EXHIBIT 10.02
AGREEMENT FOR PURCHASE AND SALE
OF REAL PROPERTY AND ESCROW INSTRUCTIONS
THIS AGREEMENT FOR PURCHASE AND SALE OF REAL PROPERTY AND ESCROW INSTRUCTIONS
("Agreement") is made and entered into as of this 11th day of February, 2004, by
and between LAEROC PARTNERS, INC., a California corporation, the manager for
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, LLC, a California limited liability company (collectively,
the "SELLER") and TRIPLE NET PROPERTIES, LLC, a Virginia limited liability
company ("BUYER"), with reference to the following facts:
A. Seller owns certain real property located in Los Angeles
County, California and more specifically described in Exhibit
A attached hereto (the "Land"), commonly known as ▇▇▇▇▇▇▇▇
Square and such other assets, as the same are herein
described.
B. Seller desires to sell to Buyer and Buyer desires to purchase
from Seller the Land and the associated assets.
NOW, THEREFORE, in consideration of the mutual covenants, premises and
agreements herein contained, the parties hereto do hereby agree as follows:
1. Purchase and Sale.
1.1. The purchase and sale includes, and at Close of Escrow
(hereinafter defined) Seller shall sell, transfer, grant and
assign to Buyer, Seller's entire right and interest in and to
all of the following (hereinafter sometimes collectively, the
"Property"):
1.1.1. The Land, together with all structures, buildings,
improvements, machinery, fixtures, and equipment
affixed or attached to the Land and all easements,
development rights, rights of way, and other rights
appurtenant to the Land (all of the foregoing being
collectively referred to herein as the "Real
Property");
1.1.2. All leases (the "Leases"), including associated
amendments, with all persons ("Tenants") leasing the
Real Property or any part thereof or hereafter
entered into in accordance with the terms hereof
prior to Close of Escrow, together with all security
and other deposits actually received and held in
connection with the Leases, Lease guarantees and
other similar credit enhancements providing
additional security for such Leases;
1.1.3. All tangible and intangible personal property owned
by Seller located on or used in connection with the
Real Property, including, specifically, without
limitation, equipment, furniture, tools and supplies,
any website maintained by the Seller solely in
connection with the Property and relating to no other
properties or business of Seller or its affiliates
and all related intangibles including Seller's
interest in the name "▇▇▇▇▇▇▇▇ Square" (the "Personal
Property");
1.1.4. All service contracts, agreements, warranties and
guaranties relating to the operation, use or
maintenance of the Property (the "Contracts"); and
1.1.5. To the extent transferable, all building permits,
certificates of occupancy and other certificates,
permits, licenses and approvals relating to the
Property (the "Permits").
2. Purchase Price.
The total Purchase Price of the Property shall be Twenty Three Million
Eight Hundred Eighty Thousand and No/100 Dollars ($23,880,000)
("Purchase Price"), and payable as follows:
2.1. Deposit/Further Payments.
2.1.1. Within two (2) business days following the date a
fully executed original of this Agreement is
delivered to the Escrow Holder (hereinafter defined)
(such delivery date hereinafter the "Effective
Date"), Buyer shall deposit into Escrow (hereinafter
defined) the amount of One Hundred Thousand and
No/100 Dollars ($100,000) (the "Initial Deposit"), in
the form of a wire transfer payable to Fidelity
National Title, Attn: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ("Escrow
Holder"). Escrow Holder shall place the Initial
Deposit into an interest bearing money market account
at a bank or other financial institution reasonably
satisfactory to Buyer, and interest thereon shall be
credited to Buyer's account and shall be deemed to be
part of the Initial Deposit.
2.1.2. Within one (1) business day following the conclusion
of the Due Diligence Period (hereinafter defined),
and absent the termination of this Agreement pursuant
to Paragraph 5.2, Buyer shall deliver to Escrow
Holder the additional sum of Four Hundred Thousand
and No/100 Dollars ($400,000), (the "Second Deposit"
and together with the Initial Deposit, the "Deposit")
shall become non-refundable to Purchaser.
2.1.3. On or before Close of Escrow, Buyer shall deposit
with the Escrow Holder to be held in Escrow the
balance of the Purchase Price, in immediately
available funds by wire transfer made payable to
Escrow Holder.
2.1.4. In the event that this Agreement is terminated by
Buyer in accordance with its terms, the Deposit shall
be immediately and automatically paid over to Buyer
without the need for any further action by either
party hereto.
3. Title to Property.
3.1. Title Insurance.
Provided Buyer approves or is deemed to approve the status of
title to the Property as described below, Seller will, at
Buyer's sole expense, cause Fidelity National Title (the
"Title Company") to issue an Extended Coverage ALTA Owner's
Policy of Title Insurance (the "Title Policy") effective as of
the Closing Date for and on behalf of Buyer in the total
amount of the Purchase Price and obtainable at standard rates
insuring good, marketable and insurable title in and to the
Real Property. The Title Policy shall be free and clear of
exceptions except as follows:
3.1.1. Real property taxes and assessments, which are a lien
not yet due;
3.1.2. The Permitted Exceptions (hereinafter defined)
included in such policy and approved by Buyer as
herein described.
3.2. Procedure for Approval of Title.
Seller shall, no later than ten (10) business days following
the Effective Date, provide to Buyer a current title insurance
commitment and/or preliminary title report for the Real
Property, including legible copies of all items identified as
exceptions therein (the "Title Documents"). Buyer shall have
ten (10) business days following the later of (a) the
Effective Date; and (b) the receipt of the Title Documents to
review and approve, in writing, the condition of the title to
the Real Property ("Title Review Period"). If the Title
Documents reflect or disclose any defect, exception or other
matter affecting the Real Property ("Title Defects") that is
unacceptable to Buyer, then Buyer shall provide Seller with
written notice of Buyer's objections no later than the
conclusion of the Title Review Period; provided, however, if
Buyer shall fail to notify Seller in writing within the Title
Review Period either that the condition of title is acceptable
or of any
specific objections to the state of title to the Real
Property, then Buyer shall be deemed to have objected to all
exceptions to title or other conditions or matters which are
described in the Title Documents. Seller may, at its sole
option, elect, by written notice given to Buyer within three
(3) days following the later of (a) Seller's receipt of
Buyer's objections to the Title Documents and (b) the
conclusion of the Title Review Period ("Seller's Notice
Period"), to cure or remove the objections made or deemed to
have been made by Buyer. The failure of Seller to deliver
written notice electing to cure any or all such objected to
exceptions during the Seller's Notice Period shall be deemed
an election by Seller not to cure such exceptions. Should
Seller elect to attempt to cure or remove any objection,
Seller shall have fifteen (15) days from the conclusion of the
Title Review Period or such longer period of time, not to
exceed sixty (60) days, as may be necessary to so cure,
provided Seller commences to cure within the fifteen (15) day
period and diligently prosecutes such cure to completion (such
period being referred to herein as the "Cure Period") in which
to accomplish the cure. In the event Seller elects (or is
deemed to have elected) not to cure or remove any objection,
then Buyer shall be entitled, as Buyer's sole and exclusive
remedies, either to (i) terminate this Agreement and obtain a
refund of the Deposit or (ii) waive any objections that Seller
has not elected to cure and close this transaction as
otherwise contemplated herein. The failure of Buyer to provide
written notice to Seller within ten (10) days following the
expiration of the Seller's Notice Period waiving any
objections Seller has not elected to cure shall be deemed an
election by Buyer to terminate this Agreement. Any exceptions
to title accepted by Buyer pursuant to the terms of this
paragraph shall be deemed "Permitted Exceptions."
4. Due Diligence Items.
4.1. Seller shall, within five (5) days after the Effective Date
(the "Delivery Date"), deliver to Buyer each of the items
listed in Exhibit B (collectively, the "Due Diligence Items").
4.2. Estoppel Certificates.
Seller shall obtain and deliver to Buyer, no later than ten
(10) days prior to Close of Escrow, estoppel certificates from
all Tenants of the Real Property occupying at least five
thousand (5,000) rentable square feet (the "Major Tenants")
and (b) eighty percent (80%) of all remaining Tenants ("Minor
Tenants") of the Real Property (measured by square footage
occupied) (the "Required Percentage Minor Estoppels"),
substantially in the form of Exhibit D attached hereto and
incorporated herein by this reference. In the event Seller is
unable to
obtain the Required Percentage Minor Estoppels despite
diligent efforts to do so, Seller may deliver to Buyer an
estoppel certificate executed by Seller substantially in the
form of Exhibit D attached hereto, modified as appropriate for
an estoppel certificate executed by Seller, covering
sufficient estoppels that, together with those obtained from
the Minor Tenants, equal the Required Percentage Minor
Estoppels; provided, however, Seller shall thereafter continue
to use diligent efforts to obtain an estoppel certificate
executed by any such Tenant; and provided, further, that Buyer
shall not be obligated to accept a seller estoppel with
respect to any Major Tenant. Whether executed by the Tenant or
by Seller, the matters certified in the estoppel certificates
shall be subject to Buyer's reasonable approval. Buyer shall
notify Seller within three (3) business days following receipt
of a copy of any executed estoppel certificate of Buyer's
approval or disapproval and the basis of such disapproval, if
disapproved. If (a) Buyer reasonably disapproves of any
estoppel certificate, and Seller is unable to deliver a
reasonably acceptable estoppel certificate prior to the Close
of Escrow, and, without such estoppel certificate Seller will
have failed to deliver the Required Percentage Estoppels or
(b) Seller is unable to deliver acceptable forms of the Major
Estoppels, Buyer may terminate this Agreement upon written
notice to Seller or waive the requirements of this paragraph
and proceed to Closing. If Buyer elects to terminate this
Agreement in accordance with the foregoing sentence, Buyer
shall be entitled to a refund of the Deposit without any
further action required by any party, and neither party shall
have any further obligation to the other. Seller's failure to
provide the Major Tenant Estoppels and/or the Required
Percentage Minor Estoppels shall not be deemed a breach or
default hereunder.
4.2. Subordination Agreements.
Seller shall use diligent efforts to obtain subordination,
non-disturbance and attornment agreements required by Buyer's
lender substantially in the form of Exhibit E attached hereto
("SNDAs"); provided, however, that (a) Seller's failure to
obtain all or any SNDAs despite such efforts shall not be
deemed a breach or default hereunder and (b) the provision of
said SNDAs shall not be a condition to Buyer's obligations
hereunder and shall not give rise to any right of Buyer to
terminate this Agreement.
5. Inspections.
5.1 Procedure; Indemnity.
Buyer, at its sole expense, shall have the right to conduct
feasibility, environmental, engineering and physical studies
of the Real Property at any time from and after Effective Date
and for a period of Thirty (30) calendar days thereafter (the
"Due Diligence Period"); provided, however, if the Due
Diligence Items are not delivered on the Delivery Date, Buyer
may, by written notice delivered prior to the conclusion of
the original Due Diligence Period, extend the Due Diligence
Period for a period equal to the associated delay in delivery
of such materials beyond the Delivery Date. Buyer and its duly
authorized agents or representatives shall be permitted to
enter upon the Real Property at all reasonable times during
the Due Diligence Period upon forty-eight (48) hours' written
notice to Seller, in order to conduct tenant interviews (but
only with the prior written consent of Seller in each
instance, which consent shall not be unreasonably withheld),
engineering studies, soil tests and any other inspections
and/or tests that Buyer may deem necessary or advisable
(collectively, the "Inspections"). Buyer agrees to promptly
discharge any liens that may be imposed against the Real
Property as a result of Buyer's Inspections and to defend,
indemnify and hold Seller and Seller's parent company and
their respective members, affiliates, subsidiaries, officers,
directors, shareholders, participants, affiliates, employees,
consultants, representatives, invitees, agents and contractors
(collectively, "Seller Parties") harmless from all claims,
suits, losses, costs, expenses (including without limitation
court costs and attorneys' fees), liabilities, judgments and
damages incurred by Seller as a result of any Inspections
performed by Buyer.
5.1.1 All due diligence conducted by Buyer shall be
undertaken by Buyer at Buyer's sole cost and expense.
Buyer's due diligence shall be concluded without any
cost or liability to Seller.
5.1.2 Buyer acknowledges and agrees that the Due Diligence
Period is an adequate time period to perform all of
its due diligence and obtain Due Diligence Items
related to the Property. Buyer covenants and agrees
it shall keep confidential all information relating
to the Property obtained by Buyer, except that Buyer
may disclose same to its attorneys, affiliates,
agents, representatives, engineers, architects,
consultants, lenders and investors, who shall also
agree to maintain such information in confidence.
Notwithstanding any provisions contained in this
Agreement to the contrary, Buyer's covenants under
this paragraph to keep information relating to the
Property confidential shall expressly survive any
termination of this Agreement, but shall not survive
the Close of Escrow (hereinafter defined).
5.1.3 Buyer shall at all times conduct its due diligence in
compliance with applicable law and the terms of the
Leases, and in a manner so as to not cause any
material damage, loss, cost or expenses to Seller,
the Property or the tenants of the Property (and
without unreasonably interfering with or disturbing
any tenant at the Property), and Buyer shall promptly
restore the Property to its condition immediately
preceding such inspections and examinations and shall
keep the Property free and clear of any mechanic's
liens or materialmen's liens in connection with such
inspections and examinations. Any intrusive physical
testing (environmental, structural or otherwise) of
the Property (such as soil borings or the like) and
any inspection requiring entry into any of the
buildings located on the Property shall be conducted
by Buyer only after obtaining Seller's prior written
consent to such testing (including the plans for, and
drilling location of, all such tests which are
required for purposes of either a Phase II
environmental report or a seismic report, as
applicable), which consent shall not be unreasonably
withheld. Buyer shall use reasonable efforts to
schedule such tests to permit Seller or its
representatives, at Seller's option and expense, to
be present; provided, however, that Seller's or its
representative's presence at any such inspection
shall not limit in any way Buyer's liability
hereunder.
5.1.4 Buyer shall obtain, at Buyer's sole cost and expense
and prior to commencement of any activities on the
Property, a policy of commercial general liability
insurance covering any and all liability of Buyer and
Seller with respect to or arising out of any
investigative activities. Such policy of insurance
shall be kept and maintained in force during the term
of this Agreement and shall cover any claims or
damages suffered by persons or property resulting
from any acts or omissions of Buyer, Buyer's
employees, agents, contractors, suppliers,
consultants or other related parties. Such policy of
insurance shall have liability limits of not less
than One Million Dollars ($1,000,000) combined single
limit per occurrence for bodily injury, personal
injury and property damage liability. Such insurance
policy shall be an occurrence policy and shall name
Seller and its successors and assigns as an
additional insured and shall be in form and substance
and issued by an insurance company reasonably
satisfactory to Seller.
5.2. Approval.
5.2.1 Buyer shall have until the conclusion of the Due
Diligence Period (as the same may be extended in
accordance with the terms of Paragraph 5.1 above) to
approve or disapprove of the Inspections and the Due
Diligence Items enumerated in Exhibit B. If Buyer
shall fail to deliver a written notice to Seller and
Escrow Holder within the Due Diligence Period
approving the condition of the Real Property this
Agreement shall thereupon be automatically
terminated, Buyer shall not be entitled to purchase
the Real Property, Seller shall not be obligated to
sell the Real Property to Buyer and the parties shall
be relieved of any further obligation to each other
with respect to the Real Property. Upon termination,
Escrow Holder shall, without any further action
required from any party, return all documents and
funds, including the Deposit, to the parties who
deposited same and no further duties shall be
required of Escrow Holder.
5.2.2 Notwithstanding anything to the contrary contained
herein, Buyer acknowledges that the elastomeric
coating on the parking deck and roof of the Property
is in need of replacement and that Buyer shall be
responsible, at its expense, for the replacement
and/or repair thereof and Seller shall have no
liability with respect thereto.
5.2.3 Notwithstanding anything to the contrary contained
herein, Buyer hereby agrees that in the event this
Agreement is terminated for any reason, then Buyer
shall promptly and at its sole expense return to
Seller all Due Diligence Items which have been
delivered by Seller to Buyer in connection with
Buyer's inspection of the Real Property.
6. Escrow.
6.1 Opening.
Purchase and sale of the Property shall be consummated through
an escrow ("Escrow") to be opened with Escrow Holder within
two (2) business days after the execution of this Agreement by
Seller and Buyer. This Agreement shall be considered as the
Escrow instructions between the parties, with such further
consistent instructions as Escrow Holder shall require in
order to clarify its duties and responsibilities. If Escrow
Holder shall require further Escrow instructions, Escrow
Holder may prepare such instructions on its usual form. Such
further instructions shall, so long as not inconsistent with
the terms of this Agreement, be promptly signed by Buyer and
Seller and returned to Escrow Holder within three (3) business
days of receipt thereof. In the event of any conflict between
the terms and
conditions of this Agreement and any further Escrow
instructions, the terms and conditions of this Agreement shall
control.
6.2 Close of Escrow.
Escrow shall close at a mutually agreeable date ("Close of
Escrow") within Fifteen (15) calendar days after the
expiration of the Due Diligence Period (as such period may be
extended pursuant to Paragraph 5.1 hereof).
6.3 Buyer Required to Deliver.
Buyer shall deliver to Escrow the following:
6.3.1 In accordance with Paragraph 2, the Deposit;
6.3.2 On or before Close of Escrow, the balance of the
Purchase Price; provided, however that Buyer shall
not be required to deposit the balance of the
Purchase Price into Escrow until Buyer has been
notified by Escrow Holder that (i) Seller has
delivered to Escrow each of the documents and
instruments to be delivered by Seller in connection
with Buyer's purchase of the Property, (ii) Title
Company has committed to issue and deliver the Title
Policy to Buyer, and (iii) the only impediment to
Close of Escrow is delivery of such amount by or on
behalf of Buyer;
6.3.3 On or before Close of Escrow, such other documents as
Escrow Holder may require from Buyer in order to
issue the Title Policy;
6.3.4 A counterpart original of an Assignment and
Assumption Agreement in the form attached hereto as
Exhibit C (the "Assignment Agreement"), duly executed
by Buyer assigning all of Seller's right, title and
interest in and to the Leases, Contracts and Permits
from and after the Close of Escrow.
6.3.5 Duly executed counterpart originals of each of the
Tenant Notification Letters (as hereinafter defined);
6.3.6 Evidence reasonably satisfactory to Title Company,
Escrow Holder and Seller that all necessary
authorizations of the transaction provided herein
have been obtained by Buyer, together with such other
customary documents and instruments as may be
reasonably requested by Escrow Holder or Title
Company or Seller in order to consummate
the transaction contemplated hereby and issue the
Owner's Policy; and
6.3.7 A Closing Statement signed or initialed by Buyer.
6.4. Seller Required to Deliver.
On or before Close of Escrow, Seller shall deliver to Escrow
or Buyer, as applicable, the following:
6.4.1. A duly executed and acknowledged Grant Deed or
Warranty Deed, conveying fee title to the Real
Property in favor of Buyer;
6.4.2. A completed Certificate of Non-Foreign Status, duly
executed by Seller under penalty of perjury;
6.4.3. An FTB Form 590 or other evidence that withholding of
any portion of the Purchase Price is not required by
the Revenue and Taxation Code of California or any
other applicable jurisdiction, duly executed by
Seller under penalty of perjury;]
6.4.4. A ▇▇▇▇ of Sale, in the form attached hereto as
Exhibit F, for the Personal Property, if any, in
favor of Buyer and duly executed by Seller;
6.4.5. Such other documents as Escrow Holder may require
from Seller in order to issue the Title Policy;
6.4.6. Tenant's estoppel certificates as required by and
provided for in Paragraph 4.2 and SNDA as required by
and provided for in Paragraph 9.1.7;
6.4.7. A counterpart original of the Assignment Agreement
duly executed by Seller, assigning all of Seller's
right, title and interest in and to the Leases,
Contracts and Permits to Buyer from and after the
Close of Escrow;
6.4.8. To Buyer, all keys to all buildings and other
improvements located on the Real Property,
combinations to any safes thereon, and security
devices therein in Seller's possession;
6.4.9. A letter from Seller substantially in the form of
Exhibit G attached hereto addressed to each Tenant
informing such Tenant of the change in ownership as
set forth ("Tenant Notification Letters");
6.4.10. To Buyer, the original Leases, to the extent the same
are in the possession of Seller; and
6.4.11. To Buyer, all records and files relating to the
management or operation of the Real Property,
including, without limitation, all insurance
policies, all service contracts, all tenant files
(including correspondence), property tax bills, and
all calculations used to prepare statements of rental
increases under the Leases and statements of common
area charges, insurance, property taxes and other
charges which are paid by Tenants of the Real
Property, but not including any records or files
which Seller is not permitted to disclose.
6.5. Buyer's Costs.
Buyer shall pay the following:
6.5.1 One-half (1/2) of Escrow Holder's fee, costs and
expenses;
6.5.2 All document recording charges;
6.5.3 All Title Policy Costs in excess of the Escrow
Holder's premium; and
6.5.4 All other costs customarily borne by purchasers of
real property in Los Angeles County, California.
6.6. Seller's Costs.
Seller shall pay the following:
6.6.1. One-half (1/2) of Escrow Holder's fees, costs and
expenses;
6.6.2. The cost of any transfer tax;
6.6.3. Escrow Holder premium for the Title Policy; and
6.6.4. All other costs customarily borne by sellers of real
property in Los Angeles County, California.
6.7. Prorations.
6.7.1. Real property taxes, personal property taxes,
assessments, rents, and CAM expenses shall be
prorated through Escrow between Buyer and Seller as
of Close of Escrow. All security deposits actually
received and presently held by Seller and not
applied by Seller in accordance with the Leases and
applicable law shall be paid over to Buyer. Any
delinquent rents attributable to periods prior to the
Close of Escrow and which are collected by Buyer or
Seller shall be retained by or paid to Seller;
provided, however, that any amounts collected by
Buyer or Seller shall be first applied to any rents
then due to Buyer and, if collected by Seller,
remitted to Buyer for such purpose. Seller shall have
the right to pursue any Tenant for delinquent rent,
but Seller shall not intentionally cause a Tenant to
become financially unstable or, without the consent
of Buyer (which consent may not be unreasonably
withheld, conditioned or delayed) seek eviction of
the Tenant by unlawful detainer or other means. Tax
and assessment prorations shall be based on the
latest available tax ▇▇▇▇. If after Close of Escrow
either party receives any further or supplemental tax
▇▇▇▇ relating to any period prior to Close of Escrow,
the recipient shall promptly deliver a copy of such
tax ▇▇▇▇ to the other party, and not later than ten
(10) days prior to the delinquency date shown on such
tax ▇▇▇▇ Buyer and Seller shall deliver to the taxing
authority their respective shares of such tax ▇▇▇▇,
prorated as of Close of Escrow. All prorations shall
be based on a 360-day year.
6.7.2. All leasing commissions and tenant improvement costs
owing with respect to Leases of the Real Property
entered into prior to execution of the Agreement
(including but not limited to commissions for lease
renewals and expansion options) shall be paid by
Seller, but only to the extent that any portion of
same are actually due and payable prior to the Close
of Escrow. All leasing commissions and tenant
improvement costs for new Leases executed after the
date of this Agreement shall be prorated between
Buyer and Seller in accordance with their respective
periods of ownership during the primary term of the
new Lease, subject, in all events, to the prior
approval of said Leases by Buyer as provided in
Paragraph 7.3.
6.7.3. Seller agrees to indemnify and hold Buyer harmless
from any and all liabilities, claims, demands, suits,
and judgments, of any kind or nature, including court
costs and reasonable attorney fees (except those
items which under the terms of this Agreement
specifically become the obligation of Buyer), brought
by third parties and based on events occurring on or
before the Close of Escrow and which are in any way
related to the Property.
6.7.4. Buyer agrees to indemnify and hold Seller Parties
harmless of and from any and all liabilities, claims,
demands, suits and
judgments, of any kind or nature, including court
costs and reasonable attorneys fees, brought by third
parties and based on events occurring subsequent to
the Close of Escrow and which are in any way related
to the Property.
The provisions of this Section 6.7 shall survive the Close of Escrow.
6.8. Determination of Dates of Performance.
Promptly after delivery to Buyer of the Title Documents,
Escrow Holder shall prepare and deliver to Buyer and Seller a
schedule which shall state each of the following dates:
6.8.1. The Effective Date pursuant to Paragraph 2.1.1;
6.8.2. The date of receipt of the Title Documents by Buyer;
6.8.3. The date by which title must be approved by Buyer
pursuant to Paragraph 3.2;
6.8.4. The Delivery Date pursuant to Paragraph 4.1;
6.8.5. The date by which the Inspections and Due Diligence
Items must be approved by Buyer pursuant to Paragraph
5.2;
6.8.6. The date by which the amounts described in Paragraph
2 must be deposited by Buyer, for which determination
Escrow Holder shall assume satisfaction of the
condition expressed in Paragraph 2 on the last date
stated for its satisfaction; and
6.8.7. The date of Close of Escrow pursuant to Paragraph
6.2.
If any events which determine any of the aforesaid dates occur
on a date other than the date specified or assumed for its
occurrence in this Agreement, Escrow Holder shall promptly
redetermine as appropriate each of the dates of performance in
the aforesaid schedule and notify Buyer and Seller of the
dates of performance, as redetermined.
7. Seller Representations, Warranties, and Covenants.
7.1 Representations and Warranties.
As used herein, "Seller's knowledge" shall mean and be limited
to the actual (and not imparted, implied or constructive)
current knowledge of ▇▇▇ ▇▇▇▇▇▇▇▇ without any duty of inquiry
or investigation except a duty of reasonable inquiry to the
individual who currently acts as the property manager of the
Real Property. Seller hereby represents and
warrants as of the date hereof and as of the Close of Escrow
by appropriate certificate to Buyer as follows:
7.1.1. Seller is a limited liability company duly formed and
validly existing under the law of the State of
California. Seller has full power and authority to
enter into this Agreement, to perform this Agreement
and to consummate the transactions contemplated
hereby. The execution, delivery and performance of
this Agreement and all documents contemplated hereby
by Seller have been duly and validly authorized by
all necessary action on the part of Seller and all
required consents and approvals have been duly
obtained and will not result in a breach of any of
the terms or provisions of, or constitute a default
under, any indenture, agreement or instrument to
which Seller is a party or otherwise bound. This
Agreement is a legal, valid and binding obligation of
Seller, enforceable against Seller in accordance with
its terms, subject to the effect of applicable
bankruptcy, insolvency, reorganization, arrangement,
moratorium or other similar laws affecting the rights
of creditors generally.
7.1.3. Seller is not a "foreign person" within the meaning
of Section 1445(f) of the Internal Revenue Code of
1986, as amended (the "Code").
7.1.5. To Seller's knowledge, except as set forth on any
schedule of litigation delivered pursuant to
Paragraph 4.1.9, there are no actions, suits or
proceedings pending, or threatened against Seller and
affecting any portion of the Real Property, at law or
in equity, or before or by any federal, state,
municipal, or other governmental court, department,
commission, board, bureau, agency, or
instrumentality, domestic or foreign.
7.1.6. To Seller's knowledge, Seller has not received any
notice of any violations of any ordinance,
regulation, law, or statute of any governmental
agency pertaining to the Real Property or any portion
thereof.
7.1.10. To Seller's knowledge, (a) the information in the
Rent Roll is true, correct, and complete, (b) Seller
has or will pursuant to Paragraph 4 and Paragraph 7.3
deliver to Buyer true, accurate and complete copies
of all of the Leases, (c) there are no leases,
subleases, licenses, occupancies or tenancies in
effect pertaining to any portion of the Real
Property, (d) no persons, tenants or entities occupy
space in the Real Property, except as stated in the
Rent Roll.
7.1.11. To Seller's knowledge, there are no presently pending
or contemplated proceedings to condemn the Real
Property or any part of it.
7.1.14. To Seller's knowledge, except for the Leases and the
Contracts, there are no agreements to which Seller is
a party or other obligations of Seller which may
affect the current use of the Real Property.
7.1.16. To Seller's knowledge, Seller has not received any
written notice of violation issued pursuant to any
environmental law with respect to the Real Property
or any use or condition thereof.
7.1.17. To Seller's knowledge, Seller has not released any
pollutant or hazardous substance of any kind onto or
under the Real Property that would result in the
violation of environmental requirements of state,
local or federal law including, but not limited to,
the Comprehensive Environmental Response Compensation
and Liability Act of 1880, U.S.C. 9601 et seq.
7.2. Indemnity; Survival.
The foregoing representations and warranties of Seller are
made by Seller as of the date hereof and again as of Close of
Escrow and shall survive the Close of Escrow for a period of
one year and shall not be merged as of the date of the Close
of Escrow hereunder.
7.2.1 Disclaimer of Representations and Warranties by
Seller. Notwithstanding anything contained herein to
the contrary, except with respect to the limited
representations and warranties of Seller set forth in
Paragraph 7.1 hereof or in the closing documents
delivered hereunder, it is understood and agreed that
Seller has not made, and is not now making, and that
Seller specifically disclaims, any representations,
warranties or guaranties of any kind or character,
express or implied, oral or written, past, present or
future, with respect to the Property, including, but
not limited to representations, warranties, or
guaranties as to:
(i) matters of title,
(ii) environmental matters relating to
the Property or any portion
thereof,
(iii) geological or seismic conditions,
including, without limitation,
subsidence,
earth movement, subsurface
conditions, water table,
underground water reservoirs,
limitations regarding the
withdrawal of water and earthquake
faults and the resulting damage of
past and/or future earthquakes,
(iv) whether, and to the extent to
which, the Property or any portion
thereof is affected by any stream
(surface or underground), body of
water, flood prone area, flood
plain, floodway or special flood
hazard,
(v) drainage,
(vi) soil conditions, including the
existence of instability, past soil
repairs, soil additions or
conditions of soil fill, or
susceptibility to landslides, or
the sufficiency of any
undershoring,
(vii) zoning to which the Property or any
portion thereof may be subject or
any changes thereto,
(viii) the availability of any utilities
to the Property or any portion
thereof including, without
limitation, water, sewage, gas and
electric,
(ix) usages of adjoining property,
(x) access to the Property or any
portion thereof,
(xi) the value, compliance with the
plans and specifications, size,
location, age, use, design,
quality, description, suitability,
structural integrity, operation,
title to, or physical or financial
condition of the Property or any
portion thereof,
(xii) any income, expenses, charges,
liens, encumbrances, rights or
claims on or affecting or
pertaining to the Property or any
part thereof,
(xiii) the presence of "Hazardous
Materials" (as defined below) or
toxic mold in or on, under or in
the vicinity of the Property,
(xiv) the condition or use of the
Property or compliance of the
Property with any or all past,
present or future federal, state or
local ordinances, rules,
regulations or laws, building, fire
or zoning ordinances, codes or
other similar laws (including, but
not limited to, Title III of the
Americans With Disabilities Act (42
U.S.C.A. Sections 12101 et seq.),
and federal, state or common
law-based actions and any private
right of action under state and
federal law to which its Property
is or may be subject, including,
but not limited to, CERCLA (42
U.S.C.A. Sections 9601 et seq.) and
RCRA (42 U.S.C.A. Sections 6901 et
seq.)),
(xv) the existence or non-existence of
any storage tanks,
(xvi) any other matter affecting the
stability or integrity of the
Property,
(xvii) the potential for further
development of the Property,
(xviii) the existence of vested land use,
zoning or building entitlements
affecting the Property,
(xix) the merchantability of the Property
or fitness of the Property for any
particular purpose (Buyer affirming
that Buyer has not relied on
Seller's skill or judgment to
select or furnish the Property for
any particular purpose, and that
Seller makes no representation or
warranty that the Property is fit
for any particular purpose),
(xx) tax consequences,
(xxi) the content or accuracy of any
report, study, opinion or
conclusion of any soils,
environmental or other engineer or
other
person or entity who has examined
the Property or any aspect thereof,
(xxii) the content or accuracy of any
information released to Buyer by an
engineer or planner in connection
with the development of the
Property, or the content or
accuracy of the documents and
materials and any other information
given to Buyer by Seller with
respect to the Property. The terms
and conditions of this Paragraph
7.2 shall expressly survive the
Closing without limitation.
7.2.2 Sale "AS IS". Except with respect to the limited
representations and warranties of Seller set forth in
Paragraph 7.1 hereof or in the closing documents
delivered hereunder:
(i) Buyer, in connection with its
entering into this Agreement, has
not relied upon and will not rely
upon, either directly or
indirectly, any covenant,
representation or warranty of
Seller, or any of its respective
agents and Buyer acknowledges that
no such covenant, representation or
warranty has been made;
(ii) Buyer represents and warrants that
it is a knowledgeable, experienced
and sophisticated buyer of real
estate and that it is relying
solely on its own expertise and
that of Buyer's consultants in
purchasing the Property;
(iii) Buyer is, or, as of the expiration
of the Due Diligence Period, will
be, familiar with the Property;
(iv) Buyer is relying solely upon, and
as of the expiration of the Due
Diligence Period will have
conducted, its own, independent
inspection, investigation and
analysis of the Property as it
deems necessary or appropriate in
so acquiring the Property from
Seller, including, without
limitation, an analysis of any and
all matters concerning the
condition of the Property and its
suitability for Buyer's intended
purposes, and a review of all
applicable laws, ordinances, rules
and governmental regulations
(including, but not limited to,
those relative to building, zoning
and land use) affecting the
development, use, occupancy or
enjoyment of the Property;
(v) Upon Closing, Buyer shall assume
the risk that adverse matters,
including, but not limited to,
adverse physical (including
geological) and environmental
conditions, may not have been
revealed by Buyer's inspections and
investigations;
(vi) Buyer acknowledges and agrees that
upon Closing, Seller shall sell and
convey to Buyer and Buyer shall
accept the Property in "AS IS,
WHERE IS, WITH ALL FAULTS"
condition;
(vii) Seller is not liable or bound in
any manner by any oral or written
statements, representations,
warranties, or information
pertaining to the Property
furnished by any real estate
broker, agent, employee, servant or
other person, unless the same are
specifically set forth or referred
to in this Agreement; and
(viii) Buyer acknowledges that the
Purchase Price reflects the "as is"
nature of this sale and any faults,
liabilities, defects or other
adverse matters that may be
associated with the Property. The
terms and conditions of Paragraph
7.2 shall expressly survive the
Closing without limitation. Buyer
has fully reviewed the disclaimers
and waivers set forth in this
Agreement with its counsel and
understands the significance and
effect thereof. Buyer acknowledges
and agrees that the disclaimers and
other agreements set forth in this
Agreement are an integral part of
this Agreement and that Seller
would not have agreed to sell the
Property to Buyer for the Purchase
Price without this disclaimer and
other agreements set forth in this
Agreement.
7.3. Covenants of Seller. Seller hereby covenants from and after
the Effective Date as follows:
7.3.1. To maintain any building constituting an improvement
on the Real Property in the same physical condition
as it was at the date of Buyer's inspection,
reasonable wear and tear excepted, and to perform all
normal maintenance from and after the Effective Date
in the same fashion as prior to the Effective Date.
7.3.2. To cause to be in force fire and extended coverage
insurance upon the Real Property, and public
liability insurance with respect to damage or injury
to persons or property occurring on the Real Property
in at least such amounts, and with the same
deductibles, as are maintained by Seller on the date
hereof.
7.3.3. To not enter into any new lease with respect to the
Real Property, without Buyer's prior written consent,
which shall not be unreasonably withheld. Exercise of
a mandatory renewal option shall not be considered a
new lease. Further, Seller will not modify or cancel
any existing Lease covering space in the Real
Property without first obtaining the written consent
of Buyer which shall not be unreasonably withheld.
Buyer shall have five (5) business days following
receipt of a request for any consent pursuant to this
paragraph in which to approve or disapprove of any
new Lease or any modification or cancellation of any
existing Lease. Failure to respond in writing within
said time period shall be deemed to be consent.
Seller's execution of a new lease or modification or
cancellation of an existing Lease following Buyer's
reasonable refusal to consent thereto shall
constitute a default hereunder.
7.3.4. To not sell, assign, or convey any right, title, or
interest whatsoever in or to the Real Property, or
create or permit to attach any lien, security
interest, easement, encumbrance, charge, or condition
affecting the Real Property (other than the Permitted
Exceptions).
7.3.5. To not, without Buyer's written approval, which shall
not be unreasonably withheld and shall be deemed
granted if not specifically denied in writing within
five (5) days of Seller's request for such approval
(a) amend or waive any right under any Contract, or
(b) enter into any service, operating or maintenance
agreement affecting the Real Property that would
survive the Close of Escrow.
7.3.6. To fully and timely comply with all obligations to be
performed by it under the Leases and Contracts, and
all Permits, licenses, approvals and laws,
regulations and orders applicable to the Real
Property.
8. Buyer Representations and Warranties.
Buyer hereby represents and warrants to Seller as of the date hereof
and as of the Close of Escrow by appropriate certificate that:
Buyer is a limited liability company duly organized and validly
existing under the laws of the Commonwealth of Virginia. Buyer has full
power and authority to enter into this Agreement, to perform this
Agreement and to consummate the transactions contemplated hereby. The
execution, delivery and performance of this Agreement and all documents
contemplated hereby by Buyer have been duly and validly authorized by
all necessary action on the part of Buyer and all required consents and
approvals have been duly obtained and will not result in a breach of
any of the terms or provisions of, or constitute a default under, any
indenture, agreement or instrument to which Buyer is a party or
otherwise bound. This Agreement is a legal, valid and binding
obligation of Buyer, enforceable against Buyer in accordance with its
terms, subject to the effect of applicable bankruptcy, insolvency,
reorganization, arrangement, moratorium or other similar laws affecting
the rights of creditors generally.
9. Conditions Precedent to Close of Escrow.
9.1. Conditions Precedent.
The obligations of Buyer to purchase the Property pursuant to
this Agreement shall, at the option of Buyer, be subject to
the following conditions precedent:
9.1.1. All of the representations, warranties and agreements
of Seller set forth in this Agreement shall be true
and correct in all material respects as of the date
hereof and as of the Close of Escrow, and Seller
shall not have on or prior to the Close of Escrow,
failed to meet, comply with or perform in any
material respect any covenants or agreements on
Seller's part as required by the terms of this
Agreement.
9.1.2. There shall be no material change in the matters
reflected in the Title Documents, and there shall not
exist any encumbrance or title defect affecting the
Real Property not described in the Title Documents
except for the Permitted Exceptions or matters to be
satisfied at the Close of Escrow.
9.1.3. Unless Seller receives notice from Buyer at least
thirty (30)
days prior to the Close of Escrow, effective as of
the Close of Escrow, any management agreement
affecting the Real Property shall be terminated by
Seller and any and all termination fees incurred as a
result thereof shall be the sole obligation of
Seller.
9.1.4. Seller shall have operated the Real Property from and
after the date hereof in substantially the same
manner as prior thereto.
9.1.7. Intentionally Deleted.
9.1.8. If any Tenant security deposit is in a form other
than cash, the instrument constituting the security
deposit must be reissued in Buyer's name (unless the
same is assigned to Buyer by contract or by operation
of law) as of the Close of Escrow or else a cash
escrow equal to the amount of the security deposit
(to the extent not applied by Seller in accordance
with the Lease and applicable law) will be
established at the Close of Escrow.
9.2. Effect of Failure.
If Buyer notifies Seller of a failure to satisfy the
conditions precedent set forth in this Paragraph 9, Seller
may, within five (5) days after receipt of Buyer's notice,
agree to satisfy the condition by written notice to Buyer, and
Buyer shall thereupon be obligated to close the transaction
provided (a) Seller so satisfies such condition and (b) no
such right to cure shall extend the Close of Escrow more than
sixty (60) days. If Seller fails to agree to cure or fails to
cure such condition by the Close of Escrow, this Agreement
shall be automatically terminated, the Deposit shall be
returned to Buyer without any further action required from
either party and neither party shall have any continuing
obligations hereunder.
10. Damage or Destruction Prior to Close of Escrow.
In the event that the Real Property should be damaged by any casualty
prior to Close of Escrow, then Seller shall promptly provide Buyer with
written notice of such casualty. If the cost of repairing such damage,
as estimated by an architect or contractor retained pursuant to the
mutual agreement of the parties (the "Cost of Repairs"), is (a) equal
to or less than Five Hundred Thousand Dollars ($500,000), the Close of
Escrow shall proceed as scheduled and any insurance proceeds shall be
paid over to Buyer; or (b) greater than Five Hundred Thousand Dollars
($500,000), then Buyer may in its discretion either (i) elect to
terminate this Agreement, in which case the Deposit shall be returned
to Buyer without any further action required from
either party and neither party shall have any further obligation to the
other or (ii) proceed to Close of Escrow in which event any insurance
proceeds, plus the cash amount of any associated deductible, shall be
paid over to Buyer. In the event that the casualty is uninsured, the
Buyer may terminate this Agreement unless the Buyer receives a credit
against the Purchase Price equal to the Cost of Repairs. Any notice
required to terminate this Agreement pursuant to this Paragraph shall
be delivered no later than thirty (30) days following Buyer's receipt
of Seller's notice of such casualty. The foregoing notwithstanding, in
the event any casualty results in the cancellation of any Major
Tenant's Lease, Buyer shall have the option to terminate this Agreement
without regard to the Cost of Repairs. Any notice required to terminate
this Agreement pursuant to this Paragraph shall be delivered in writing
no later than thirty (30) days following Buyer's receipt of Seller's
notice of such casualty.
11. Eminent Domain.
In the event that all or any portion of the Property is damaged or
destroyed by any casualty or is the subject of a taking or condemnation
under the provisions of eminent domain law after the Effective Date but
prior to the Closing Date, Seller shall have no obligation to repair or
replace any damage or destruction caused by the foregoing, but the
following shall apply at the Closing: Seller shall assign to Buyer all
claims and rights of Seller (including any and all claims and rights
that Seller may have as an additional insured with respect to any and
all insurance coverages obtained by Tenants pursuant to the terms of
the Leases) respecting any condemnation or casualty insurance coverage,
as applicable, and all condemnation proceeds or proceeds from any such
insurance received (or to be received) by Seller on account of any
condemnation or casualty, as applicable. Notwithstanding the foregoing,
in the event any portion of the Property is taken pursuant to eminent
domain proceedings, or the cost of repair of damage to the Property on
account of a casualty shall exceed One Million Dollars ($1,000,000) in
the aggregate, Buyer, at its option, may terminate this Agreement by
notice to Seller, given on or before the Closing Date. In the event of
any such termination, the obligations of the parties hereunder and
under the Escrow shall terminate, except for Buyer's indemnity
obligations under Paragraph 5.1 hereof. In the case of any such
termination, Buyer and Seller shall each pay 50% of any Escrow
cancellation fee and Seller shall pay any title cancellation fee.
12. Notices.
All notices, demands, or other communications of any type given by any
party hereunder, whether required by this Agreement or in any way
related to the transaction contracted for herein, shall be void and of
no effect unless given in accordance with the provisions of this
Paragraph. All notices shall be in writing and delivered to the person
to whom the notice is directed,
either (a) in person, (b) by United States Mail, as a registered or
certified item, return receipt requested, (c) by telecopy or (d) by a
nationally recognized overnight delivery courier. Notices delivered by
telecopy or overnight courier shall be deemed received on the business
day following transmission. Notices delivered by certified or
registered mail shall be deemed delivered three (3) days following
posting. Notices shall be given to the following addresses:
Seller: LaeRoc Partners, Inc.
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇
With Required Copy to: ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ Law Corporation
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇-▇▇▇.▇▇▇
Buyer: Triple Net Properties, LLC
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
With Required Copy to: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esquire
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
13. Remedies.
13.1 LIQUIDATED DAMAGES. IF THE CLOSING AND THE CONSUMMATION OF THE
TRANSACTIONS HEREIN CONTEMPLATED DOES NOT OCCUR AS HEREIN
PROVIDED SOLELY BY REASON OF A MATERIAL UNCURED DEFAULT BY
BUYER, BUYER AND SELLER AGREE THAT IT WOULD BE
IMPRACTICAL AND EXTREMELY DIFFICULT TO ESTIMATE THE DAMAGES
WHICH SELLER MAY SUFFER. THEREFORE, BUYER AND SELLER DO HEREBY
AGREE THAT A REASONABLE ESTIMATE OF THE TOTAL NET DETRIMENT
THAT SELLER WOULD SUFFER IN THE EVENT THAT BUYER MATERIALLY
BREACHES THIS AGREEMENT AND SUCH BREACH REMAINS UNCURED, AND
AS A RESULT THEREOF BUYER FAILS TO COMPLETE THE PURCHASE OF
THE PROPERTY, IS AND SHALL BE, AS SELLER'S SOLE AND EXCLUSIVE
REMEDY (WHETHER AT LAW OR IN EQUITY), AN AMOUNT EQUAL TO THE
DEPOSIT. THE DEPOSIT SHALL BE THE FULL, AGREED AND LIQUIDATED
DAMAGES FOR THE UNCURED MATERIAL BREACH OF THIS AGREEMENT BY
BUYER, ALL OTHER CLAIMS TO DAMAGES OR OTHER REMEDIES BEING
HEREIN EXPRESSLY WAIVED BY SELLER (EXCEPT FOR SELLER'S RIGHT
TO ENFORCE BUYER'S INDEMNIFICATION OBLIGATIONS UNDER PARAGRAPH
5.1 HEREOF). UPON SUCH A MATERIAL UNCURED BREACH AND FAILURE
TO CLOSE BY BUYER, THIS AGREEMENT SHALL BE TERMINATED AND
(EXCEPT FOR BUYER'S OBLIGATIONS UNDER PARAGRAPH 5.1 HEREOF) NO
PARTY HEREUNDER SHALL HAVE ANY FURTHER RIGHTS OR OBLIGATIONS
HEREUNDER, EACH TO THE OTHER, EXCEPT FOR THE RIGHT OF SELLER
TO COLLECT SUCH LIQUIDATED DAMAGES FROM BUYER AND ESCROW
HOLDER. THE PARTIES ACKNOWLEDGE THAT THE PAYMENT OF SUCH
LIQUIDATED DAMAGES IS NOT INTENDED AS A FORFEITURE OR PENALTY
WITHIN THE MEANING OF CALIFORNIA CIVIL CODE SECTIONS 3275 OR
3369, BUT IS INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO
SELLER PURSUANT TO CALIFORNIA CIVIL CODE SECTIONS 1671, 1676
AND 1677.
/s/ AWT
--------------------- ------------------------------
Buyer's Initials Seller's Initials
13.2 BUYER'S REMEDIES. IF THE CLOSING SHALL FAIL TO OCCUR BY REASON
OF A MATERIAL UNCURED DEFAULT OF SELLER'S OBLIGATIONS
HEREUNDER, BUYER SHALL BE ENTITLED, AS ITS SOLE REMEDY FOR
SUCH DEFAULT, (i) TO THE RETURN OF THE DEPOSIT AND TO ITS
REASONABLE AND ACTUAL OUT-OF-POCKET DUE DILIGNECE EXPENSES
INCURRED IN CONNECTION WITH THIS AGREEMENT, OR (ii) TO SEEK
SPECIFIC PERFORMANCE OF THIS AGREEMENT, IN WHICH CASE, BUYER
SHALL HAVE NO RIGHT TO RECEIVE ANY INCIDENTAL OR ANY OTHER
TYPE OF DAMAGES A COURT COULD AWARD IN A SPECIFIC PERFORMANCE
ACTION AND NO RIGHT TO AN ACCOUNTING. BUYER SHALL NOT BE
ENTITLED TO RECORD A LIS PENDENS AGAINST THE PROPERTY OTHER
THAN IN CONNECTION WITH SUCH SPECIFIC PERFORMANCE ACTION. IN
CONNECTION WITH ANY POST-TERMINATION REMEDY WHICH BUYER MAY
HAVE AGAINST SELLER UNDER SUBPART (i) HEREOF, SUCH REMEDY
SHALL NOT EXCEED $200,000 INCLUDING ATTORNEYS' FEES AND
DISBURSEMENTS AND OTHER COLLECTION COSTS. IN NO EVENT SHALL
SELLER BE LIABLE FOR ANY CONSEQUENTIAL OR PUNITIVE DAMAGES.
IF, FOLLOWING THE CLOSING, SELLER SHALL BE DEEMED TO HAVE
BREACHED ANY OBLIGATION, REPRESENTATION OR WARRANTY OF SELLER
HEREUNDER, THEN BUYER, AS ITS SOLE REMEDY, MAY FILE SUIT FOR
DAMAGES, BUT WAIVES THE RIGHT TO ANY DAMAGES IN EXCESS OF
$500,000.
/s/ AWT
--------------------- --------------------------------
Seller's Initials Buyer's Initials
13.3 In the event this Agreement is terminated due to the default
of Buyer hereunder, Buyer shall, in addition, deliver to
Seller, at no cost to Seller, the Due Diligence Items.
14. Assignment.
Buyer may assign any or all of its rights and obligations under this
Agreement to any one or more persons or entities upon notice to Seller;
provided however, that absent the express agreement of Seller, no such
assignment shall release Buyer from its liabilities hereunder.
15. Interpretation and Applicable Law.
This Agreement shall be construed and interpreted in accordance with
the laws of the State where the Real Property is located. Where
required for proper interpretation, words in the singular shall include
the plural; the masculine gender shall include the neuter and the
feminine, and vice versa. The terms "successors and assigns" shall
include the heirs, administrators, executors, successors, and assigns,
as applicable, of any party hereto.
16. Amendment.
This Agreement may not be modified or amended, except by an agreement
in writing signed by the parties. The parties may waive any of the
conditions contained herein or any of the obligations of the other
party hereunder, but any such waiver shall be effective only if in
writing and signed by the party waiving such conditions and
obligations.
17. Attorneys' Fees.
In the event it becomes necessary for either party to file a suit to
enforce this Agreement or any provisions contained herein, the
prevailing party shall be
entitled to recover, in addition to all other remedies or damages,
reasonable attorneys' fees and costs of court incurred in such suit.
18. Entire Agreement: Survival.
This Agreement (and the items to be furnished in accordance herewith)
constitutes the entire agreement between the parties pertaining to the
subject matter hereof and supersedes all prior and contemporaneous
agreements and understandings of the parties in connection therewith.
No representation, warranty, covenant, agreement, or condition not
expressed in this Agreement shall be binding upon the parties hereto
nor shall affect or be effective to interpret, change, or restrict the
provisions of this Agreement. The obligations of the parties hereunder
and all other provisions of this Agreement shall survive the Close of
Escrow or earlier termination of this Agreement, except as expressly
limited herein.
19. Counterparts.
This Agreement may be executed in any number of counterparts, all of
which when taken together shall constitute the entire agreement of the
parties.
20. Acceptance.
Time is of the essence of this Agreement. If the final date of any
period falls upon a Saturday, Sunday, or legal holiday under the
Federal law or laws of the State of California, then in such event the
expiration date of such period shall be extended to the next day which
is not a Saturday, Sunday, or legal holiday under Federal law or the
laws of the State of California.
21. Real Estate Commission.
Seller and Buyer each represent and warrant to the other that neither
Seller nor Buyer has contacted or entered into any agreement with any
real estate broker, agent, finder or any other party in connection with
this transaction, and that neither party has taken any action which
would result in any real estate broker's, finder's or other fees or
commissions being due and payable to any party with respect to the
transaction contemplated hereby, except that Seller has contracted with
Nick Brighton of Velocity Investment Sales as its broker and will pay a
commission of 1 % of the Purchase Price to said broker if, but only if,
the Close of Escrow occurs pursuant to this Agreement. Such commission
shall be payable upon the Close of Escrow from the proceeds of the
Purchase Price deposited by Buyer. Each party hereby indemnifies and
agrees to hold the other party harmless from any loss, liability,
damage, cost, or expense (including reasonable attorneys' fees)
resulting to the other party by reason of a breach of the
representation and warranty made by such party in this Paragraph.
22. Cooperation with S-X 3-14 Audit.
The Seller acknowledges that Buyer intends to assign all of its rights,
title and interest in and to this Agreement. The assignee may be a
publicly registered company ("Registered Company") promoted by the
Buyer. The Seller acknowledges that it has been advised that if the
purchaser is a Registered Company, the assignee is required to make
certain filings with the Securities and Exchange Commission (the "SEC
Filings") that related to the most recent pre-acquisition fiscal year
(the "Audited Year") for the Property. To assist the assignee in
preparing the SEC Filings, the Seller agrees to provide the assignee
with the following, to the extent available and provided that Buyer
shall be solely responsible for any and all of Seller's costs
associated with providing same:
Access to bank statements for the Audited year;
Rent Roll as of the end of the Audited Year;
Operating Statements for the Audited Year;
Access to the general ledger for the Audited Year;
Cash receipts schedule for each month in the Audited Year;
Access to invoice for expenses and capital improvements in the
Audited Year;
Copies of all insurance documentation for the Audited Year;
Copies of accounts receivable aging as of the end of the
Audited Year and an explanation for all accounts over 30 days
past due as of the end of the Audited Year, and
Signed representation letter at the end of the field work.
The provisions of this Paragraph 22 shall survive the Close of Escrow
for a period of one (1) year.
THE BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOR AGREEMENT FOR PURCHASE
AND SALE OF REAL PROPERTY AND ESCROW INSTRUCTIONS
"SELLER"
LAEROC ▇▇▇▇▇▇▇▇ 2000, LLC,
a California limited liability company
By: Laeroc Partners, Inc.
a California corporation
Its: Manager
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
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▇▇▇ ▇▇▇▇▇▇▇▇
Its: President
EXECUTED on this 13 day of February, 2004
"BUYER"
TRIPLE NET PROPERTIES, LLC,
a Virginia limited liability company
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Its: President
EXECUTED on this 12 day of February, 2004