to the special warranty of title
and any representation and warranty expressly set forth in the Real Estate
Purchase and Sale Agreement dated , 199 between Assignor and Assignee, the
Assigned Property is conveyed "as is" and Seller makes no warranty with respect
thereto.
EXECUTED this day of , 199
SELLER:
By:
Its:
<PAGE>
ACCEPTANCE
Assignee hereby accepts the foregoing assignment as of the date hereof
and as of such date hereby assumes the performance of all the terms, covenants
and conditions of the Assigned Property, including, without limitation, the
obligation to return the refundable lease security deposits under the Leases to
the extent the same are received as a credit at Closing, with respect to the
period from and after the date hereof.
Date:
ASSIGNEE:
By:
Its:
<PAGE>
Schedule 1 to Assignment and Assumption
LEGAL DESCRIPTION
<PAGE>
Schedule 2 to Assignment and Assumption
RENT ROLL
<PAGE>
Schedule 3 to Assignment and Assumption
CONTRACTS
<PAGE>
Schedule 4 to Assignment and Assumption
LICENSES
<PAGE>
EXHIBIT H
Disclosure of Lease Matters
<PAGE>
RLR\140707.2\P&S AGREE\HIGHLAND\1900.699
EXHIBIT I
TENANT ESTOPPEL CERTIFICATE
____________________, 199
Attention:
Ladies and Gentlemen:
_________________________________ ("Tenant") acknowledges that (a) ("Landlord")
has entered into an agreement with ("Purchaser") for the sale and purchase of
the building commonly known as ("Building"), (b) Landlord has requested Tenant
to execute and deliver this Tenant Estoppel Certificate to Purchaser, and (c)
Purchaser and its successors and assigns, will rely upon the certifications by
Tenant in this Tenant Estoppel Certificate in connection with the purchase of
the Building.
Tenant hereby certifies as follows:
I. Tenant currently leases in the Building the premises ("Premises")
commonly known as "Suite _____," pursuant to the terms and conditions of the
____________, dated _______________, between Landlord and Tenant, [as amended by
________________________] (collectively, the "Lease"). A true, correct and
complete copy of the Lease is attached hereto as Exhibit "A." Except for the
Lease, there are no agreements (written or oral) or documents which are binding
on Landlord in connection with the lease of the Premises. The Lease is valid,
binding and in full force and effect, and has not been modified or amended in
any manner whatsoever except as shown on Exhibit A.
2. The term of the Lease commenced on , and including any presently
exercised option or renewal term, ends on , subject to any rights of Tenant to
extend the term expressly set forth in the Lease. Tenant has no rights to extend
the term of the Lease except to the extent expressly set forth in the Lease.
3. Landlord has delivered possession of the Premises to Tenant, and
Tenant has accepted possession of, and currently occupies, the Premises.
4. The current monthly base rent payable under the Lease is
$_____________, and the current monthly payment payable under the Lease on
account of taxes and operating expenses payable under the Lease is
$___________________. Tenant's percentage share of operating expenses and real
estate taxes is %. Rent and all other charges payable under the Lease on or
before the date hereof have been paid. No amounts of monthly base rent payable
under the Lease have been prepaid except through the end of the current calendar
month, and no other charges payable under the Lease have been prepaid for any
period, other than estimated payments of operating expenses and taxes.
5. All reconciliations of actual taxes and operating expenses for
calendar year 1996 and all previous calendar years ("Expenses") with payments
made by Tenant therefor have been made and a report thereof delivered to Tenant.
6. Tenant has no options, rights of offer, rights of refusal or other
rights to purchase all or any portion of the Building. Tenant has no options,
rights of offer, rights of refusal or other rights to expand the Premises or
lease any other premises in the Building, except to the extent expressly set
forth in the Lease.
7. To Tenant's knowledge, Tenant has no current claims against Landlord
under the terms of the Lease requiring Landlord to perform any improvements or
repairs to the Premises, and all allowances, reimbursements or other obligations
of Landlord for the payment of monies to or for the benefit of Tenant have been
fully paid, all in accordance with the terms of the Lease.
8. To Tenant's knowledge, neither Landlord nor Tenant is in default in
the performance of any covenant, agreement or condition contained in the Lease,
and no event has occurred and no condition exists which, with the giving of
notice or the lapse of time, or both, would constitute a default by any party
under the Lease.
9. Tenant is not the subject of any bankruptcy, insolvency or similar
proceeding in any federal, state or other court or jurisdiction.
10. Tenant is in possession of the Premises and has not subleased any
portion of the Premises or assigned or otherwise transferred any of its rights
under the Lease.
11. Tenant has deposited _____________________ Dollars
($________________) with Landlord as a security deposit under the Lease.
12. Tenant will attorn to and recognize Purchaser as the Landlord under
the Lease and will pay all rents and other amounts due thereunder to Purchaser
upon notice to Tenant that Purchaser has become the owner of Landlord's interest
in the Premises under the Lease.
13. The individual executing this Tenant Estoppel Certificate has the
authority to do so on behalf of Tenant and to bind Tenant to the terms hereof.
[Tenant Name]
By:
Its:
<PAGE>
EXHIBIT J
RECERTIFICATION OF REPRESENTATIONS AND WARRANTIES
The undersigned hereby certifies that each of the representations and
warranties made in Paragraph 8 of that certain Real Estate Purchase and Sale
Agreement dated , 199 by and between the undersigned and is true, correct and
complete as of the date hereof.
Dated ________________, 199
By:
Its:
<PAGE>
<PAGE>
EXHIBIT 10.36:
Exhibit K
MORTGAGE NOTE
$4,525,000 November 26, 1996
FOR VALUE RECEIVED, HIGHLAND SQUARE PARTNERS, LTD., a Texas limited
partnership having its principal office c/o Transwestern Property Company, 6671
Southwest Freeway, Suite 200, Houston, Texas 77074-2285 ("Maker"), promises to
pay to the order of Belgravia Capital Corporation, a Nevada corporation, or its
assigns ("Payee") having its principal office at 19900 MacArthur Boulevard,
Suite 1100, Irvine, California 92612 the Principal Amount (as defined below),
together with interest from the date hereof at the Interest Rate (as defined
below). Interest accruing hereunder shall be calculated on the basis of a
360-day year of twelve 30-day months.
WHEN USED HEREIN, the following capitalized terms shall have the
following meanings:
"Commencement Date" shall be January 1, 1997.
"Closing Date" shall be November 27, 1996.
"Default Rate" shall be Interest Rate plus five percent (5.0%).
"Interest Rate" shall be Eight and 87/100ths percent (8.87%) per annum.
"Lockout Period" shall be the period from the Closing Date through five
years from the first day of the first full month following the Closing Date.
"Maturity Date" shall be ten years from the first day of the first full
month following the Closing Date.
"Monthly Amount" shall be $37,571.63.
"Payment Date" shall be the first business day of each month commencing
on the first business day of the second full month after the Closing Date and
continuing to and including the Maturity Date.
"Principal Amount" shall be Four Million Five Hundred Twenty-Five
Thousand Dollars ($4,525,000).
The Principal Amount and interest thereon shall be due and payable in
lawful money of the United States as follows:
(a)
<PAGE>
On the date hereof, all interest on the unpaid balance through
the end of the month in which the Closing Date occurs shall be due and payable.
Thereafter, commencing on the Commencement Date, 120 equal monthly installments
of principal and interest at the Monthly Amount each shall be due and payable.
Each installment of principal and interest shall be applied first to interest
and the remainder thereof to reduction of principal. Each monthly installment
shall be due on each Payment Date. In addition, all amounts advanced by Payee
pursuant to applicable provisions of the Security Documents (as hereinafter
defined), together with any interest at the Default Rate or other charges as
therein provided, shall be immediately due and payable hereunder. In the event
any such advance is not so repaid by Maker, Payee may, at its option, first
apply any payments received hereunder to repay said advances together with any
interest thereon or other charges as provided in the Security Documents, and the
balance, if any, shall be applied in payment of any installment then due. The
entire remaining unpaid balance of principal of this Note, all interest accrued
thereon and all other sums payable hereunder or under the Security Documents
shall be due and payable in full on the Maturity Date.
(a) Amounts due on this Note shall be payable, without any counterclaim, setoff
or deduction whatsoever, at the office of Payee or its agent or designee at the
address set forth in Exhibit 1 or at such other place as Payee or its agent or
designee may from time to time designate in writing.
(a) This Note is secured by a Deed of Trust, Mortgage, Security Agreement and
Assignment of Rents and Leases of even date herewith (the "Mortgage") from Maker
to Payee and by an Assignment of Rents and Leases of even date herewith (the
"Assignment") from Maker to Payee. The Mortgage, the Assignment and any other
instrument given at any time to secure this Note are hereinafter collectively
called the "Security Documents."
(a) Maker has the right to prepay the principal of this Note in full or in part
on any Payment Date after the end of the Lockout Period, upon sixty days' prior
written notice and payment, together with the portion of the principal to be
prepaid, of a prepayment premium in an amount calculated as specified in
Appendix 1. The calculation of the prepayment premium shall be made by Payee and
shall, absent manifest error, be conclusive. In no event shall the prepayment
premium as computed hereunder be less than one percent (1.0%) of the portion of
the principal amount of this Note that is being prepaid. In the event that this
Note is prepaid from the proceeds of insurance or condemnation awards in
accordance with Sections 10, 11 and 12 of the Mortgage prior to the end of the
Lockout Period, the prepayment premium will be equal to one percent (1.0%). In
the event this Note is prepaid from the proceeds of insurance or condemnation
awards in accordance with Sections 10, 11 and 12 of the Mortgage after the end
of the Lockout Period, a prepayment premium shall be payable calculated as
specified in Appendix 1. Notwithstanding the foregoing, this Note may be prepaid
without a prepayment premium during the 180 day period prior to the Maturity
Date. Upon acceleration of this Note in accordance with its terms and the terms
of the Security Documents, Maker agrees to pay the prepayment premium described
above in the amount that would be due if a voluntary payment were made on the
date of such acceleration. A tender of payment of the amount necessary to pay
and satisfy the entire unpaid principal balance of this Note or any portion
thereof at any time after an Event of Default under the Mortgage or an
acceleration by Payee of the indebtedness evidenced hereby, whether such payment
is tendered voluntarily, during or after foreclosure of the Mortgage, or
pursuant to realization upon other security, shall constitute a purposeful
evasion of the prepayment terms of this Note, shall be deemed to be a voluntary
prepayment hereof, and Maker shall be required to pay the prepayment premium as
described above. Partial prepayments of principal shall not change the Payment
Dates or amounts of subsequent monthly installments, unless Payee shall
otherwise agree in writing.
(a) If Maker defaults in the payment of any installment of principal and
interest on the date on which it shall fall due or in the performance of any of
the agreements, conditions, covenants, provisions or stipulations contained in
this Note or in the Security Documents, and if such default shall continue
beyond any grace period provided for in the Mortgage so as to constitute an
Event of Default thereunder, then Payee, at its option and without further
notice to Maker, may declare immediately due and payable the entire unpaid
principal balance of this Note, together with interest thereon at an annual rate
after the date of such default equal to the Default Rate, together with all sums
due by Maker under the Security Documents, anything herein or in the Security
Documents to the contrary notwithstanding. The foregoing provision shall not be
construed as a waiver by Payee of its right to pursue any other remedies
available to it under the Mortgage, this Note or any other Security Document,
nor shall it be construed to limit in any way the application of the Default
Rate. Any payment hereunder may be enforced and recovered in whole or in part at
such time by one or more of the remedies provided to Payee in this Note or in
the Security Documents. In the event that: (i) this Note or any Security
Document is placed in the hands of an attorney for collection or enforcement or
is collected or enforced through any legal proceeding; (ii) an attorney is
retained to represent Payee in any bankruptcy, reorganization, receivership, or
other proceedings affecting creditors' rights and involving a claim under this
Note or any Security Document; (iii) an attorney is retained to protect or
enforce the lien of the Mortgage or any Security Document; or (iv) an attorney
is retained to represent Payee in any other proceedings whatsoever in connection
with this Note, the Mortgage, any of the Security Documents or any portion of
the Mortgaged Property subject thereto, then Maker shall pay to Payee all
reasonable attorney's fees, costs and expenses incurred in connection therewith,
including costs of appeal, together with interest on any judgment obtained by
Payee at the Default Rate.
(a) If Maker defaults in the payment of any monthly installment on the Payment
Date, and such default is not cured within five days thereafter, then Maker
shall pay to Payee a late payment charge in an amount equal to five percent
(5.0%) of the amount of the installment not paid as aforesaid. An additional
late charge equal to five percent (5.0%) of the monthly payment due will be
charged for each successive month the payment remains outstanding. Said late
charge payments, if payable, shall be secured by the Mortgage and the other
Security Documents, shall be payable without notice or demand by Payee, and are
independent of and have no effect upon the rights of Payee under paragraph (e)
above.
(a) Maker and all endorsers, sureties and guarantors hereby jointly and
severally waive all applicable exemption rights, valuation and appraisement,
presentment for payment, demand, notice of demand, notice of nonpayment or
dishonor, protest and notice of protest of this Note, and all other notices in
connection with the delivery, acceptance, performance, default or enforcement of
the payment of this Note. Maker and all endorsers, sureties and guarantors
consent to any and all extensions of time, renewals, waivers or modifications
that may be granted by Payee with respect to the payment or other provisions of
this Note and to the release of the collateral or any part thereof, with or
without substitution, and agree that additional makers, endorsers, guarantors or
sureties may become parties hereto without notice to them or affecting their
liability hereunder.
(a) Payee shall not be deemed, by any act of omission or commission, to have
waived any of its rights or remedies hereunder unless such waiver is in writing
and signed by Payee, and then only to the extent specifically set forth in
writing. A waiver of one event shall not be construed as continuing or as a bar
to or waiver of any right or remedy to a subsequent event.
(a) This Note shall be governed by and construed in accordance with the laws of
the State in which the Mortgaged Property is located (the "State").
(a) The parties hereto intend and believe that each provision in this Note
comports with all applicable law. However, if any provision in this Note is
found by a court of law to be in violation of any applicable law, and if such
court should declare such provision of this Note to be unlawful, void or
unenforceable as written, then it is the intent of all parties hereto that such
provision shall be given full force and effect to the fullest possible extent
that is legal, valid and enforceable, that the remainder of this Note shall be
construed as if such unlawful, void or unenforceable provision were not
contained therein, and that the rights, obligations and interest of Maker and
the holder hereof under the remainder of this Note shall continue in full force
and effect; provided, however, that if any provision of this Note which is found
to be in violation of any applicable law concerns the imposition of interest
hereunder, the rights, obligations and interests of Maker and Payee with respect
to the imposition of interest hereunder shall be governed and controlled by the
provisions of the following paragraph.
(a) It being the intention of Payee and Maker to comply with the laws of the
State with regard to the rate of interest charged hereunder, it is agreed that,
notwithstanding any provision to the contrary in this Note, the Mortgage, or any
of the other Security Documents, no such provision, including without limitation
any provision of this Note providing for the payment of interest or other
charges, shall require the payment or permit the collection of any amount
("Excess Interest") in excess of the maximum amount of interest permitted by law
to be charged for the use or detention, or the forbearance in the collection, of
all or any portion of the indebtedness evidenced by this Note. If any Excess
Interest is provided for, or is adjudicated to be provided for, in this Note,
the Mortgage, or any of the other Security Documents, then in such event:
(i) the provisions of this paragraph shall govern;
(ii) Maker shall not be obligated to pay any Excess Interest;
(i) any Excess Interest that Payee may have received hereunder shall, at the
option of Payee, be (x) applied as a credit against the unpaid principal balance
then due under this Note, accrued and unpaid interest thereon not to exceed the
maximum amount permitted by law, or both, (y) refunded to the payor thereof or
(z) any combination of the foregoing;
(i) the applicable interest rate or rates provided for herein shall be
automatically subject to reduction to the maximum lawful rate allowed to be
contracted for in writing under the applicable usury laws of the aforesaid
State, and this Note, the Mortgage and the other Security Documents shall be
deemed to have been, and shall be, reformed and modified to reflect such
reduction in such interest rate or rates; and
(i) Maker shall not have any action or remedy against Payee for any damages
whatsoever or any defense to enforcement of this Note, the Mortgage or any other
Security Document arising out of the payment or collection of any Excess
Interest.
(a) Upon any endorsement, assignment, or other transfer of this Note by Payee or
by operation of law, the term "Payee," as used herein, shall mean such endorsee,
assignee, or other transferee or successor to Payee then becoming the holder of
this Note. This Note shall inure to the benefit of Payee and its successors and
assigns and shall be binding upon the undersigned and its successors and
assigns. The term "Maker" as used herein shall include the respective successors
and assigns, legal and personal representatives, executors, administrators,
devisees, legatees and heirs of Maker.
(a) Any notice, demand or other communication which any party may desire or may
be required to give to any other party shall be in writing and shall be given as
provided in the Mortgage.
(a) To the extent that Maker makes a payment or Payee receives any payment or
proceeds for Maker's benefit, which are subsequently invalidated, declared to be
fraudulent or preferential, set aside or required to be repaid to a trustee,
debtor in possession, receiver, custodian or any other party under any
bankruptcy law, common law or equitable cause, then, to such extent, the
obligations of Maker hereunder intended to be satisfied shall be revived and
continue as if such payment or proceeds had not been received by Payee.
(a) Maker shall execute and acknowledge (or cause to be executed and
acknowledged) and deliver to Payee all documents, and take all actions,
reasonably required by Payee from time to time to confirm the rights created or
now or hereafter intended to be created under this Note and the Security
Documents, to protect and further the validity, priority and enforceability of
this Note and the Security Documents, to subject to the Security Documents any
property of Maker intended by the terms of any one or more of the Security
Documents to be encumbered by the Security Documents, or otherwise carry out the
purposes of the Security Documents and the transactions contemplated thereunder;
provided, however, that no such further actions, assurances and confirmations
shall increase Maker's obligations under this Note.
(a) No modification, amendment, extension, discharge, termination or waiver (a
"Modification") of any provision of this Note, or any one or more of the other
Security Documents, nor consent to any departure by Maker therefrom, shall in
any event be effective unless the same shall be in a writing signed by the party
against whom enforcement is sought, and then such waiver or consent shall be
effective only in the specific instance, and for the purpose, for which given.
Except as otherwise expressly provided herein, no notice to, or demand on, Maker
shall entitle Maker to any other or future notice or demand in the same, similar
or other circumstances. Payee does not hereby agree to, nor does Payee hereby
commit itself to, enter into any Modification.
(a) Maker hereby expressly and unconditionally waives, in connection with any
suit, action or proceeding brought by Payee on this Note, any and every right it
may have to (a) a trial by jury, (b) interpose any counterclaim therein (other
than a counterclaim which can only be asserted in the suit, action or proceeding
brought by Payee on this Note and cannot be maintained in a separate action) and
(c) have the same consolidated with any other or separate suit, action or
proceeding.
(a) Notwithstanding any provision to the contrary in the Mortgage or this Note,
Payee shall not have any recourse to any asset of Maker or its partners other
than the Mortgaged Property in order to satisfy the indebtedness for payment of
the principal and interest evidenced by this Note, and Payee's sole recourse for
satisfaction of the payment of principal and interest evidenced by this Note
shall be to exercise its rights against the Mortgaged Property encumbered by the
Mortgage and the other collateral securing this Note. The foregoing sentence
shall not be deemed or construed to be a release of the indebtedness evidenced
by this Note or in any way impair, limit or otherwise affect the lien of the
Mortgage or any such other instrument securing repayment of this Note or prevent
Payee from naming Maker, its partners, or their successors or assigns as a
defendant to any action to enforce any remedy for default so long as there is no
personal or deficiency money judgment sought or entered against Maker, its
partners, or their successors or assigns for payment of principal and interest
evidenced by this Note. Notwithstanding the foregoing provisions of this
paragraph (s), it is expressly understood and agreed that the aforesaid
limitation of liability shall no way affect or apply to Maker's or its partners'
continued personal liability for the payment to Payee of:
(i) any loss or damage occurring by reason of all
or any part of the Mortgaged Property being encumbered by a
voluntary lien (other than the Mortgage) granted by Maker;
(ii) any Rents, issues, profits and/or income
collected by Maker in excess of normal and verifiable
operating expenses of the Mortgaged Property after default by
Maker hereunder, under the Mortgage or under any other
instrument securing or referring to this Note;
(iii) unrefunded security deposits made by tenants of
the Mortgaged Property;
(iv) payment of Taxes, as defined in Section 5 of
the Mortgage, and insurance premiums, payment of which is
required to be made by Maker under the Mortgage;
(v) Rents, security deposits with respect to leases
of the Mortgaged Property, insurance proceeds, condemnation
awards and any other payments or consideration which Maker
receives and to which Payee is entitled pursuant to the terms
of the Mortgage or of any other Security Document;
(vi) damage to the Mortgaged Property from waste
committed or permitted by Maker;
(vii) loss or damage occurring by reason of the
failure of Maker to comply with any of the provisions of
Section 33 of the Mortgage;
(viii) any loss or claim incurred by or asserted
against Payee as a result of fraud or material
misrepresentation by Maker or any of the partners thereof with
respect to any certification, representation or warranty made
by Maker or such other persons to Payee herein or in any of
the Security Documents; and
(ix) reasonable attorney's fees incurred by Payee in
connection with suit filed on account of any of the foregoing
clauses (i) through (viii).
<PAGE>
IN WITNESS WHEREOF, Maker has caused this Note to be executed
and delivered as of the day and year first above written.
HIGHLAND SQUARE PARTNERS, LTD.,
a Texas general partnership
By: HIGHLAND SQUARE GP, INC.,
a Texas corporation
its general partner
By:
Name:
Title:
[WITNESS]
- ------------------------------
<PAGE>
APPENDIX 1
Calculation of Prepayment Premium
The prepayment premium shall be equal to the product of (i) a fraction
whose numerator is an amount equal to the portion of the principal balance of
this Note being prepaid and whose denominator is the entire outstanding
principal balance of this Note on the date of such prepayment (after subtracting
the amount of any scheduled principal payment due on such Payment Date),
multiplied by (ii) an amount equal to the remainder obtained by subtracting (x)
an amount equal to the entire outstanding principal balance of this Note as of
the date of such prepayment (after subtracting the amount of any scheduled
principal payment due on such Payment Date) from (y) the present value as of the
date of such prepayment of the remaining scheduled payments of principal and
interest on this Note (including any final installment of principal payable on
the Maturity Date) determined by discounting such payments at the Discount Rate
(as hereinafter defined).
For purposes of this Note:
(x) "Discount Rate" shall mean the rate which, when compounded
monthly, is equivalent to the Treasury Rate (as defined
below) plus 275 basis points when compounded semi-annually;
and
(y) "Treasury Rate" shall mean the yield calculated by the linear
interpolation of the yield, as reported in Federal Reserve
Statistical Release H.15-Selected Interest Rates under the
heading "U.S. government securities/Treasury constant
maturities" for the week ending prior to the date of the
relevant prepayment of this Note, of U.S. Treasury constant
maturities with a maturity date (one longer and one shorter)
most nearly approximating the Maturity Date of this Note. In
the event Release H.15 is no longer published, Payee shall
select a comparable publication to determine the Treasury
Rate.
<PAGE>
EXHIBIT 1
Amounts due on this note shall be payable to Wells Fargo Realty Finance
at the following address:
Wells Fargo Realty Finance
P.O. Box 5902
Santa Rosa, CA 95402
