HomeMy WebLinkAboutContract 58681-A1CSC No. 58681-Al
FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT
(500 WEST 3P-D STREET, FORT WORTH, TEXAS)
THIS FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT (this
"Amendment") is made and entered into as of May 1, 2023 (the "Effective Date"), by and between
the CITY OF FORT WORTH, TEXAS, a home -rule Municipal Corporation of the State of Texas
("Seller"), acting by and through its duly authorized Assistant City Manager, and DART
INTERESTS LLC, a Delaware limited liability company ("Purchaser").
RECITALS:
WHEREAS, Seller and Purchaser entered into that certain Purchase and Sale Agreement
dated effective as of January 4, 2023 (the "Agreement"), concerning certain property located at
500 West 3rd Street, Fort Worth, Texas 76102, as more particularly described therein; and
WHEREAS, Seller and Purchaser now desire to amend the Agreement and enter into the
agreements as more fully set forth hereinbelow.
AGREEMENTS:
NOW, THEREFORE, in consideration of the premises and the mutual agreements herein
set forth, and for other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Seller and Purchaser do hereby agree as follows:
Section 1. New Library. Seller has determined that it is no longer interested in leasing or
acquiring the New Library Space after Closing and hereby waives the New Library Option.
Accordingly, Section 1.5 of the Agreement, all references in the Agreement to the New Library
Option, the New Library Space, the New Library Option Term, the New Library Option
Agreement and the New Library Lease, and Schedule 1.5 of the Agreement, are hereby deleted in
their entirety.
Section 2. Ratification. Except as expressly amended hereby, the Agreement and all rights
and powers created thereby or thereunder are in all respects ratified and confirmed and remain in
full force and effect. Where any paragraph of the Agreement is modified or deleted by this
Amendment, any unaltered provision of such paragraph of the Agreement shall remain in full force
and effect. However, where any provision of this Amendment conflicts or is inconsistent with the
Agreement, the provision of this Amendment shall control.
Section 3. Definitions and References. Terms used herein, which are not otherwise defined
or modified herein but which are defined in the Agreement, shall have the meanings therein
ascribed to them. The term "Agreement" as used in the Agreement or any other instrument,
document or writing furnished to Seller by Purchaser shall mean the Agreement as hereby
amended.
Section 4. Miscellaneous. This Amendment (a) shall be binding upon and inure to the
benefit of Seller and Purchaser and their respective successors and assigns; (b) may be modified
or amended only by a writing signed by each party hereto; (c) shall be governed by and construed
OFFICIAL RECORD
CITY SECRETARY
AmericasActive:18385930.4 FT. WORTH, TX
in accordance with the laws of the State of Texas and the United States of America; (d) may be
executed in any number of counterparts, each of which shall constitute an original, but all of which
together shall constitute one and the same instrument; (e) delivery of an executed counterpart of
this Amendment by email in portable document format (PDF) shall be as effective as delivery of
a manually executed counterpart hereof; and (f) embodies the entire agreement and understanding
between the parties with respect to the subject matter hereof and supersedes all prior agreements,
consents and understandings relating to such subject matter. The headings herein shall be accorded
no significance in interpreting this Amendment.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, Seller and Purchaser have caused this Amendment to be
executed effective as of the date first written above.
SELLER:
CITY OF FORT WORTH, TEXAS
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By: Oana 8urghdolf( r28,20 12:29 CDT)
Dana Burghdoff, Assistant City Manager
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ATTEST:
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Jannette S. Goodall
City Secretary
APPROVED AS TO LEGALITY AND FORM:
Matthew A. Murray
Assistant City Attorney
M&C: 22-1056 (December 13, 2022)
Contract Compliance Manager:
By signing I acknowledge that I am the person responsible for the monitoring and administration
of this contract, including ensuring all performance and reporting requirements.
Ricky Salazar, Assistant Director
Property Management Department -- Real Estate Division
PURCHASER:
DART INTERESTS LLC,
a Delaware limited liability company
OFFICIAL RECORD
CITY SECRETARY
FT. WORTH, TX
CSC No. 58681
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (the "Agreement") is made and entered
into by and between the City of Fort Worth, Texas, a home -rule Municipal Corporation of the
State of Texas ("Seller"), acting by and through its duly authorized Assistant City Manager and
Dart Interests, LLC, a Delaware limited liability company ("Purchaser'), as of the date on which
this Agreement is executed by the last to sign of Seller and Purchaser ("Effective Date").
RECITALS:
WHEREAS Seller is the owner of Property (as defined herein) consisting of certain real
(immovable) property and improvements commonly known as "The Fort Worth Central Library"
consisting of a three-story building (the "Building") located at 500 West 3rd Street, Fort Worth,
Texas 76102 containing approximately 234,039 square feet of space on the Land (as defined
herein), together with certain related personal and intangible (movable) property;
WHEREAS, in accordance with section 253.014 of the Local Government Code, Seller
contracted with Jones Lang Lasalle Brokerage, Inc. ("Seller's Broker") to sell the Property; and
WHEREAS Broker listed the Property for sale for one -hundred and sixty (160) days with
a multiple -listing service and Seller published notice of its intention to sell the Property in the Fort
Worth Star -Telegram once a week for four consecutive weeks, after which Purchaser submitted
the highest cash offer for the Property; and
WHEREAS, effective as of July 25, 2022, Seller and Purchaser executed a Non -Binding
Letter of Intent, pursuant to which they expressed a mutual, non -binding intent for Seller to sell to
Purchaser and for Purchaser to acquire the Property from Seller upon certain business terms set
forth therein, including Purchaser's agreement to deliver an earnest money deposit equal to twenty
percent (20%) of the Purchase Price (as defined herein) to the Title Company (as defined herein)
within five (5) business days of the Effective Date of this Agreement;
WHEREAS Seller has agreed to lease the Property from Purchaser after Closing (as
defined herein) for a term not to exceed two (2) years; and
WHEREAS Purchaser intends to redevelop the Land (as defined herein) for the purpose
of constructing two large-scale, mixed -use, high-rise towers (collectively, the "Redeveloped
Building'); and
WHEREAS Purchaser has agreed to grant Seller an option (the "New Library Option") to
lease a portion of the space within the Redeveloped Building (the "New Library Space") for an
option period terminating one hundred and twenty (120) days after the Closing Date (the "New
Library Option Term"), for the purpose of operating a public library; and
WHEREAS Purchaser and Seller further agree to reasonably cooperate and use good faith
efforts to explore condominiumizing and selling the New Library Space to Seller for fair market
value upon the earlier of (i) ten (10) years after Purchaser's completion of the Redeveloped
Building, or (ii) the date that the Redeveloped Building has achieved occupancy of at least ninety
percent (90%) for no less than three (3) consecutive months; provided that any decision to establish
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a condominium regime for the New Library Space and sell the New Library Space to Seller for
fair market value shall be in Purchaser's sole and absolute discretion; and
WHEREAS, Seller and Purchaser wish to enter into this Agreement to provide for the sale
and purchase of the Property in accordance with the terms of this Agreement.
1. THE PROPERTY.
1.1 Description: Subject to the terms and conditions of this Agreement, and for the
consideration herein set forth, Seller agrees to sell and transfer, and Purchaser agrees to purchase
and acquire, the following (collectively, the "Pro e "):
1.1.1 Certain land, consisting of approximately 2.32 acres, located at 500 West
3rd Street, Fort Worth, Texas 76102, more specifically described on Schedule 1.1.1 attached hereto
(the "Land");
1.1.2 The Building and all other building(s), structures, access ways, landscaping
and other improvements, and fixtures (including, without limitation, all heating, ventilation, air
conditioning, electrical, plumbing, sewer, gas and other mechanical systems) now situated on the
Land (collectively, the "Improvements") (the Land and Improvements are hereinafter sometimes
referred to as the "Real Property");
1.1.3 All of Seller's right, title and interest in and to all rights -of -way or use,
licenses, tenements, easements, servitudes, hereditaments, and appurtenances belonging to or
inuring to the benefit of Seller and pertaining to the Land, if any, including, without limitation, any
right, title and interest of Seller in and to any real estate lying in the streets, highways, roads, alleys,
rights -of -way or sidewalks, open or proposed, in front of, around, above, over, under, through or
adjoining the Land (save and except the publicly dedicated rights -of -way, including roads,
sidewalks, and utilities, whether filed of record of not, commonly known as West 2nd Street, West
3rd Street, Burnett Street and Taylor Street) and in and to any strips or gores of real estate adjoining
the Land;
1.1.4 All of Seller's right, title and interest in and to all assignable service,
maintenance, supply, or other contracts or equipment leases entered into by Seller relating to the
operation of the Property in effect on the date of this Agreement (a list of which are identified on
the Schedule of Contracts attached hereto as Schedule LLD, and any new assignable contracts or
equipment leases entered into pursuant to Section 4.4 in effect as of Closing (being referred to
herein, collectively, as the "Contracts"), but excluding (i) any property management and leasing
brokerage agreements regarding the Land and/or Improvements (which shall be terminated
pursuant to Section 3.7 hereof), and (ii) any Contracts which Purchaser has not elected to assume;
1.1.5 Assignable warranties and guaranties issued in connection with the
Improvements which remain in effect as of Closing, to the extent the same may be lawfully
assigned by Seller without any cost or expense to Seller; all transferable consents, authorizations,
agreements, variances or waivers, licenses, permits, approvals, certificates of occupancy,
development rights or similar rights or entitlements from any governmental or quasi -governmental
agency, department, board, commission, bureau, or other entity or instrumentality in respect of the
Real Property or Improvements which remain valid or in effect as of Closing, to the extent the
same may be lawfully assigned by Seller without any cost or expense to Seller, unless Purchaser
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agrees to pay or reimburse Seller for any such cost or expense (all of the foregoing is hereinafter
sometimes referred to as the "Intangrible Property').
1.2 Excluded Property. The Property shall not include any of the furniture, furnishings,
machinery, apparatus, appliances, equipment and other tangible personal property owned by the
Seller currently used in the operation, repair, and maintenance of the Land and the Improvements
and situated thereon, including, without limitation, (i) tangible personal property related to the
operation of a public library, including books, artwork, maps, and catalogs, (ii) tangible personal
property and fixtures of the Improvements which are owned by third persons and utilities, (iii)
certain commemorative bricks located on the facade of the Building, and (iv) computers and
software (other than computer hardware and software used to run building mechanical systems
which shall be included as part of the Property) owned by Seller. Seller shall cause all of the
Excluded Property to be removed from the Property upon the later to occur of (i) the Closing Date
(as hereinafter defined) or (ii) the expiration or earlier termination of the Leaseback Agreement (as
hereinafter defined) and promptly repair any damage to the Property caused by such removal.
1.3 Agreement to Convey. Subject to the terms and conditions of this Agreement, on
the Closing Date, Seller agrees to convey, and Purchaser agrees to accept and purchase, all of the
following: (a) title to the Real Property by the Deed (as hereinafter defined), with warranty limited
as to Seller's own acts and deeds during the course of its ownership of the Real Property, free and
clear of all monetary liens or encumbrances, but subject, in all respects, to Permitted Matters (as
hereinafter defined); and (b) an assignment of the Surviving Contracts (defined below) and
Intangible Property by Assignment of Contracts and Intangible Property (as hereinafter defined)
without warranty other than that there have been no prior assignments thereof or any unresolved,
outstanding liens filed against any Intangible Property or with respect to the Surviving Contracts
that will survive the Closing.
1.4 Leaseback. If Closing occurs in accordance with this Agreement, Seller shall lease
the Property from Purchaser (the "Leaseback") pursuant to the terms of the lease agreement (the
"Leaseback Agreement") in the form attached hereto as Schedule 1.4, with all blanks completed
as appropriate. The Leaseback Agreement includes: (i) an initial one-year term at a triple net lease
(NNN) rate of Four Hundred Thousand and 00/100 Dollars ($400,000.00) per year; and (ii) an
option to allow the Seller to extend the term of the Leaseback Agreement for an additional one-
year term at a triple net lease (NNN) rate of Eight Hundred Ten Thousand and 00/100 Dollars
($810,000.00) per year. Seller shall have a one-time option (the "Termination Option") to
terminate the Leaseback as to the entire term or a portion of the term, upon written notice to
Purchaser given at Closing or at any time during the term of the Leaseback Agreement (the
"Termination Notice"), so long as no Event of Default (as defined in the Leaseback Agreement)
exists on either the date Seller sends the Termination Notice or, in the case of a termination as to a
portion of the term, the Termination Date (as defined below). The Termination Notice shall specify
whether Seller intends to terminate the Leaseback as to the entire term or a portion of the term,
and if Seller elects to terminate the Leaseback as to a portion of the term, the Termination Notice
shall specify the termination date (the "Termination Date"). If Seller exercises the Termination
Option, Seller shall be obligated to pay to Purchaser in immediately available funds, a lease
termination fee (the "Termination Fee") in an amount equal to the sum of (a) the Basic Rent, (b)
the Impositions, and (c) Landlord's Insurance Costs that would have otherwise been payable under
the terms of the Leaseback Agreement either for the entire term or from and after the Termination
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Date, as applicable. The Termination Fee shall be due and payable contemporaneously with
Seller's delivery of the Termination Notice. If Seller fails to pay any part of the Termination Fee
as and when due and payable, then the Termination Option shall be void and of no further force or
effect (in which case Seller shall no longer have the right or option to exercise the Termination
Option), in which case the Leaseback shall continue as if Seller did not exercise the Termination
Option.
1.5 New Library Option. If Closing occurs in accordance with this Agreement,
Purchaser shall grant to Seller an option (the "New Library Option") to lease a portion of the space
within the Redeveloped Building (the "New Library Space") for an option period terminating one
hundred and twenty (120) days after the Closing Date (the "New Library Option Term") and
Purchaser and Seller shall execute an option agreement in the form attached hereto as Schedule
L5 (the "New Library Option Agreement"). Seller's exercise of its New Library Option shall be
evidenced by written notice to Purchaser before the expiration of the New Library Option Term.
If Seller elects to exercise such option, Seller shall notify Purchaser in writing during the new
Library Option Term. Time is of the essence in the exercise of the New Library Option, and, if
Seller fails to timely exercise the New Library Option, the New Library Option shall be void and
of no further force or effect (in which case Seller shall not thereafter have the right to lease the
New Library Space from Purchaser). The lease agreement for the New Library Space (the "Flew
Library Lease") will be in a form reasonably agreeable to Seller and Purchaser and would include
the following terms and conditions: (i) a New Library Space ranging from 40,000 to 60,000
rentable square feet of space; (ii) an initial term of twenty (20) years with the amount of rent due
equal to the greater of (1) fair market rental rates, or (2) a seven percent (71/6) yield on the allocated
build -out costs for the New Library Space, net of operating costs and common area maintenance
expenses (to be further defined in the New Library Lease); (iii) build -out specifications as
reasonably agreeable to Seller and Purchaser; (iv) a limitation of the use of the New Library Space
for public purposes, including the operation of a public library; and (v) other terms and conditions
as may be agreed upon by Seller and Purchaser. If Seller timely elects to enter into the New Library
Lease, Seller and Purchaser shall enter into the New Library Lease within a commercially
reasonable time after Seller completes the final design of the Redeveloped Building. Purchaser's
grant to Seller of the New Library Option and its willingness to enter into the New Library Lease
shall be contingent upon Purchaser's completion of the Redeveloped Building. Seller and
Purchaser further agree to reasonably cooperate and use good faith efforts to adjust the terms of
the New Library Lease based upon available tax incentives or other variables. Seller and Purchaser
will explore establishing a condominium regime for the New Library Space and selling the New
Library Space to Seller for fair market value upon the earlier of (i) ten (10) years after Purchaser's
completion of the Redeveloped Building, or (ii) the date that the Redeveloped Building has
achieved occupancy of at least ninety percent (90%) for no less than three (3) consecutive months;
provided that any decision to establish a condominium regime for the New Library Space and sell
the New Library Space to Seller for fair market value shall be in Purchaser's sole and absolute
discretion.
2. PURCHASE PRICE AND DEPOSIT.
2.1 PURCHASE PRICE. The purchase price ("Purchase Price") to be paid by
Purchaser to Seller for the Property is equal to Eighteen Million and 00/100 Dollars
($18,000,000.00). The Purchase Price, as increased or decreased by proration and adjustments as
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provided herein, shall be payable by Purchaser, in full, at Closing in cash by wire transfer of
immediately available federal funds to a bank account or accounts designated by Seller in writing
to Purchaser prior to the Closing.
2.2 DEPOSIT. Within five (5) business days of the Effective Date, Purchaser shall
deliver a deposit of earnest money in the amount of Three Million, Six Hundred Thousand and
00/100 Dollars ($3,600,000.00) (the "Deposit") to Rattikin Title Company, 201 Main Street, Suite
800, Fort Worth, TX 76103 Attention: Mac Miles, mmiles@rattikintitle.com ("Title Company'),
as agent for Chicago National Title Insurance Company ("Underwriter') to be held in escrow by
the Title Company in accordance with terms of this Agreement (the "Escrow'). The Title Company
shall retain possession of the Deposit in trust in the name of Purchaser until delivery or return
thereof is permitted or required under this Agreement. The Deposit shall be deposited in an interest -
bearing account with the interest thereon to be earned by Purchaser and disbursed in accordance
with the provisions hereof. The interest earned on the Deposit shall not be considered a part of
Deposit and shall be paid to Purchaser as it directs. If the purchase and sale transaction
contemplated herein closes pursuant to this Agreement, the Deposit (and all interest earned
thereon) shall be credited against the Purchase Price (as defined above) at Closing (as defined
below).
2.3 If Closing occurs in accordance with this Agreement, the Deposit shall be applied
as a credit against the Purchase Price. If any dispute arises under this Agreement with respect to
the disposition of any of the Deposit or the entitlement of any party to the Deposit or the obligations
of Title Company with respect thereto, Title Company shall not be required to determine the
resolution of any such dispute and shall not be obligated to make any delivery of the Deposit; but
in such event, Title Company shall bring an appropriate action or proceeding for leave to deposit
said monies in the registry of a court of competent jurisdiction pending resolution of such dispute.
The Title Company shall not be responsible hereunder for any acts or omissions unless willfully
done or done in a grossly negligent manner, and Seller and Purchaser hereby jointly agree to hold
Title Company harmless from and against any and all loss, costs or damages to any third party
arising out of the performance of the Title Company's obligations under this Agreement or in
connection herewith to any third party (except such loss, costs or damages as shall result from the
gross negligence or misconduct of Title Company and only to the extent permitted by Texas law
and without waiving the Seller's sovereign immunity).
2.4 Title Company shall hold and dispose of the Deposit in accordance with the terms
of this Agreement. Seller and Purchaser agree that the duties of the Title Company hereunder are
purely ministerial in nature and shall be expressly limited to the safekeeping and disposition of the
Deposit in accordance with this Agreement. Title Company shall incur no liability in connection
with the safekeeping or disposition of the Deposit for any reason other than Title Company's
willful misconduct or gross negligence. In the event that Title Company shall be in doubt as to its
duties or obligations with regard to the Deposit, or in the event that Title Company receives
conflicting instructions from Purchaser and Seller with respect to Deposit, Title Company shall
not be required to disburse the Deposit and may, at its option, continue to hold the Deposit until
both Purchaser and Seller agree as to its disposition, or until a fmal judgment is entered by a court
of competent jurisdiction directing its disposition.
2.5 Independent Contract Consideration. Contemporaneously with the execution of this
Agreement, Purchaser delivers to Seller a check in the amount of $100.00 ("Independent Contract
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Consideration") as independent consideration for Seller's execution, delivery and performance of
this Agreement. This Independent Contract Consideration is in addition to and independent of any
other consideration or payment provided for in this Agreement, is non-refundable, and shall be
retained by Seller notwithstanding any other provision of this Agreement; however, upon Closing,
the Independent Contract Consideration shall be applied as a credit toward the Purchase Price.
INSPECTIONS, APPROVALS AND OTHER AGREEMENTS.
3.1 Inspections. Unless otherwise extended as provided herein or by mutual agreement
of the parties, Purchaser shall have until 5:00 pm (C.T.) on the date that is ninety (90) days after
the Effective Date (the "Due Diligence Period") to conduct the inspections and studies described
in this Section 3.
3.2 Access to the Property and Indemnification by Purchaser. Upon the execution of
this Agreement, Seller grants to Purchaser and Purchaser's employees, officers, partners, agents,
attorneys, accountants, engineers, contractors and environmental consultants, current and
prospective architects, lenders, insurers, investors and consultants ("Purchaser's Representatives")
access to the Real Property for the purpose of conducting such physical and environmental
inspections and to assist Purchaser in evaluating the Real Property (collectively, the "Inspections")
as Purchaser shall deem necessary to determine the feasibility of the Real Property for Purchaser's
intended use.
3.2.1 Before Purchaser's Representatives enter the Land and Improvements to
perform Inspections, Purchaser shall give Seller reasonable advance written notice (which shall
not be less than twenty-four (24) hours prior to the date of such Inspections) and Seller shall have
the opportunity to have a representative of Seller present during all such Inspections. All
Inspections shall be coordinated through Seller's Designated Employee (described below). Such
Inspections will include the right to meet with and conduct interviews with the on -site property
manager, which such interviews may be in person, by phone or by virtual conference, provided
that (i) Purchaser gives Seller two (2) business days' prior written notice of its intention to do so
(which notice shall be sent via electronic mail to Marilyn.Marvinng,fortworthtexas.gov and
Aaron. Cutaiargfortworthtexas.gov) and (ii) Seller shall have the right to have a representative
present during any such meetings or interviews (other than with regard to such Inspections that
would be available to the general public). Purchaser covenants that it shall use its commercially
reasonable efforts to minimize interference with Seller's use and occupancy of the Building during
any such meetings or during any Inspections. Purchaser covenants that Purchaser will not conduct
any physically invasive testing or any testing involving sampling of, on, or under the Land or
Improvements without first obtaining Seller's written consent, which may be withheld in Seller's
reasonable discretion; and, Purchaser shall provide Seller with a reasonably detailed testing plan
outlining the tests Purchaser intends to perform.
3.2.2 Upon Purchaser's completion of Purchaser's Inspections, Purchaser shall,
at its own expense, promptly fill and compact any holes, and otherwise restore any damage to the
Property related to the Purchaser Inspections and return the Land and Improvements to
substantially the same condition and cleanliness existing before entry on the Real Property by
Purchaser's Representatives. Neither Purchaser nor any Purchaser Representative shall damage
any part of the Property or any personal property owned or held by any tenant or third party.
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3.2.3 Neither Purchaser nor any of Purchaser's Representatives shall contact any
governmental official or representative regarding the Property without first providing Seller with
(i) two (2) business days' prior written notice of the intended contact (which notice shall be allowed
to be sent via electronic mail to the following addresses for approval by Seller:
Ricardo. Salazar(cr�,fortworthtexas.gov) and (ii) if approved by Seller, a reasonable opportunity to
participate in any applicable discussions or meetings with such governmental officials or
representatives. If Seller does not approve Purchaser's request to contact any governmental
official or representative regarding the Property, Purchaser may waive its request to contact such
official or representative and proceed to Closing, or terminate this Agreement in which case the
Deposit shall be promptly returned to Purchaser and the parties shall have no further rights or
obligations hereunder.
3.2.4 Purchaser agrees to promptly pay when due all costs and fees associated
with Purchaser's Inspections and not to cause, permit or suffer or conduct any Purchaser
Inspections that give rise to any lien or encumbrance to be asserted against the Property. If any
such lien shall at any time be filed, Purchaser shall, at its sole expense, cause the same to be
discharged and it shall be discharged of record within ten (10) days after knowledge by Purchaser
thereof by satisfying the same.
3.2.5 All Purchaser Inspections shall be conducted during the normal business
hours of the Property, unless Seller otherwise approves in writing. Purchaser shall deliver to
Seller's designated representatives, Aaron Cutaiar, Facilities Superintendent — Property
Management Department, and Marilyn Marvin, Assistant Director — Library, a written request
(which may be by e-mail) for approval to enter the Property at least twenty-four (24) hours prior
to the intended date of entry (other than with regard to such inspections that would be available to
the general public).
3.2.6 Neither Purchaser nor any Purchaser Representatives shall conduct any on -
site Purchaser Inspections or testing of the Property until after receiving approval from Seller's
designated representative to the extent that such approval is required hereunder in accordance
with the procedure above. Seller's failure to respond to any request for approval or notice of
inspection within the required notice period shall not be deemed approval. Purchaser and each of
Purchaser's Representatives conducting any Inspections shall maintain workers' compensation
insurance in accordance with applicable law, and Purchaser, or any of Purchaser's Representatives
conducting any Inspections, shall maintain (a) commercial general liability insurance with limits
of at least Two Million Dollars ($2,000,000) for bodily or personal injury or death, (b) property
damage insurance in the amount of at least One Million Dollars ($1,000,000), per occurrence, and
(c) contractual liability insurance.
3.2.7 PURCHASER AGREES TO INDEMNIFY, DEFEND, AND HOLD
HARMLESS SELLER AND ITS OFFICERS, AGENTS AND EMPLOYEES FROM AND
AGAINST ANY AND ALL THIRD PARTY CLAIMS, DEMANDS, CAUSES OF ACTION,
LOSS, DAMAGE, LIABILITIES, COSTS AND EXPENSES (INCLUDING
REASONABLE ATTORNEY'S FEES AND COURT COSTS) OFANY AND EVERY KIND
OR CHARACTER, KNOWN OR UNKNOWN, FIXED OR CONTINGENT, FOR
PERSONAL INJURY (INCLUDING DEATH), PROPERTY DAMAGE OR OTHER
HARM FOR WHICH RECOVERY OF DAMAGES IS SOUGHT OR SUFFERED BY ANY
PERSON OR PERSONS, INCLUDING CLAIMS BASED ON STRICT LIABILITY,
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ARISING OUT OF OR IN CONNECTION WITH INSPECTIONS AND ENTRANCE
UPON THE LAND AND IMPROVEMENTS BY PURCHASER OR PURCHASER'S
REPRESENTATIVES, UNLESS CAUSED BY THE GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT OF SELLER; PROVIDED, HOWEVER, IN NO EVENT
SHALL PURCHASER BE LIABLE FOR THE DISCOVERY OF ANY PRE-EXISTING
CONDITION OF THE LAND OR IMPROVEMENTS. THE PROVISIONS OF THIS
SECTION 3.2.7 SHALL SURVIVE THE TERMINATION OF THIS AGREEMENT.
3.3 Inspection of Documents. Within five (5) days after the Effective Date, Seller shall
make available to Purchaser or its representative, for inspection the Property information materials
relating to the Land and Improvements set forth on Schedule 3.3 attached hereto ("Propea
Documents"), to the extent such Property Documents are within Seller's possession or control. As
part of the Property Documents, Seller shall deliver the most recent owner's policy of title
insurance in its possession to the Purchaser (the "ExistingPolicy"), the most recent survey of the
Land and Improvements ("Existing Surve ") and the most recent Phase I and/or Phase II (if
applicable) environmental site assessment of the Land and Improvements (the "Existing ESA").
3.3.1 Purchaser agrees that this Agreement along with the Property Documents
and other information gathered in connection with this Agreement, discovered on the Property,
disclosed by Purchaser's Inspections, or furnished or disclosed to Purchaser by Seller or its
representatives that is not generally known to the public (the "Confidential Information") shall be
considered Confidential Information. Purchaser shall keep all such information confidential in
accordance with this section, and agrees that all such Confidential Information shall be used by
Purchaser and Purchaser's Representatives solely for the purpose of Purchaser's evaluation of the
Property and to assist Purchaser in evaluating the Real Property as Purchaser shall deem necessary
to determine the feasibility of the Real Property for Purchaser's intended use. Without the prior
written consent of Seller, which shall be given or withheld in Seller's sole discretion, or as
permitted herein, neither Purchaser nor any Purchaser Representatives shall reveal, disclose,
disseminate, publish or communicate any Confidential Information to any persons, parties or
entities other than to Purchaser's partners, employees, consultants, attorneys, engineers, licensees,
prospective investors, and lenders who are responsible for determining the feasibility of
Purchaser's acquisition and development of the Property and who have been informed of the
confidential nature of such information as required hereby (collectively, "Permitted Outside
Parties"). Purchaser shall ensure that all Permitted Outside Parties (and any other person for whom
Purchaser has responsibility hereunder) comply with the provisions of this Section 3.3. Purchaser
shall not divulge the contents of the Property Documents or other Confidential Information except
in connection with a court order or other legal process, including under the Texas Public
Information Act, and shall otherwise act in strict accordance with the confidentiality standards set
forth in this Section 3.3. In permitting Purchaser and Permitted Outside Parties to review Property
Documents or any other Confidential Information, Seller has not waived and does not waive any
privilege or claim of confidentiality with respect thereto, and no third -party benefits or
relationships of any kind, either express or implied, have been offered, intended or created.
3.3.2 The provisions of this Section 3.3 shall survive the termination of this
Agreement. Other than research of public records and databases (i.e., requests for a zoning
confirmation letter, requests for information related to property taxes, municipal lien search, open
permit search, and any similar requests or reports), neither Purchaser nor any Purchaser
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Representative shall communicate with any governmental or regulatory agencies or their
individual employees concerning the Property, without the prior written consent of Seller, subject
to the provisions of Section 3.2.3. Purchaser shall also promptly notify Seller in writing of requests
for confidential information from any third party or regulatory agency. "Confidential Information"
shall not include any information that: (a) is or becomes generally available to the public other
than as a result of Purchaser's or Permitted Outside Parties' material breach of this Agreement; (b)
is obtained by Purchaser or Permitted Outside Parties' on a non -confidential basis from a third
party that, to Purchaser's knowledge, was not legally or contractually restricted from disclosing
such information; (c) was in Purchaser's or Permitted Outside Parties' possession prior to Seller's
disclosure hereunder; or (d) was or is independently developed by Purchaser or Permitted Outside
Parties without relying on any Confidential Information. If this Agreement terminates prior to
Closing, Purchaser shall return originals and any copies of any Property Documents and any other
information delivered by Seller to Purchaser or any Purchaser Representatives to Seller, or at the
direction of Seller destroy and direct its Purchaser's Representatives to destroy any such Property
Documents and other information.
3.3.3 If Purchaser elects to terminate this Agreement prior to the expiration of the
Due Diligence Period, or if after such date, Purchaser fails to close on the sale and purchase of the
Property for any reason other than a default by Seller, upon request by Seller, and if requested to
do so by Seller in writing, Purchaser will promptly deliver, without representation, warranty or
liability, to Seller copies of any and all reports, studies, environmental audits, environmental
assessments, or other documents or information prepared by non-affiliated third -parties for
Purchaser with respect to the Property, to the extent that Seller reimburses Purchaser for
Purchaser's costs incurred in connection therewith.
3.4 Title and Environmental Diligence. Within ten (10) days after the Effective Date,
Seller shall have obtained and provided to Purchaser a current TLTA title insurance commitment
(the "Commitment") prepared by the Title Company and underwritten by the Underwriter,
proposing to insure good and indefeasible fee simple title to the Property in the name of Purchaser
and in the amount of the Purchase Price. Within forty-five (45) days of the Effective Date,
Purchaser, at its option, shall have ordered (i) an ALTA survey of the Property prepared by a
surveyor (the "Surveyo ") satisfactory to the Purchaser (the "Survey) or a recertification of the
Existing Survey and (ii) a Phase I Environmental Site Assessment of the Property (the
"Assessment") or an update of the Seller's Existing ESA. Within five (5) days following the later
to occur of (i) Purchaser's receipt of the Commitment and electronic copies of all documents
referenced on Schedule B of the Commitment, (ii) Purchaser's receipt of the Survey, if ordered,
and (iii) Purchaser's receipt of the Assessment, if ordered, Purchaser shall give Seller a written
statement (an "Objection Notice") of any matters disclosed by the Commitment, Survey or
Assessment, as applicable, to which Purchaser objects (any such matters are "Obiection(s)"). Any
such matters reflected on the Commitment, Survey or Assessment to which the Purchaser does not
object shall be deemed to be "Permitted Matters" (further defined below). Seller shall have ten
(10) days following receipt of an Objection Notice by Purchaser, to notify Purchaser whether Seller
will undertake efforts to satisfy, remove or cure any of the objections ("Seller's Objection
Response"). If Seller fails to send Seller's Objection Response, then Seller will be deemed to have
elected not to undertake any efforts to satisfy the Objections. Seller shall have until the close of
business on the business day immediately preceding the Closing Date to cure or satisfy any such
Objection(s) it has agreed to cure (such period and any extensions of the same is the "Curative
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Period') to the reasonable satisfaction of the Purchaser and the Title Company, in the case of
Objections with respect to the Commitment or the Survey, and to the reasonable satisfaction of the
Purchaser and its environmental consultant in the case of Objections to the Assessment. If Seller
notifies Purchaser in Seller's Objection Response that Seller is unable or unwilling to satisfy any
Objection(s) or if Seller is unable or unwilling to satisfy any Objection(s) within the Curative
Period, at Purchaser's option the Purchaser may either: (i) terminate this Agreement and receive a
return of the Deposit as provided herein or (ii) waive the uncured Objection(s) and proceed to the
Closing, in which case, the Purchaser shall acquire the Property subject to any uncured or
unsatisfied Objection(s), and any such Objections shall become Permitted Matters. If the Purchaser
does not order the Survey or Assessment, as applicable, or if the Purchaser does not notify the
Seller of any Objections to matters shown on the Commitment, Survey or Assessment on or before
the last day of the Due Diligence Period, then any matters that might have been reflected on the
Survey or Assessment had the same been obtained, or any matter that was disclosed thereon that
the Purchaser did not identify as Objection(s), as applicable, shall be deemed to be waived and
shall become Permitted Matters. If, after the Due Diligence Period, but before Closing, any new
exceptions to title are identified by the Title Company or the Surveyor to which Purchaser has an
objection (which were not disclosed by the latest update of the Commitment or the Survey received
by Purchaser prior to the expiration of the Due Diligence Period and which were not otherwise
specifically included in the definition of the Permitted Matters in Section 3.5 below) (a New
Matter"), and if Seller is unable or unwilling to cause the Title Company to reissue a Commitment
or the Surveyor to reissue the Survey, as applicable, deleting such New Matter, or otherwise, to
remove or cure such exceptions to Purchaser's reasonable satisfaction prior to the Closing Date
Purchaser shall have the right to terminate this Agreement and receive a return of the Deposit as
provided herein.
3.5 Permitted Matters. In addition to Permitted Matters referenced in Section 3.4,
above, Purchaser shall accept title to the Real Property on the Closing Date, subject to the
following exceptions (all of which shall also be "Permitted Matters"):
3.5.1 The lien of non -delinquent taxes and assessments assessed against the
Property; and
3.5.2 All building and zoning laws, codes and regulations, special exceptions,
conditions, site plan approvals, and other similar matters, if any, relating to the zoning of the same.
3.6 Purchaser's Acceptance or Rejection Prior to the Expiration of the Due Diligence
Period. On or before the expiration of the Due Diligence Period, if Purchaser, after conducting its
Inspections, as described in this Section 3, for any reason or for no reason, desires not to purchase
the Property, Purchaser will give Seller and the Title Company written notice of its termination of
this Agreement. If the Due Diligence Period expires without a notice of termination being timely
received by Seller, then Purchaser will be deemed to have approved and accepted the Property and
to have agreed to complete the transaction contemplated by this Agreement, subject only to the
provisions of Section 9 and Sections 10.1, 10.3 and 10.4 hereof. If Purchaser gives Seller a notice
of termination on or before the expiration of the Due Diligence Period then this Agreement will
automatically terminate, the Deposit shall be promptly returned to the Purchaser, and thereupon
Purchaser will return or destroy all copies of the Property Documents (and any other information
delivered by Seller to Purchaser) at Seller's instruction and neither party will have any further
obligation or liability to the other party hereunder, except as otherwise expressly provided herein.
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Except as otherwise provided herein, if Purchaser gives Seller a notice of termination after the
expiration of the Due Diligence Period, such notice shall be considered a Purchaser Default, Seller
shall retain an amount equal to ten percent (10%) of the Deposit in accordance with Section 10.2
and the balance of the Deposit shall be promptly returned to the Purchaser.
3.7 Contracts. Seller shall, at or prior to the Closing, terminate all Contracts to which
it is a party, except those Contracts designated by Purchaser, in writing, prior to the expiration of
the Due Diligence Period, which Purchaser elects to assume (the "Surviving Contracts"). If
Purchaser fails to timely provide notice specifying those of the Contracts that are Surviving
Contracts, Purchaser shall be deemed to have elected to assume all Contracts, and the same shall
be Surviving Contracts. Effective as of the Closing Date, Purchaser will assume all of Seller's
liabilities and obligations with respect to any Surviving Contracts first arising or accruing on or
after the Closing Date. Notwithstanding anything herein to the contrary, in no event shall any
brokerage agreements or any property management agreements regarding the Land and/or
Improvements be considered Surviving Contracts or be assumed by Purchaser, and the same shall
be terminated at Seller's sole cost and expense, effective as of Closing.
3.7.1 Consents to Transfer. During the Due Diligence Period, Seller shall use
reasonable efforts to secure an agreement from any third parties to any of the Surviving Contracts
who have the right to consent to the transfer of any Surviving Contract consenting to the
assignment of such Surviving Contract to the Purchaser on the Closing Date. Any such agreements
may provide that if the transaction contemplated by this Agreement is not consummated, the
consent granted therein will not be effective. It is understood that a failure to obtain such consents
is not a condition precedent to Purchaser's obligation to close. If Seller is unable to obtain any
such third -party consent during the Due Diligence Period Purchaser may (i) elect to terminate this
Agreement, and Purchaser shall receive a return of the Deposit or (ii) continue this Agreement in
full force and effect. If Purchaser continues this Agreement and closes the acquisition of the
Property pursuant to this Section 3.7.1, Purchaser will assume all liability which arises as a result
of failing to obtain any such consent.
4. SELLER'S OBLIGATIONS PRIOR TO CLOSING. Until Closing, Seller
and/or Seller's agents or representatives shall:
4.1 Insurance. Keep the Real Property insured, in such amounts currently in force with
respect to casualty, liability, hazard insurance, and other insurance, if any. Purchaser acknowledges
that Seller is a governmental entity under the laws of the state of Texas and pursuant to Chapter
2259 of the Texas Government Code, entitled "Self -Insurance by Governmental Units," is self -
insured and therefore is not required to purchase insurance. Purchaser agrees that Seller shall be
allowed to retain. (self -insure) in whole or in part any insurance obligations required herein.
4.2 Operation. Maintain the Real Property in substantially the same physical condition
as it exists as of the Effective Date, continue to operate and manage the Property in the ordinary
course of Seller's business and substantially in accordance with Seller's present practice and
deliver the Property to Purchaser at Closing (subject to the Leaseback Agreement) in substantially
the condition existing as of the last day of the Due Diligence Period, normal wear and tear
excepted.
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4.3 Notices. Provide to Purchaser upon the receipt thereof, any and all written default
notices, notices of violations and any other notices relating to the Property received by Seller or
its agents or representatives from any federal, state or local governmental or quasi -governmental
instrumentality, insurance company, vendor or other party under any of the Surviving Contracts,
or from any other entity or party. Seller shall give Purchaser written notice of any threat or
institution of litigation with respect to the Real Property prior to the Closing promptly following
Seller's receipt of written notice thereof.
4.4 New Contracts. After the Effective Date and prior to Closing, Seller may, without
the prior consent of Purchaser, enter into any new Contracts or modifications of any existing
Contracts provided that (i) such Contracts are terminable on not more than thirty (30) days' notice,
for any reason whatsoever and without the payment of any fees or other considerations for such
termination, (ii) Seller provides Purchaser written notice of such actions and delivers a copy of
any such Contracts to Purchaser concurrently with such notice, and (iii) any Surviving Contracts
are not materially modified. For the avoidance of doubt, following the expiration of the Due
Diligence Period, any such Contract entered into by Seller that is not a Surviving Contract shall be
terminated by Seller, at Seller's sole cost and expense, prior to or as of the Closing Date.
4.5 Encumbrances. After the Effective Date and prior to Closing, except as otherwise
permitted herein, Seller shall not enter into any leases, trust deeds, mortgages, restrictions,
encumbrances, liens, licenses or other instruments or agreements affecting the Property (or
amendments thereto) without Purchaser's prior written consent, which consent may be withheld
in Purchaser's sole and absolute discretion.
5. REPRESENTATIONS AND WARRANTIES.
5.1 By Seller. Seller represents and warrants to Purchaser, as of the Effective Date and,
as of the Closing date, that:
5.1.1 Seller is not subject to any involuntary proceeding for dissolution or
liquidation, and Seller has the power, right and authority to enter into and perform all of the
obligations required of Seller under this Agreement and the instruments and documents referenced
herein, and to consummate the transaction contemplated hereby.
5.1.2 Seller has taken all requisite action and obtained, or will obtain prior to the
Closing, all requisite consents, releases and permissions in connection with entering into this
Agreement and the instruments and documents referenced herein or required under any covenant,
agreement, encumbrance, law or regulation with respect to the obligations required hereunder.
5.1.3 This Agreement is, and all agreements, instruments and documents to be
executed and delivered by Seller pursuant to this Agreement shall be duly authorized, executed
and delivered by Seller. This Agreement and all agreements, instruments and documents to be
executed and delivered by Seller pursuant to this Agreement shall be valid and legally binding
upon Seller and enforceable in accordance with their respective terms.
5.1.4 Neither the execution of this Agreement nor the consummation of the
transactions contemplated hereby does now constitute or shall result in a breach of, or a default
under, any agreement, document, instrument or other obligation to which Seller is a party or by
which Seller may be bound.
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5.1.5 During its ownership of the Property, Seller has not manufactured, used,
stored or released, or permitted the manufacture, use, storage or release, of any Hazardous
Substances (as defined below) at or from the Property in violation of any Environmental Law.
Except as may be referenced in any environmental study or report or any other document obtained
by Seller and delivered to Purchaser, (collectively, the `Environmental Reports"), which are all the
reports in Seller's possession or control which relate to the presence of Hazardous Substances at,
under or near the Property or compliance with Environmental Laws with respect to the Property,
Seller has not received from any third party (including any federal, state or municipal
governmental agency), during Seller's ownership of the Property, any written notices (i)
demanding remediation of Hazardous Substances at, on or under the Land or Improvements, (ii)
claiming violation of any federal, state, county or municipal law, ordinance, order, regulation or
requirement affecting any portion of the Property, (iii) stating that the Seller or the Property is in
violation of any environmental laws or regulations, or (iv) stating that Seller is or may be
potentially responsible for the removal and/or cleanup of any Hazardous Substances at, on or under
the same. To Seller's knowledge, except as set forth in the Environmental Reports, there is and
has been no Hazardous Substance at, under or adjacent to the Property in violation of
Environmental Laws or for which additional investigation, clean-up or other response would be
required pursuant to Environmental Laws if disclosed to governmental authorities. As used herein,
"Hazardous Substances" means any substance or material that is defined, listed, classified or
described as a toxic or hazardous substance, waste or material or a pollutant, effluent, emission, or
contaminant, or a solid waste, in any of the Environmental Laws, and includes (a) petroleum
(including crude oil or any fraction thereof, natural gas, natural gas liquids, radon gas, liquefied
natural gas, or synthetic gas usable for fuel, or any mixture thereof), petroleum -based products and
petroleum additives and derived substances, lead -based or lead -containing paint, mold, fungi or
bacterial matter, polychlorinated biphenyls (PCBs), radioactive matter, medical waste, and
chemicals which may cause cancer or reproductive toxicity, asbestos, asbestos -containing material,
electromagnetic waves, urea formaldehyde foam insulation and transformers or other equipment
that contains dielectric fluid containing PCBs, and (b) any solid, liquid, gaseous or thermal irritant
or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals, waste, phosphates,
or chlorine. As used herein, "Environmental Laws" means all federal, state and local laws, rules,
statutes, directives, binding written interpretations, binding written policies, applicable court
decisions, ordinances and regulations, now or hereafter in force and effect and as amended from
time to time, issued by any governmental authorities in any way relating to or regulating human
health, safety, industrial hygiene or environmental conditions, or the protection of the environment
or pollution or contamination of the air (whether indoor or outdoor), soil gas, soil, surface water
or groundwater, including but not limited to CERCLA, the Hazardous Materials Transportation
Authorization Act (49 U.S.C. § 5101 et seq.), RCRA, the Solid Waste Disposal Act, the Clean
Water Act, the Federal Insecticide, Fungicide, and Rodenticide Act, the Endangered Species Act,
the Water Pollution Control Act (33 U.S.C. § 1251 et seq.), the Safe Drinking Water Act (42 U.S.C.
§ 300f et seq.), the Clean Air Act (42 U.S.C. § 7401 et seq.), the Toxic Substances Control Act (15
U.S.C. § 2601 et seq.), the Emergency Planning and Community Right -to -Know Act of 1986 (42
U.S.C. § 11001 et seq.), the Radon Gas and Indoor Air Quality Research Act (42 U.S.C. § 7401 et
seq.), the National Environmental Policy Act (42 U.S.C. § 4321 et seq.), the Occupational Safety
and Health Act (29 U.S.C. § 651 et seq.), and any and all other comparable state and local
equivalents.
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5.1.6 Seller has not (i) made a general assignment for the benefit of creditors, (ii)
filed any voluntary petition in bankruptcy or suffered the filing of any involuntary petition by
Seller's creditors, (iii) suffered the appointment of a receiver to take possession of all, or
substantially all, of Seller's assets, (iv) suffered the attachment or other judicial seizure of all, or
substantially all, of Seller's assets, or (v) made an offer of settlement, extension or composition
to its creditors generally.
5.1.7 To Seller's knowledge, the Property Documents heretofore or hereafter
delivered or otherwise made available for viewing to Purchaser prior to Closing are true, complete
and correct copies of such materials in the possession of Seller and the same have not been
amended or otherwise modified except as included in the Property Documents.
5.1.8 No person or entity, other than Purchaser, has any right, agreement,
commitment, option, right of first refusal or any other agreement, whether oral or written, with
respect to the purchase, assignment or transfer of all or any portion of the Real Property.
5.1.9 Seller is a Texas home rule municipal corporation that is duly organized,
validly existing and in good standing under the laws of the state of Texas and Seller is qualified to
do business in the jurisdiction in which the Property is located.
5.1.10 Seller warrants that it is not a "foreign person" as that term is defined in the
Internal Revenue Code of 1986, as amended and the Regulations promulgated pursuant thereto.
5.1.11 Seller warrants that none of its assets constitutes "plan assets" subject to
ERISA or Section 4975 of the Code.
5.1.12 Seller is in compliance with the requirements of Executive Order No.
133224, 66 Fed. Reg. 49079 (Sept. 25, 2001) (the "Order") and other similar requirements
contained in the rules and regulations of the Office of Foreign Assets Control, Department of the
Treasury ("OFAC") and in any enabling legislation or other Executive Orders or regulations in
respect thereof (the Order and such other rules, regulations, legislation, or orders are collectively
called the "Orders"). Further, Seller covenants and agrees to make its policies, procedures and
practices regarding compliance with the Orders, if any, available to Purchaser for its review and
inspection during normal business hours and upon reasonable prior notice.
a. Neither any Seller nor, to the extent of Seller's actual knowledge, any
beneficial owner of Seller: (i) is listed on the Specially Designated Nationals and
Blocked Persons List maintained by OFAC pursuant to the Orders and/or on any
other list of terrorists or terrorist organizations maintained pursuant to any of the
rules and regulations of OFAC or pursuant to any other applicable Orders (such
lists are collectively referred to as the "Lists"); (ii) is a person or entity who has
been determined by competent authority to be subject to the prohibitions contained
in the Orders; or (iii) is owned or controlled by, or acts for or on behalf of, any
person or entity on the Lists or any other person or entity who has been determined
by competent authority to be subject to the prohibitions contained in the Orders.
b. Seller hereby covenants and agrees that if it obtains actual knowledge that
it or any of its beneficial owners becomes listed on the Lists or is indicted,
arraigned, or custodially detained on charges involving money laundering or
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predicate crimes to money laundering, Seller shall immediately notify Purchaser in
writing, and in such event, Purchaser shall have the right to terminate this
Agreement without penalty or liability to Seller immediately upon delivery of
written notice thereof to Seller. In such event the Deposit shall be immediately
returned to Purchaser.
5.1.13 There are no legal actions, suits or similar proceedings pending and served,
or to Seller's knowledge, threatened with respect to the Property, Seller or Seller's ownership or
operation of the Property, including without limitation condemnation, takings or similar
proceedings; and Seller has received no written notice of any violations of any laws, codes,
statutes, or other governmental regulation or restrictive covenant relating to the Property; and there
are no pending or threatened challenges relating to any licenses or permits relating to the Property.
5.1.14 The Fort Worth City Council has approved in a public meeting Seller's
execution, delivery and performance of this Agreement, as well as Seller's consummation of the
transactions contemplated hereby ("City Council Approval').
Notwithstanding anything to the contrary contained herein, the representations and
warranties set forth in this Section 5 shall be true and correct in all material respects on the date
hereof and on and as of the Closing Date, and shall survive Closing of this transaction for a period
of eighteen (18) months (the "Reps and Warranties Period"). To the extent that Purchaser obtains
actual knowledge after the Closing Date that any of Seller's representations and warranties are
inaccurate, untrue or incorrect in any material respect, Purchaser shall have the remedies set forth
in Section 10.3 below. If to the knowledge of Seller a representation or warranty made herein
becomes untrue, inaccurate or incorrect in any material respect after the Effective Date and prior
to the Closing Date, or if Purchaser becomes aware of any matter which makes any of Seller's
representations or warranties untrue, inaccurate or incorrect in any material respect after the
Effective Date and prior to the Closing Date, then Seller shall provide written notice of the same
to Purchaser, or Purchaser shall provide written notice of the same to Seller, as applicable, and
Seller shall have the right (but not the obligation) to attempt to cure such misrepresentation or
warranty and shall be entitled to a reasonable postponement of the Closing (not to exceed 15 days)
in order to do so. If Seller is unable to cure such misrepresentation or warranty to Purchaser's
reasonable satisfaction prior to Closing, Purchaser will have the right to (a) terminate this
Agreement by giving written notice to Seller, whereupon the Deposit shall be delivered promptly
to Purchaser, after which neither party shall have any further rights against the other; or (b) waive
its right to terminate this Agreement and recoup its expenses or to seek or exercise any other
remedy against Seller as a result of such misrepresentation or warranty and proceed to the Closing
of the purchase of the Property. If Purchaser exercises its right to terminate this Agreement and
the breach in question constitutes an intentional breach or results from a condition, state of facts
or other matter that was actually known to Seller prior to the Effective Date of this Agreement,
Seller shall also reimburse Purchaser for Purchaser's out-of-pocket costs and expenses (including
reasonable attorneys' fees) related to the negotiation of this Agreement and Buyer's investigation
of the Property, up to a maximum of One Hundred Thousand and 00/100 Dollars ($100,000.00).
5.2 Actual Knowledge of Seller. All references in this Agreement to the "knowledge"
of Seller or "to Seller's knowledge" shall refer only to the actual knowledge of the Designated
Employee (as hereinafter defined) of Seller and shall not be construed to refer to the knowledge of
any other officer, agent or employee of Seller or any affiliate of Seller or to impose upon such
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Designated Employee any duty to investigate the matter to which such actual knowledge, or the
absence thereof, pertains. As used herein, the term "Designated Employee" shall refer to Aaron
Cutaiar, Facilities Superintendent — Property Management Department, and Marilyn Marvin,
Assistant Director — Library, each an employee who has responsibility for overseeing the
management of the Property.
5.3 By Purchaser. Purchaser represents and warrants to Seller as of the Effective Date
that:
5.3.1 Purchaser is a Delaware limited liability company that is duly organized,
validly existing and in good standing under the laws of the state of Delaware and Purchaser is, or
prior to Closing will be, qualified to do business in the jurisdiction in which the Property is located.
5.3.2 Purchaser has taken all requisite action and obtained all requisite consents,
releases and permissions in connection with entering into this Agreement and the instruments and
documents referenced herein or required under any covenant, agreement, encumbrance, law or
regulation with respect to the obligations required hereunder and no consent of any other party is
required for the performance by Purchaser of its obligations hereunder.
5.3.3 This Agreement is, and all agreements, instruments and documents to be
executed and delivered by Purchaser pursuant to this Agreement shall be, duly authorized,
executed and delivered by Purchaser. This Agreement is, and all agreements, instruments and
documents to be executed and delivered by Purchaser pursuant to this Agreement shall be, valid
and legally binding upon Purchaser and enforceable in accordance with their respective terms.
5.3.4 Neither the execution of this Agreement nor the consummation of the
transactions contemplated hereby does now constitute or shall result in a breach of, or a default
under, any agreement, document, instrument or other obligation to which Purchaser is a party or
by which Purchaser may be bound, or any law, statute, ordinance, rule, governmental regulation
or any writ, injunction, order or decree of any court or governmental body, applicable to Purchaser
or to the Property.
5.3.5 No petition in bankruptcy (voluntary or otherwise), assignment for the
benefit of creditors, or petition seeking reorganization or arrangement or other action under Federal
or state bankruptcy law is pending against or, to the good faith, actual knowledge of Purchaser,
contemplated by Purchaser.
5.3.6 There are no claims or litigation pending or, to the best of the Purchaser's
knowledge, contemplated or threatened against Purchaser that could reasonably be expected to
affect the Purchaser's ability to perform its obligations when and as required under the terms of
this Agreement.
5.4 Broker. Seller and Purchaser each represents to the other that it has had no dealings,
negotiations, or consultations with any broker, representative, employee, agent or other
intermediary in connection with the sale of the Property, other than Jones Lang Lasalle Brokerage,
Inc. ("Seller's Broker"). Seller shall pay a commission to Seller's Broker pursuant to a separate
written agreement between Seller and Seller's Broker.
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6. CONDITIONS PRECEDENT TO CLOSING.
6.1 Conditions for the Benefit of Purchaser. The obligation of Purchaser to consummate
the conveyance of the Property hereunder is subject to the full and complete satisfaction or waiver
of each of the following conditions precedent, unless waived in writing by Purchaser:
6.1.1 The City Council Approval shall remain in full force and effect and shall
not have been amended, revoked or changed in any manner that would alter or otherwise vary the
performance of any of Seller's covenants, representations, warranties or agreements set forth in
this Agreement.
6.1.2 The representations and warranties of Seller contained in this Agreement
shall be true, complete and accurate in all material respects, on and as of the date of Closing.
6.1.3 Seller shall have cured or satisfied any Objections that the Seller has agreed
to cure within the Curative Period, or Purchaser shall have waived the same.
6.1.4 Seller shall have performed all of its obligations hereunder in all material
respects unless performance thereof is waived by Purchaser.
6.2 Conditions for the Benefit of Seller. The obligation of Seller to consummate the
conveyance of the Property hereunder is subject to the full and complete satisfaction or waiver of
each of the following conditions precedent, unless waived in writing by Seller:
6.2.1 The representations and warranties of Purchaser under this Agreement shall
be true, complete and accurate in all material respects, on and as of the date of Closing as if the
same were made on and as of such date.
6.2.2 Seller shall have received City Council Approval.
6.2.3 Purchaser shall have paid the Purchase Price and performed all of its
obligations hereunder unless performance thereof is waived by Seller.
6.3 Failure of a Condition. In the event any of the conditions set forth in this Section
are not fulfilled or waived, the parties shall proceed in accordance with Section 10.1 hereof.
7. CLOSING COSTS AND PRORATIONS.
7.1 Purchaser's Costs. Purchaser will pay the following costs of closing this
transaction:
7.1.1 All endorsements to the standard Owner's Title Policy (excluding any
endorsements thereto obtained by Seller to cure Objections referred to in Section 3), all costs of
removing any so-called "preprinted standard exceptions", as well as all premiums, fees and costs
associated with the issuance of a mortgagee title insurance policy and any endorsements thereto,
if applicable;
7.1.2 (a) The costs and fees for recording the Deed, deed of trust and any other
documents that are required to be recorded in connection with this transaction and (b) one half
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(1/2) the cost of escrow fees, settlement fees and other charges of the Title Company due in
connection with the closing of this transaction;
7.1.3 The fees and disbursements of Purchaser's counsel and any other expense(s)
incurred by Purchaser or its representative(s) in inspecting or evaluating the Property or closing
this transaction;
Property.
7.1.4 All transfer taxes, if any, due in connection with the sale of the Real
7.1.5 The cost of the Survey and the Assessment, if applicable; and
7.1.6 Any other expenses customarily paid by the purchaser of similar property
in Tarrant County, Texas or that are agreed to be paid by Purchaser herein.
7.2 Seller's Costs. Seller will pay the following costs of closing this transaction:
7.2.1 One half (1/2) the cost of escrow fees, settlement fees and other charges of
the Title Company due in connection with the closing of this transaction;
7.2.2 The base premium for a standard Owner's Title Insurance Policy insuring
the Purchaser in the amount of the Purchase Price, and all expenses for endorsements thereto
required to satisfy or cure any Objections or to induce the Title Company to affirmatively insure
Purchaser against any loss or damage associated with any uncured Objections;
7.2.3 The fees and disbursements of Seller's counsel;
7.2.4 The cost of the title insurance Commitment including all title examination
fees;
7.2.5 The fees of Seller's Broker including those referred to in Section 5.4, above;
and
7.2.6 Any other expenses customarily paid by sellers of similar property in
Tarrant County, Texas or that are agreed to be paid by Seller herein.
7.3 Proration. All revenues and expenses, including, but not limited to, installment
payments of special assessment liens, vault charges, sewer charges, utility charges, reimbursement
of maintenance and repair expenses and normally prorated operating expenses billed or paid as of
the Date of Closing shall be prorated as of 11:59 p.m. C.T. on the day before the Date of Closing
and shall be adjusted against the Purchase Price due at Closing.
7.3.1 Utilities. Seller may maintain any accounts with utility companies on or
after the Closing through the term of the Leaseback.
7.4 Taxes. Seller represents that it is exempt from ad valorem taxation for the Property.
Therefore, ad valorem taxes will not be prorated, and Purchaser will be responsible for payment
of ad valorem taxes assessed against the Property for the year in which Closing occurs, but only
for the period of time after the Closing Date, and Seller shall pay for any taxes and assessments
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applicable to the Property up to the date of Closing. The provisions of this Section 7.4 survive the
Closing.
7.5 In General. Any other costs or charges of closing this transaction not specifically
mentioned in this Agreement shall be paid and adjusted in accordance with local custom or
ordinance in the jurisdiction in which the Property is located.
7.6 Purpose and Intent. Except as expressly provided herein, the general purpose and
intent as to the provisions of proration and apportionments set forth in this Section 7 and elsewhere
in this Agreement is that Seller shall bear all expenses of ownership and operation of the Property
during its period of ownership and shall receive all income therefrom accruing through midnight
of the day preceding the Closing and Purchaser shall bear all such expenses and receive all such
income accruing thereafter.
8. CLOSING AND ESCROW.
8.1 Closing. The purchase and sale of the Property shall be consummated at closing
(the "Closing') through a closing compliant with Texas Department of Insurance rules and
regulations administered by the Title Company on or before thirty (30) calendar days after the
expiration of the Due Diligence Period (the "Date of Closing" or "Closing Date'). Closing shall
occur on the Date of Closing through escrow at the offices of the Title Company, or at such other
time and place as may be agreed to in writing by Seller and Purchaser.
8.2 Seller's Deliveries. Seller shall deliver either at the Closing or by making available
at the Property, as appropriate, the following original documents, each executed and, if required,
acknowledged:
8.2.1 A Special Warranty Deed (the "Deed") in a form to be agreed upon by
Purchaser and Seller, conveying the Real Property subject only to a reservation of minerals
including a surface use waiver, and Permitted Matters, with warranty of title to the Real Property
in the Deed limited to the acts of the Seller during its course of ownership of the Real Property and
as to claims made by, through or under Seller, but not otherwise;
8.2.2 Originals (to the extent in Seller's possession or on the site of the Real
Property) of the Surviving Contracts; an assignment of the Surviving Contracts and Intangible
Property to Purchaser by way of an assignment and assumption agreement, in a form to be agreed
upon by Purchaser and Seller (the "Assignment of Contracts and Intangible Property'), conveying
to Purchaser Seller's rights, title and interest in and to Surviving Contracts and Intangible Property
attributable to the Property
8.2.3 An affidavit pursuant to the Foreign Investment and Real Property Tax Act
in the form attached hereto as Schedule 8.2.3 (the "FIRPTA").
8.2.4 Appropriate evidence of Seller's authority and the authority of the person
executing any documents at Closing on behalf of Seller, acceptable to the Title Company, to enter
into the transactions contemplated by this Agreement.
8.2.5 An "Owner's Affidavit" to the Title Company in the form attached hereto
as Schedule 8.2.5.
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8.2.6 A settlement statement to the Title Company (the "Settlement Statement"),
prepared by the Title Company.
8.2.7 Such other documents, certificates and other instruments as may be
reasonably required to consummate the transaction contemplated hereby, provided such documents
do not increase Seller's liability hereunder.
8.2.8 An affidavit of Seller regarding mechanics' and materialmen's liens,
possession of Property, the authority of and power of Seller to complete the transactions provided
for herein, and gap coverage in a form reasonably acceptable to Purchaser and the Title Company
(the "Title Affidavit").
8.2.9 A Non -Foreign Certificate inform reasonably acceptable to Purchaser.
8.3 Purchaser's Deliveries. At the Closing, Purchaser shall (a) pay Seller the Purchase
Price as required by Section 2 hereof, and (b) execute and deliver the following documents:
8.3.1 Evidence of Purchaser's authority, and the authority of the person executing
any documents at Closing on behalf of Purchaser, acceptable to Seller and the Title Company, to
enter into the transactions contemplated by this Agreement.
8.3.2 The Settlement Statement.
8.3.3 The Leaseback Agreement.
8.3.4 The New Library Option Agreement.
8.3.5 Such other documents, certificates and other instruments as may be
reasonably required to consummate the transaction contemplated hereby.
8.4 Possession. Subject to the Leaseback Agreement, Purchaser shall be entitled to
possession of the Property at the conclusion of the Closing subject to Permitted Matters,
8.5 Escrow Closing. Purchaser and Seller (or their respective counsel on behalf of
Purchaser and Seller) shall execute letters of escrow closing instructions (the "Closing
Instructions") which will provide that, on the Date of Closing: (a) Seller and Purchaser shall each
deposit with the Title Company all of the documents and instruments described in Sections 8.2 and
8_3, above (the "Closing Documents"); and (b) Purchaser shall deposit with the Title Company the
balance of the Purchase Price required to be paid after application of the Deposit thereto and any
proration, adjustment and/or credit required to be made under this Agreement (the "Adjusted
Purchase Price"), all of which shall be set forth on, and mutually agreeable pursuant to, a
Settlement Statement executed by both Purchaser and Seller at Closing. Upon receipt of the
Adjusted Purchase Price, and the satisfaction of all other conditions set forth in the Closing
Instructions, the Title Company shall be authorized and directed to disburse the Adjusted Purchase
Price to Seller or its designee(s), record the Deed in the conveyance records of Tarrant County,
Texas, and release the remaining Closing Documents to the appropriate parties, all in strict
accordance with the Closing Instructions.
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9. DAMAGE, DESTRUCTION AND CONDEMNATION.
9.1 Casual . Except as provided herein, Seller assumes all risk of loss or damage to
the Property by fire or other casualty until the Closing. If at any time on or prior to the Date of
Closing any portion of the Property is destroyed or damaged as a result of fire or any other cause
whatsoever, Seller shall promptly give written notice thereof to Purchaser. If the estimated cost to
repair the damage or destruction exceeds $1,000,000.00 as reasonably estimated by Seller, then
either Purchaser or Seller shall have the right to terminate this Agreement by written notice to the
other party within ten (10) days following the date upon which Purchaser receives Seller's written
notice of the destruction or damage. If either party timely elects to terminate this Agreement within
the aforesaid period, the Title Company shall return the Deposit to Purchaser, and upon Purchaser's
receipt of the same, this Agreement shall terminate as of the date of the damage or destruction, and
neither parry shall have any further obligations to the other except for any obligations that survive
termination, as specifically set forth herein. If neither party elects to terminate this Agreement, or
if the cost of repair is equal to or less than $1,000,000.00, this Agreement shall remain in full force
and effect, and Seller, upon the mutual agreement of Seller and Purchaser, shall do one of the
following: (i) perform any necessary repairs if the same can be completed prior to the Closing Date
(as reasonably determined by Seller), or (ii) if such repairs cannot be completed prior to the Closing
Date, then at the Closing, Purchaser shall be assigned all of Seller's right, title and interest in and
to the insurance proceeds under Seller's insurance policy covering such casualty, if any (or, if there
is no such insurance policy in place because Seller has elected to self -insure, Seller shall pay
Purchaser the amount that would have been paid under a replacement value property insurance
policy for the Building), and the parties shall proceed to Closing with a reduction in the Purchase
Price in the amount of the deductible under such policy (or the amount of any deductible
maintained under Seller's self-insurance program).
9.2 Condemnation. In the event, at any time on or prior to the Date of Closing, any
action or proceeding is filed, under which the Property, or any portion thereof, may be taken
pursuant to any law, ordinance or regulation or by condemnation or the right of eminent domain,
Seller shall promptly give written notice thereof (which notice shall describe the type of action
being taken against the Property, and which portions of the Property will be affected thereby) to
Purchaser. In the event such taking adversely affects any portion of any building improvements on
the Property, or makes the use of the Property non -conforming or permanently, adversely affects
access to the Real Property, or permanently impairs the current use or Purchaser's intended
development of the Real Property, Purchaser or Seller shall have the right to terminate this
Agreement by written notice to the other party on or prior to the earlier of (i) ten (10) days
following the date upon which Purchaser receives Seller's written notice of such action or
proceeding or (ii) the Date of Closing. I£ either party timely elects to terminate this Agreement
within the aforesaid period, the Title Company shall return the Deposit to Purchaser, and upon
Purchaser's receipt of the same, this Agreement shall terminate and neither party shall have any
further obligations to the other except for any obligations that survive termination, as specifically
set forth herein. If Purchaser or Seller does not elect to terminate this Agreement within the
aforesaid period, this Agreement shall remain in full force and effect and the parties shall proceed
to closing without any reduction or adjustment in the Purchase Price, except that all condemnation
proceeds will be assigned to Purchaser. Seller agrees that Seller shall not institute any
condemnation action or proceeding that would result in a total taking of the Property within ten
(10) years of Closing.
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10. FAILURE OF CONDITIONS PRECEDENT; DEFAULT AND REMEDIES.
10.1 Failure of Conditions Precedent. If any of the conditions precedent stated in Section
6 have not occurred or been satisfied on or before the Closing Date, the party in whose favor the
relevant condition precedent runs may: (a) terminate this Agreement by written notice to the
appropriate party on or before the Closing Date, in which event the Title Company shall deliver
the Deposit to the appropriate party as determined by the applicable provision for the return of the
Deposit and this Agreement shall terminate and neither party shall have any further obligations to
the other except as specifically set forth in this Agreement, or (b) waive such conditions precedent
and proceed to Closing. In addition, if the condition precedent with respect to City Council
Approval set forth in Section 6.1.1 is not satisfied on the Closing Date, Seller shall be required to
reimburse Purchaser for Purchaser's out-of-pocket costs and expenses (including reasonable
attorneys' fees) related to the negotiation of this Agreement and Buyer's investigation of the
Property, up to a maximum of One Hundred Thousand and 00/100 Dollars ($100,000.00).
10.2 Purchaser Default. IF PURCHASER FAILS TO COMPLETE THE PURCHASE
PROVIDED FOR HEREIN DUE TO PURCHASER'S MATERIAL DEFAULT OR FAILURE TO
COMPLY WITH THE TERMS AND CONDITIONS UNDER THIS AGREEMENT, AND
PROVIDED THAT SELLER IS NOT IN MATERIAL BREACH OF THIS AGREEMENT,
SELLER, AS ITS SOLE AND EXCLUSIVE REMEDY, SHALL RETAIN AN AMOUNT
EQUAL TO TEN PERCENT (10%) OF PURCHASER'S DEPOSIT AS FULLY LIQUIDATED
DAMAGES AND AS SELLER'S SOLE AND EXCLUSIVE REMEDY, WITH THE BALANCE
OF THE DEPOSIT BEING RETURNED TO PURCHASER, WHICH THE PARTIES AGREE IS
A REASONABLE SUM CONSIDERING ALL OF THE CIRCUMSTANCES EXISTING ON
THE DATE OF THIS AGREEMENT, INCLUDING THE RELATIONSHIP OF SAID SUM TO
THE RANGE OF HARM THAT REASONABLY COULD BE ANTICIPATED AND THE
ANTICIPATION THAT PROOF OF ACTUAL DAMAGES WOULD BE COSTLY OR
INCONVENIENT. IN PLACING ITS INITIALS AT THE PLACE PROVIDED BELOW, EACH
PARTY SPECIFICALLY CONFIRMS THE ACCURACY OF THE STATEMENTS MADE
ABOVE AND THE FACT THAT EACH WAS REPRESENTED BY COUNSEL WHO
EXPLAINED THE CONSEQUENCES OF THIS LIQUIDATED DAMAGES PROVISION AT
TNF. TTMF. MR AGREEMENT WAS MADE.
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Seller's Initials
9
Purchaser's Initials
10.3 Seller Default. In the event Seller defaults or fails to perform any of the covenants
and conditions of Seller under this Agreement, or any of the representations and warranties of
Seller were untrue, incorrect or misleading as of the date made (or recertified), as its sole remedy
Purchaser shall be entitled to exercise any one of the following rights or remedies: (i) the right to
terminate this Agreement by giving written notice to Seller, whereupon the Deposit shall be
delivered promptly to Purchaser, (ii) the right to enforce specific performance of Seller's obligation
hereunder, or (iii) Purchaser may exercise any rights available at law or in equity, for recovery of
actual out-of-pocket losses or damages (but not exemplary or consequential damages), not to
exceed One Hundred Thousand and 00/100 Dollars ($100,000.00).
10.4 Termination. Upon any termination of this Agreement pursuant to any right of a
party to terminate set forth in this Agreement, (a) the Deposit shall be paid over to the party entitled
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to the same as set forth herein, and (b) all documents deposited by Purchaser and Seller into escrow
shall be returned by the Title Company to the party depositing the same, whereupon the parties
will have no continuing liability to each other unless otherwise expressly stated in any provision
of this Agreement.
11. NOTICES. Any notice required or permitted to be given hereunder may be served
by a party or its attorney and must be in writing and shall be deemed to be given when (a) hand
delivered, (b) delivered to United Parcel Service (Overnight) or Federal Express, or another similar
overnight express service, or (c) transmitted by electronic mail (provided that a copy is also sent
by the manner described in clause (a) or (b) on the following business day), in any case addressed
to the parties at their respective addresses set forth below:
If to Purchaser: City of Fort Worth
Property Management Department
200 Texas Street
Fort Worth, TX 76102
Attn: Ricky Salazar, Assistant Director
Ricardo. Salazar@fortworthtexas.gov
With a copy to: City of Fort Worth
200 Texas Street
Fort Worth, TX 76102
Matthew A. Murray, Assistant City Attorney
Matthew.Murray@fortworthtexas.gov
If to Seller: Dart Interests LLC
3811 Turtle Creek Blvd., Suite 975
Dallas, TX 75219
Attn: Christopher Kelsey, President
CKelsey@dartinterests.com
With a copy to: Dart Interests LLC
3811 Turtle Creek Blvd., Suite 975
Dallas, TX 75219
Attn: Ernesto Alcalde, Vice President, Underwriting
EAlcalde@dartinterests.com
And a copy to: Winston & Strawn LLP
2121 N. Pearl Street, Suite 900
Dallas, TX 75201
Attn: Billie Ellis
BEllis@winston.com
And a copy to: Winston & Strawn LLP
800 Capitol Street, Suite 800
Houston, TX 77002
Attn: Douglas A. Yeager
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DYeager@winston.com
If to Title Company: Rattikin Title Company
201 Main Street, Suite 800
Fort Worth, Texas 76102
Attention: Mac Miles
Email: mmiles@rattikintitle.com
or, in each case, to such other address as either party may from time to time designate by giving
notice in writing pursuant to this Section 11 to the other party. Telephone numbers are for
informational purposes only. Effective notice will be deemed given only as provided above, except
as otherwise expressly provided in this Agreement.
12. DISCLAIMERS. EXCEPT AS EXPRESSLY SET FORTH IN THIS
AGREEMENT AND/OR THE OTHER DOCUMENTS AND INSTRUMENTS TO BE
DELIVERED BY SELLER AT CLOSING, IT IS UNDERSTOOD AND AGREED THAT
SELLER IS NOT MAKING AND HAS NOT AT ANY TIME MADE ANY WARRANTIES OR
REPRESENTATIONS OF ANY KIND OR CHARACTER, EXPRESS OR IMPLIED, WITH
RESPECT TO THE PROPERTY, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES
OR REPRESENTATIONS AS TO HABITABILITY, MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, TITLE (OTHER THAN SELLER'S WARRANTY OF TITLE TO BE
SET FORTH IN THE DEED), ZONING, TAX CONSEQUENCES, PHYSICAL OR
ENVIRONMENTAL CONDITION, UTILITIES, OPERATING HISTORY OR PROJECTIONS,
VALUATION, GOVERNMENTAL APPROVALS, THE COMPLIANCE OF THE PROPERTY
WITH GOVERNMENTAL LAWS, THE TRUTH, ACCURACY OR COMPLETENESS OF THE
PROPERTY DOCUMENTS OR ANY OTHER INFORMATION PROVIDED BY OR ON
BEHALF OF SELLER TO PURCHASER, OR ANY OTHER MATTER OR THING
REGARDING THE PROPERTY. PURCHASER ACKNOWLEDGES AND AGREES THAT
UPON CLOSING SELLER SHALL SELL AND CONVEY TO PURCHASER AND
PURCHASER SHALL ACCEPT THE PROPERTY "AS IS, WHERE IS, WITH ALL FAULTS,"
EXCEPT TO THE EXTENT EXPRESSLY PROVIDED OTHERWISE IN THIS AGREEMENT.
PURCHASER HAS NOT RELIED AND WILL NOT RELY ON, AND SELLER IS NOT LIABLE
FOR OR BOUND BY, ANY EXPRESS OR IMPLIED WARRANTIES, GUARANTIES,
STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING TO THE
PROPERTY OR RELATING THERETO MADE OR FURNISHED BY SELLER, THE
MANAGER OF THE PROPERTY, OR ANY REAL ESTATE BROKER OR AGENT
REPRESENTING OR PURPORTING TO REPRESENT SELLER, TO WHOMEVER MADE
OR GIVEN, DIRECTLY OR INDIRECTLY, VERBALLY OR IN WRITING, UNLESS
SPECIFICALLY SET FORTH IN THIS AGREEMENT. PURCHASER REPRESENTS TO
SELLER THAT PURCHASER HAS CONDUCTED, OR WILL CONDUCT PRIOR TO
CLOSING, SUCH INVESTIGATIONS OF THE PROPERTY, INCLUDING BUT NOT
LIMITED TO, THE PHYSICAL AND ENVIRONMENTAL CONDITIONS THEREOF, AS
PURCHASER DEEMS NECESSARY TO SATISFY ITSELF AS TO THE CONDITION OF THE
PROPERTY AND THE EXISTENCE OR NONEXISTENCE OR CURATIVE ACTION TO BE
TAKEN WITH RESPECT TO ANY HAZARDOUS OR TOXIC SUBSTANCES ON OR
DISCHARGED FROM THE PROPERTY, AND WILL RELY SOLELY UPON SAME AND NOT
UPON ANY INFORMATION PROVIDED BY OR ON BEHALF OF SELLER OR ITS AGENTS
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OR EMPLOYEES WITH RESPECT THERETO, OTHER THAN SUCH REPRESENTATIONS,
WARRANTIES AND COVENANTS OF SELLER AS ARE EXPRESSLY SET FORTH IN THIS
AGREEMENT. UPON CLOSING, PURCHASER SHALL ASSUME THE RISK THAT
ADVERSE MATTERS, INCLUDING BUT NOT LMTED TO, CONSTRUCTION DEFECTS
AND ADVERSE PHYSICAL AND ENVIRONMENTAL CONDITIONS, MAY NOT HAVE
BEEN REVEALED BY PURCHASER'S INVESTIGATIONS, AND PURCHASER, UPON
CLOSING, SHALL BE DEEMED TO HAVE WAIVED, RELINQUISHED AND RELEASED
SELLER FROM AND AGAINST ANY AND ALL CLAIMS, DEMANDS, CAUSES OF
ACTION (INCLUDING CAUSES OF ACTION IN TORT), LOSSES, DAMAGES,
LIABILITIES, COSTS AND EXPENSES (INCLUDING ATTORNEYS' FEES AND COURT
COSTS) OF ANY AND EVERY KIND OR CHARACTER, KNOWN OR UNKNOWN, WHICH
PURCHASER MIGHT HAVE ASSERTED OR ALLEGED AGAINST SELLER AT ANY TIME
BY REASON OF OR ARISING OUT OF ANY CONSTRUCTION DEFECTS, PHYSICAL
CONDITIONS, VIOLATIONS OF ANY APPLICABLE LAWS (INCLUDING ANY
ENVIRONMENTAL LAWS) AND ANY AND ALL OTHER ACTS, OMISSIONS, EVENTS,
CIRCUMSTANCES OR MATTERS REGARDING THE PROPERTY; PROVIDED,
HOWEVER, THAT THE FOREGOING PROVISION SHALL NOT BE CONSTRUED TO
LIMIT ANY REMEDY PROVIDED TO PURCHASER UNDER SECTION 5.1 AND SECTION
10.3 OF THIS AGREEMENT. THE PROVISIONS OF THIS SECTION 12 SHALL SURVIVE
THE CLOSING.
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Seller's Initials
13. MISCELLANEOUS.
Purchaser's Initials
13.1 Entire Agreement. This Agreement, together with the Exhibits and Schedules
attached hereto, all of which are incorporated by reference, is the entire agreement between the
parties with respect to the subject matter hereof, and no alteration, modification or interpretation
hereof shall be binding unless in writing and signed by both parties.
13.2 Severability. If any provision of this Agreement or its application to any party or
circumstances shall be determined by any court of competent jurisdiction to be invalid and
unenforceable to any extent, the remainder of this Agreement or the application of such provision
to such person or circumstances, other than those as to which it is so determined invalid or
unenforceable, shall not be affected thereby, and each provision hereof shall be valid and shall be
enforced to the fullest extent permitted by law.
13.3 A_p_plicable Law; Venue. This Agreement shall be construed and enforced in
accordance with the internal laws of the state in which the Land is located. Venue shall lie in
Tarrant County, Texas.
13.4 Waiver of Jury Trial. TO THE MAYJAIUM EXTENT PERMITTED BY LAW,
SELLER AND PURCHASER EACH, AFTER CONSULTATION WITH COUNSEL,
KNOWINGLY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY LITIGATION OR TO
HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE ARISING OUT OF OR WITH
RESPECT TO THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR
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AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE
TRANSACTIONS RELATED HERETO.
13.5 Assi as;rl bility. Purchaser may not directly or indirectly assign or transfer any of
Purchaser's rights, obligations and interests under this Agreement, to any person or entity without
the prior written consent or approval of Seller, which consent or approval must be requested in
writing and received by the Seller not less than five (5) business days prior to the Closing Date
and which consent may be given in Seller's sole and absolute discretion. Notwithstanding the
foregoing, Purchaser may assign its rights under this Agreement to an entity controlling, controlled
by, or under common control with, Purchaser (an "Assignee"), provided that such Assignee
expressly assumes all of the obligations of Purchaser hereunder in a written agreement and such
Assignee makes each and all of the representations and warranties made by Purchaser herein.
13.6 Successors Bound. This Agreement shall be binding upon and inure to the benefit
of Purchaser, Seller and their respective successors and permitted assigns.
13.7 Captions; Interpretation. The captions in this Agreement are inserted only as a
matter of convenience and for reference and in no way define, limit or describe the scope of this
Agreement or the scope or content of any of its provisions. Whenever the context may require,
words used in this Agreement shall include the corresponding feminine, masculine, or neuter
forms, and the singular shall include the plural and vice versa. Unless the context expressly
indicates otherwise, all references to "Section" are to sections of this Agreement.
13.8 No Partnership. Nothing contained in this Agreement shall be construed to create a
partnership or joint venture between the parties or their successors in interest or permitted assigns.
13.9 Time of Essence. Time is of the essence with respect to the performance of the
obligations of Seller and Purchaser under this Agreement.
13.10 Counterparts. This Agreement may be executed, witnessed and delivered in any
number of counterparts, each of which so executed and delivered shall be deemed to be an original
and all of which shall constitute one and the same instrument. A ".pdf' signature page delivered
by the parties' counsel via electronic mail shall be as acceptable as an original. A fully executed
copy of this Agreement shall be enforceable as an original, the parties hereto waiving any rule of
evidence requiring production of the original.
13.11 Recordation. Purchaser and Seller agree not to record this Agreement or any
memorandum hereof or any Affidavit of Interest or other document or record prior to Closing.
13.12 Proper Execution. This Agreement shall have no binding force and effect on either
party unless and until both Purchaser and Seller shall have executed and delivered this Agreement.
13.13 Waiver. No waiver of any breach of any agreement or provision contained herein
shall be deemed a waiver of any preceding or succeeding breach of any other agreement or
provision herein contained. No extension of time for the performance of any obligation or act shall
be deemed an extension of time for the performance of any other obligation or act.
13.14 Business Days. If any date herein set forth for the performance of any obligations
by Seller or Purchaser or for the delivery of any instrument or notice as herein provided should
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fall on a Saturday, Sunday or Legal Holiday (hereinafter defined), the compliance with such
obligations or delivery shall be deemed acceptable on the next business day following such
Saturday, Sunday or Legal Holiday. As used herein, the term "Legal Holiday" shall mean any local
or federal holiday on which post offices are closed in Fort Worth, Texas.
13.15 Prohibited Persons and Transactions. Purchaser represents and warrants to
Purchaser's knowledge: (i) Purchaser is not a Prohibited Person (defined below); (ii) none of its
investors owning twenty percent (20%) or more of the limited liability company interests in
Purchaser, is a Prohibited Person; (iii) the funds or other assets Purchaser will transfer to Seller
under this Agreement are not the property of, or beneficially owned, directly or indirectly, by a
Prohibited Person; and (iv) the funds or other assets Purchaser will transfer to Seller under this
Agreement are not the proceeds of specified unlawful activity as defined by 18 U.S.C. §
1956(c)(7). "Prohibited Person" means any of the following: (a) a person or entity that is listed in
the Annex to, or is otherwise subject to the provisions of, Executive Order No. 13224 on Terrorist
Financing (effective September 24, 2001) (the "Executive Order"); (b) a person or entity owned
or controlled by, or acting for or on behalf of any person or entity that is listed in the Annex to, or
is otherwise subject to the provisions of, the Executive Order; (c) a person or entity that is named
as a "specially designated national" or "blocked person" on the most current list published by the
U.S. Treasury Department's Office of Foreign Assets Control ("OFAC") at its official website,
http://www.trcas.gov/offices/enforcement/ofac; (d) a person or entity that is otherwise the target
of any economic sanctions program currently administered by OFAC; or (e) a person or entity that
is affiliated with any person or entity identified in clause (a), (b), (c) and/or (d) above. The
foregoing representations shall survive Closing and any termination of this Agreement.
13.16 1031 Exchange. Each party acknowledges that the other party may desire to
effectuate a tax -deferred exchange (also known as a "1031" exchange) in connection with the
Closing. Therefore, each party, at no cost or liability to such party, shall cooperate with each other
in connection with each party's respective 1031 exchange, including that the parties will execute
such documents as may reasonably be required for each of Seller and Purchaser, as applicable, to
qualify this transaction for treatment under Section 1031 of the Internal Revenue Code. To the
extent permitted by Texas law and without waiving Seller's sovereign immunity, each party agrees
to (and any exchange agreement shall provide that the exchanging party shall) hold the other party
harmless from any claims or causes of action arising out of, or related to, the exchange. The
Closing is not conditioned on the closing (in escrow or otherwise) of exchange property. Nothing
contained in this Section or the exchange agreements shall in any way (i) require the other party
to take title to any other property, or (ii) limit each party's covenants and obligations under this
Agreement, including, but not limited to, any of same which survive Closing or the termination of
this Agreement pursuant to its terms, or (iii) result in a delay in Closing.
13.17 Limited Liabilitv. Seller and Purchaser each agrees that it does not have and will
not have any claims or causes of action against any disclosed or undisclosed officer, director,
employee, trustee, shareholder, partner, principal, parent, subsidiary or other affiliate of the other
party, or any officer, director, employee, trustee, shareholder, partner or principal of any such
parent, subsidiary or other affiliate (collectively, the "Other Parry's Affiliates"), arising out of or
in connection with this Agreement or the transactions contemplated hereby. Seller and Purchaser
each agrees to look solely to the other party and its assets for the satisfaction of any liability or
obligation arising under this Agreement or the transactions contemplated hereby, or for the
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performance of any of the covenants, warranties or other agreements contained herein, and further
agrees not to sue or otherwise seek to enforce any personal obligation against any of the Other
Party's Affiliates with respect to any matters arising out of or in connection with this Agreement
or the transactions contemplated hereby. The provisions of this Section 13.16 shall survive the
termination of this Agreement and the Closing, in either case as applicable, for a period of one (1)
year.
[Signature page follows]
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SELLER:
CITY OF FORT NORTH, TEXAS
,9jli2a Buvghd
By:
Dana eurghdoff(6eC 28, 202213:47 CST)
Dana Burghdoff, Assistant City Manager
Date: Dec 28, 2022
ATTEST:
�zgeegt g c). GDOGiaL�
Jan nette S. Goodall (Jan 4, 2023 15:34 CST)
Jannette S. Goodall
City Secretary
APPROVED AS TO LEGALITY AND FORM:
Matthew A. Murray
Assistant City Attorney
M&c: 22-1056
Date: 12/13/2022
Contract Compliance Manager:
By signing I acknowledge that I am the person responsible for the monitoring and administration
of this ion ac , including ensuring all performance and reporting requirements.
Ri ky Salazar, Assistant Director
Property Management Department — Real Estate Division
PURCHASER:
DART INTERESTS LLC
By:
Name: vrWt" Ae
Title: C
Date: .22 Zee RZAa
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ACKNOWLEDGMENT BY TITLE COMPANY
The Title Company hereby acknowledges receipt of a counterpart of this Agreement
executed by Seller and Purchaser on December 29 , 2022.
RATTIKIN TITLE COMPANY
By: Mega Newburn (Dec 29, 2022 12:47 CST)
-
Name
Title:
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Mac Miles or Megan Newborn
Vice President
SCHEDULE 1.1.1
LEGAL DESCRIPTION
Approximately 2.32 acres of land known as 500 W. 3rd Street, Fort Worth, Texas 76102 and being
described as Block 45R to the Original Town of Fort Worth.
Tarrant Appraisal District Account Number 06533019
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SCHEDULE 1.1.4
SERVICE CONTRACTS
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SCHEDULE 1.4
Form of Leaseback Agreement
LEASE AGREEMENT BETWEEN
[DART INTERESTS, LLC] 1
A Delaware limited liability company]
AS LANDLORD,
AND
CITY OF FORT WORTH, TEXAS
AS TENANT
DATED 2022
500 W. 3'd Street
Fort Worth, Texas
1 Purchaser under PSA.
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BASIC LEASE INFORMATION
Lease Date: 2022
2Landlord: [Dart Interests, LLC, a Delaware limited liability company]
Tenant: CITY OF FORT WORTH TEXAS
Premises: All of that certain building (the "Buildin ") whose street address is 500 W 3rd Street, Fort
Worth, Texas. The land on which the Project is located (the "Land") is described on Exhibit
A. The term "Project" shall collectively refer to the Building, the Land and the driveways,
parking facilities, and similar improvements and easements associated with the foregoing or
the operations thereof.
Term: One (1) year starting on the Commencement Date and ending at 5:00 p.m. local time on the
day prior to the first (I) anniversary of the Commencement Date, subject to adjustment and
earlier termination as provided in the Lease.
Option to One (1) renewal option for a term of one (1) year, pursuant to the terms set forth in Exhibit
Extend: C attached hereto (the "Extension Option').
Commencement 2022
Date:
Basic Rent: Basic Rent for the first Lease Year shall be equal to $400,000,00 ($33,333.33 per month).
On the Commencement Date, Tenant shall pay to Landlord the Basic Rent payment for the
first month of the Lease Year. On the first day of the second calendar month of the Lease
Year and each month thereafter, Tenant shall make Basic Rent payments as otherwise
provided in this Lease. All other sums due under this Lease, including Additional Rent, shall
be payable as provided in this Lease. As used herein, the term "Lease Year" means the 12
full calendar month period following the Commencement Date.
Option to One-time option to terminate the Lease pursuant to the terms set forth in Exhibit D attached
Terminate: hereto (the "Termination Option").
Security Deposit: $33,333.33
Additional Rent: Impositions, Landlord's Insurance Costs, and all other costs due from Tenant to Landlord
pursuant to the terms of this Lease.
Rent: Basic Rent, Additional Rent, and all other sums that Tenant may owe to Landlord or
otherwise be required to pay under the Lease.
2 Purchaser under PSA.
ii
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Permitted Use: Public library servicing the community and other lawful business purposes reasonably
related to the operation of a public library at the Premises to the extent permitted by
applicable Law, all as conducted in compliance with this Lease.
Purchase and Purchase and Sale Agreement dated as of , 2022, between Tenant, as Seller,
Sale Agreement: and Dart Interests, LLC, as Purchaser, as subsequently assigned to Landlord.
Tenant's 500 W. 3rd Street
Address: Fort Worth, Texas 76102
Attn: Ricky Salazar, Assistant Director
Telephone: (817) 392-8379
Email: Ricardo.Salazar@fortworthtexas.gov
Landlord's For all Notices:
Address:
3811 Turtle Creek Blvd
Suite 975
Dallas, Texas 75201
Attention: [
Telephone: [
Email: [
With a copy to:
200 Texas Street
Fort Worth, Texas 761102
Attn: Matthew A. Murray
Telephone: (817) 392-8864
Email:
Matthew.Murray@fortworthtexas.gov
With a copy to:
Winston & Strawn, LLP
2121 North Pearl Street, Suite 900
Dallas, Texas 75201
Attention: Billie Ellis, Jr;
Douglas A. Yeager
Telephone: (214) 453-6445;
(713) 651-2696
Email: bellis@winston.com;
dyeager@winston.com
The foregoing Basic Lease Information is incorporated into and made a part of the Lease identified above. If
any conflict exists between any Basic Lease Information and the Lease, then the Lease shall control.
ui
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LEASE
This Lease Agreement (this "Lease") is entered into as of the Lease Date between Landlord
and Tenant (as each such term is defined in the Basic Lease Information).
1. Definitions and Basic Provisions. The definitions and basic provisions set forth
in the Basic Lease Information (the "Basic Lease Information") are incorporated herein by
reference for all purposes. Additionally, the following terms shall have the following meanings
when used in this Lease: "Affiliate" means any person or entity which, directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under common control with
the party in question; `Building's Structure" means all structural portions of the Premises,
including, without limitation, the Building's roof and roof membrane, elevator shafts, footings,
foundations, structural portions of load -bearing walls, structural floors and subfloors, structural
columns and beams, and curtain walls; `Building's Systems" means all systems servicing the
Project, including, without limitation, the Building's HVAC, life -safety, plumbing, electrical,
mechanical and elevator systems; "including" means including, without limitation; "Laws" means
all federal, state and local laws, ordinances, building codes and standards, rules and regulations,
all court orders, governmental directives, and governmental orders and all interpretations of the
foregoing, and all restrictive covenants affecting the Project, and "Law" means any of the
foregoing; "Tenant's Off -Premises Equipment" means any of Tenant's equipment or other
property that may be located on or about the Project (other than inside the Premises); and "Tenant
Parr " means any of the following persons: Tenant; any assignees claiming by, through, or under
Tenant; any subtenants claiming by, through, or under Tenant; and any of their respective agents,
contractors, employees, licensees, guests and invitees.
2. Lease Grant. Subject to the terms of this Lease, Landlord leases to Tenant, and
Tenant leases from Landlord, the Premises. LANDLORD LEASES AND TENANT TAKES
THE PREMISES "AS IS", AND TENANT ACKNOWLEDGES THAT LANDLORD
(WHETHER ACTING AS LANDLORD HEREUNDER OR IN ANY OTHER CAPACITY) HAS
NOT MADE AND WILL NOT MAKE, NOR SHALL LANDLORD BE DEEMED TO HAVE
MADE, ANY WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, WITH
RESPECT TO ANY OF THE PREMISES, INCLUDING ANY WARRANTY OR
REPRESENTATION AS TO ITS SUITABILITY, FITNESS FOR ANY PARTICULAR USE OR
PURPOSE, AS TO THE QUALITY OF THE MATERIAL OR WORKMANSHIP THEREIN,
LATENT OR PATENT, AS TO LANDLORD'S TITLE THERETO, OR AS TO VALUE,
COMPLIANCE WITH SPECIFICATIONS, DESIGN, LOCATION, USE, OPERATION,
CONDITION, MERCHANTABILITY, QUALITY, DESCRIPTION, DURABILITY,
ENVIRONMENTAL OR SOIL CONDITION OR AVAILABILITY OF UTILITIES, IT BEING
AGREED THAT ALL RISKS INCIDENT TO ANY OF THE FOREGOING ARE TO BE
BORNE BY TENANT. Tenant acknowledges and agrees that (i) Tenant has been the occupant of
the Premises prior to the Lease Date of this Lease, (ii) the Premises are of its selection and to its
specifications, (iii) the Premises have been inspected by Tenant and are satisfactory to it and (iii)
Tenant has examined the title to the Premises prior to the execution and delivery of this Lease and
has found such title to be satisfactory for the purposes contemplated by this Lease. In the event of
any defect or deficiency in any of the Premises of any nature, whether patent or latent, Landlord
shall not have any responsibility or liability with respect thereto or for any incidental, special,
punitive or consequential damages (including strict liability in tort). The provisions of this Section
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2 have been negotiated, and the foregoing provisions are intended to be a complete exclusion and
negation of any warranties by Landlord, express or implied, with respect to any of the Leased
Premises, arising pursuant to any law now or hereafter in effect or otherwise.
3. Possession. Possession of the Premises will be tendered to Tenant on the
Commencement Date.
4, Rent.
4.1 Payment. Tenant shall timely pay to Landlord Rent, without notice,
demand, deduction or set off, by good and sufficient check drawn on a national banking
association, or, at either parry's election, by electronic or wire transfer, at Landlord's address
provided for in this Lease or such other address as may be specified in writing by Landlord. The
obligations of Tenant to pay Rent to Landlord and the obligations of Landlord under this Lease are
independent obligations. Basic Rent, adjusted as herein provided, shall be payable monthly in
advance. The first installment of Basic Rent for the first month is due upon execution of this Lease
by Tenant; thereafter, Basic Rent shall be payable on the first day of each calendar month
beginning on the first day of the second month. The monthly Basic Rent for any partial month at
the beginning of the Term shall equal the product of 1 /365 of the annual Basic Rent in effect during
the partial month and the number of days in the partial month. Payments of Basic Rent for any
fractional calendar month at the end of the Term shall be similarly prorated. Tenant shall pay to
Landlord monthly installments of Additional Rent in advance on the first day of each calendar
month and otherwise on the same terms and conditions described above with respect to Basic Rent.
Unless a specific time period is specified in this Lease, all payments of miscellaneous Rent charges
hereunder (that is, all Rent other than Basic Rent and Additional Rent) shall be due and payable
within 30 days following Landlord's delivery to Tenant of an invoice therefor.
4.2 Additional Rent. (a) Tenant shall promptly pay all real estate taxes,
municipal assessments, water, sewer and utility charges, rent taxes, margin or franchise taxes, all
general and special assessments, levies, permits, inspection and license fees and other
governmental levies, together with any penalties, fines, or interest thereon (any of the foregoing
being referred to herein an "Imposition" or "Impositions") against the Premises, but shall not
include income, inheritance, estate, transfer, excise, gift or capital gain taxes that are or may be
payable by Landlord or that may be imposed against Landlord. The amount to be paid by Tenant
on account of taxes during the first and last calendar years in which any portion of the Term falls
shall be prorated per diem so that Tenant is liable only for so much of such taxes as the portion of
the Term which falls within such calendar year bears to a full calendar year. In case of special
taxes which may be payable in installments, only the amount of each installment payable during a
calendar year shall be included in taxes for that calendar year. Landlord shall provide to Tenant a
copy of all final tax bill(s) for each calendar year within ten (10) days after Landlord's receipt of
such tax bill(s), and in any event at least thirty (30) days before the same are due and payable.
Tenant may request the taxing authority to send duplicate copies of all tax bills and assessment
notices directly to Tenant so Tenant is able to have immediate notice of same. Landlord retains
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the right to contest any assessment or the payment of any Impositions in its sole and absolute
discretion.
(b) Tenant shall pay directly to the applicable third party all utilities and other
services necessary in the operation of the Premises, including but not be limited to, gas, fuel oil,
electrical, telephone and other utility charges, janitorial services (if Tenant shall contract for such
services) and grounds maintenance. Landlord shall not be responsible for providing any utilities
to the Premises and shall not be liable to Tenant in the event of any interruption, forfeiture, delay
or diminution of utilities or other service to the Premises.
(c) Tenant shall reimburse Landlord for the cost of its insurance premiums for
insurance required to be maintained pursuant to this Lease ("Landlord's insurance Costs")
within 30 days after receipt of written invoice from Landlord, provided Tenant's insurance
reimbursement shall not to exceed One Hundred Thousand and 00/100 Dollars ($100,000.00) per
year.
5. Delinquent Payment, Handling Charges. If any installment of Basic Rent or
Additional Rent is not paid when the same is due, the past due payments required of Tenant
hereunder shall bear interest from the date due until paid at the lesser of twelve percent (12%) per
annum or the maximum lawful rate of interest (such lesser amount is referred to herein as the
"Default Rate"). Tenant acknowledges that late payment by Tenant of any sum owed to Landlord
under this Lease (including, but not limited to any amount due as Rent hereunder) will cause
Landlord to incur costs not contemplated by this Lease, the exact amounts of which are extremely
difficult and impracticable to fix. Such costs include, without limitation, processing and accounting
charges, time spent addressing the issue with Tenant, and late charges that may be imposed on
Landlord by the terms of any obligation or note secured by any encumbrance covering the
Premises. Therefore, if any installment of Rent or any other payment from Tenant is not received
by Landlord within five days after it is due, Tenant shall pay to Landlord a late fee equal to the
greater of (a) five percent of the delinquent payment, or (b) $250 as a late charge, to reimburse
Landlord for its cost and inconvenience incurred as a consequence of Tenant's delinquency. In no
event, however, shall the charges permitted under this Section 5 or elsewhere in this Lease, to the
extent they are considered to be interest under applicable Law, exceed the maximum lawful
commercial rate of interest.
6. Security Deposit. Contemporaneously with the execution of this Lease, Tenant
shall pay to Landlord the Security Deposit, which shall be held by Landlord to secure Tenant's
performance of its obligations under this Lease. The Security Deposit is not an advance payment
of Rent or a measure or limit of Landlord's damages upon an Event of Default (as defined herein).
Landlord may, from time to time following an Event of Default and without prejudice to any other
remedy, use all or a part of the Security Deposit to perform any obligation Tenant fails to perform
hereunder. Following any such application of the Security Deposit, Tenant shall pay to Landlord
on demand the amount so applied in order to restore the Security Deposit to its original amount.
Provided that Tenant has performed all of its obligations hereunder, Landlord shall, within 60 days
after the expiration of the Term and Tenant's surrender of the Premises in compliance with the
provisions of this Lease, return to Tenant the portion of the Security Deposit which was not applied
to satisfy Tenant's obligations. Notwithstanding the preceding sentence and to the extent
permitted by applicable Law, Landlord may retain the Security Deposit until such time after the
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expiration of the Term that Landlord is able to reconcile and confirm all amounts payable by
Tenant under this Lease have been paid in full by Tenant. The Security Deposit may be
commingled with other funds, and no interest shall be paid thereon. If Landlord transfers its
interest in the Premises and the transferee assumes Landlord's obligations under this Lease, then
Landlord may assign the Security Deposit to the transferee and Landlord thereafter shall have no
further liability for the return of the Security Deposit. The rights and obligations of Landlord and
Tenant under this Section 6 are subject to any other requirements and conditions imposed by Laws
applicable to the Security Deposit.
Access By Landlord.
7.1 Right of Entry. Landlord and Landlord's agents shall have the right to enter
the Premises upon at least twenty-four (24) hours prior written notice (except in the event of
emergency) for any reasonable purpose (including, but not limited to, inspections and testing
requirements in connection with the future development of the Premises) upon reasonable advance
notice to Tenant. In excercising such right of entry, Landlord shall use reasonable efforts not to
disturb Tenant's business in the Premises.
8. Improvements; Alterations; Repairs; Maintenance.
8.1 Improvements; Alterations. Tenant shall make no
alterations, physical additions or improvements (collectively "Alterations") to the
Premises (including the installation of systems or other equipment or personal
property that affects or otherwise connects to the Building's Systems) without
Landlord's prior written consent, which shall not be unreasonably withheld or
delayed; provided, however, that Landlord may withhold its consent in its sole and
absolute discretion, to any Alteration that would cause a Material Alteration (as
defined below). Notwithstanding the foregoing, Tenant may make: (a) interior
cosmetic alterations and improvements such as painting, (b) interior non-structural
improvements or alterations at a cost not to exceed the aggregate sum of $25,000.00
in any calendar year, or (c) repair and replacement work required to be performed
by Tenant under this Lease (collectively, "Acceptable Changes') without
Landlord's consent, provided that (i) Tenant delivers to Landlord written notice of
such Acceptable Changes at least thirty (30) days prior to the commencement
thereof, (ii) such Acceptable Changes shall be performed by or on behalf of Tenant
in compliance with the provisions of this Section 8, (iii) such Acceptable Changes
do not constitute a Material Alteration and (iv) such Acceptable Changes shall be
performed by qualified contractors and subcontractors which normally and
regularly perform similar work in comparable buildings. All Alterations shall be
constructed, maintained, and used by Tenant, at its risk and expense, in accordance
with all applicable Laws and shall be diligently prosecuted to completion.
Landlord's consent to or approval of any Alterations (or the plans therefor) shall
not constitute a representation or warranty by Landlord, nor Landlord's acceptance,
that the same comply with sound architectural and/or engineering practices or with
all applicable Laws, and Tenant shall be solely responsible for ensuring all such
compliance. For purposes of this Lease, a "Material Alteration" shall be deemed
to exist if any portion of any Alterations: (1) affects the exterior appearance of the
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Building or the Premises or any area outside the Building; (2) adversely affects the
Building's Systems; (3) affects the Building's Structure; and/or (4) fails to comply
with any applicable Laws.
8.2 Repair and Maintenance by Tenant. Tenant shall maintain all portions
of the Premises (including, but not limited to, the Building's Structure and Building's Systems) in
a clean, safe, and operable condition, and shall not permit or allow to remain any waste or damage
to any portion of the Premises. Tenant shall repair or replace, subject to Landlord's direction and
supervision, any damage to any portion of the Premises caused by a Tenant Party, including any
damage caused by any of Tenant's contractors, consultants, workmen, mechanics or suppliers. If
(a) Tenant fails to commence to make such repairs or replacements within 30 days after the
occurrence of such damage and thereafter diligently pursue the completion thereof (or, in the case
of an emergency, such shorter period of time as is reasonable given the circumstances), or (b)
notwithstanding such diligence, Tenant fails to complete such repairs or replacements within
30 days after thb occurrence of such damage (or, in the case of an emergency, such shorter period
of time as is reasonable given the circumstances), then such failure shall constitute an Event of
Default and Landlord may make the same at Tenant's reasonable cost. In addition, Tenant shall
hold Landlord harmless from any Damage to the Premises, including, but not limited to the
Building's Structure and Building's Systems and against injury to any persons caused by Tenant's
actions pursuant to this Section 8.2. LANDLORD SHALL NOT BE REQUIRED TO MAKE
ANY REPAIR, WHETHER FORESEEN OR UNFORESEEN, OR TO MAINTAIN ANY OF
THE LEASED PREMISES OR ADJOINING PROPERTY IN ANY WAY, AND TENANT
HEREBY EXPRESSLY WAIVES THE RIGHT TO MAKE REPAIRS AT THE EXPENSE OF
THE LANDLORD, WHICH RIGHT MAY BE PROVIDED FOR IN ANY LAW NOW OR
HEREAFTER IN EFFECT.
8.3 Performance of Work. At Landlords election, all work described in this
Section 8 which require Landlord's consent shall be performed only by Tenant's contractors and
subcontractors approved in writing by Landlord and only in accordance with plans and
specifications approved by Landlord in writing. Tenant shall cause all contractors and
subcontractors to procure and maintain insurance coverage naming Landlord, Landlord's
Mortgagee, and, as applicable, Landlord's property management company and Landlord's asset
management company as additional insureds against such risks, in such amounts, and with such
companies as Landlord may reasonably require. Tenant shall provide Landlord with the identities,
mailing addresses and telephone numbers of all persons performing work or supplying materials
prior to beginning such construction and Landlord may post on and about the Premises notices of
non -responsibility pursuant to applicable Laws. All such work shall be performed in accordance
with all Laws and in a good and workmanlike manner so as not to damage the Building (including
the Premises, the Building's Structure and the Building's Systems) and shall use materials of a
quality that is at least equal to the quality then existing in the Building, and in such manner as to
cause a minimum of disruption to the other occupants of the Project and interference with other
construction in progress and with the transaction of business in the Project. Landlord may
designate reasonable rules, regulations and procedures for the performance of all such work in the
Building and shall have the right to designate the time when such work may be performed. All
such work which may affect the Building's Structure or the Building's Systems must be approved
by the Project's engineer of record, at Tenant's expense and, at Landlord's election, must be
performed by Landlord's usual contractor for such work. All work affecting the roof of the
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Building must be performed by a roofing contractor designated or otherwise approved by Landlord
and no such work will be permitted if it would void or reduce the warranty on the roof.
8.4 Mechanic's Liens. All work performed, materials furnished, or obligations
incurred by or at the request of a Tenant Party shall be deemed authorized and ordered by Tenant
only, and Tenant shall not permit any mechanic's or construction liens to be filed against the
Premises or the Project in connection therewith. Upon completion of any such work, Tenant shall
deliver to Landlord final unconditional lien waivers from all contractors, subcontractors and
materialmen who performed such work. If such a lien is filed, then Tenant shall, within thirty (30)
days after Landlord has delivered notice of the filing thereof to Tenant (or such earlier time period
as may be necessary to prevent the forfeiture of the Premises, the Project or any interest of
Landlord therein or the imposition of a civil or criminal fine with respect thereto), either (a) pay
the amount of the lien and cause the lien to be released of record, or (b) diligently contest such lien
and deliver to Landlord a bond or other security reasonably satisfactory to Landlord. If Tenant
fails to timely take either such action, then Landlord may pay the lien claim, and any amounts so
paid, including expenses and interest, shall be paid by Tenant to Landlord within ten days after
Landlord has invoiced Tenant therefor. Landlord and Tenant acknowledge and agree that their
relationship is and shall be solely that of "landlord -tenant" (thereby excluding a relationship of
"owner -contractor," "owner -agent" or other similar relationships) and that Tenant is not authorized
to act as Landlord's common law agent or construction agent in connection with any work
performed in the Premises. Accordingly, all materialmen, contractors, artisans, mechanics,
laborers and any other persons now or hereafter contracting with Tenant, any contractor or
subcontractor of Tenant or any other Tenant Party for the furnishing of any labor, services,
materials, supplies or equipment with respect to any portion of the Premises, at any time from the
date hereof until the end of the Term, are hereby charged with notice that they look exclusively to
Tenant to obtain payment for same. Nothing herein shall be deemed a consent by Landlord to any
liens being placed upon the Premises, the Project or Landlord's interest therein due to any work
performed by or for Tenant or deemed to give any contractor or subcontractor or materialman any
right or interest in any funds held by Landlord to reimburse Tenant for any portion of the cost of
such work. Tenant shall hold harmless Landlord and its agents and representatives from and
against all claims, demands, causes of action, suits, judgments, damages and expenses (including
attorneys' fees) in any way arising from or relating to the failure by any Tenant Party to pay for
any work performed, materials furnished, or obligations incurred by or at the request of a Tenant
Party. This provision shall survive termination or expiration of this Lease.
9. Use. Tenant shall occupy and use the Premises only for the Permitted Use,
consistent with Tenant's existing use of the Premises and shall comply with all Laws relating to
the use, condition, access to, and occupancy of the Premises and will not commit waste, overload
the Building's Structure or the Building's Systems or subject the Premises to use that would
damage the Premises. Tenant shall bear the risk of and be responsible for at its own cost and
expense compliance with Title III of the Americans With Disabilities Act of 1990, any state laws
governing handicapped access or architectural barriers, and all rules, regulations, and guidelines
promulgated under such laws, as amended from time to time (the "Disabilities Acts") in the
Premises. The Premises shall not be used for any use which creates extraordinary fire hazards, or
results in an increased rate of insurance on the Project or its contents, or for the storage of any
Hazardous Materials (other than de minimis quantities used in compliance with all Laws and in a
reasonable and prudent manner). If, because of a Tenant Party's acts or omissions, the rate of
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insurance on the Building or its contents increases in excess of Tenant's insurance reimbursement
to Landlord, then Tenant shall pay to Landlord the amount of such increase on demand, and
acceptance of such payment shall not waive any of Landlord's other rights. Tenant shall conduct
its business and control each other Tenant Party so as not to create any nuisance.
10. Assignment and Subletting.
10.1 Transfers. Tenant shall not, without the prior written consent of Landlord,
(a) assign, transfer, pledge or encumber this Lease or any estate or interest herein, whether directly
or by operation of law, (b) permit any other entity to become Tenant hereunder by merger,
consolidation, or other reorganization, (c) permit the transfer of an ownership interest in Tenant so
as to result in a change in the current direct or indirect control of Tenant, (d) sublet any portion of
the Premises, (e) grant any license, concession, or other right of occupancy of any portion of the
Premises, (f) permit the use of the Premises by any parties other than Tenant, or (g) sell or
otherwise transfer, in one or more transactions, a majority of Tenant's assets (any of the events
listed in Section 10.1 through 10.1 being a "Transfer").
10.2 Consent Standards. Landlord may withhold its consent in its sole
discretion to any proposed Transfer. Any Transfer made without Landlord's consent shall be
voidable by Landlord in its sole discretion.
10.3 Request for Consent. If Tenant requests Landlord's consent to a Transfer,
then, at least thirty (30) business days prior to the effective date of the proposed Transfer, Tenant
shall provide Landlord with a written description of all terms and conditions of the proposed
Transfer, copies of the proposed documentation, and the following information about the proposed
transferee: name and address of the proposed transferee and any entities and persons who own,
control or direct the proposed transferee; reasonably satisfactory information about its business
and business history; its proposed use of the Premises; banking, financial, and other credit
information; and general references sufficient to enable Landlord to determine the proposed
transferee's creditworthiness and character. Concurrently with Tenant's notice of any request for
consent to a Transfer, Tenant shall pay to Landlord a fee of $2,500 to defray Landlord's expenses
in reviewing such request, and Tenant shall also reimburse Landlord immediately upon request for
its reasonable attorneys' fees and other expenses incurred in connection with considering any
request for consent to a Transfer.
10.4 Conditions to Consent. If Landlord consents to a proposed Transfer, then
the proposed transferee shall deliver to Landlord a written agreement whereby it expressly assumes
Tenant's obligations hereunder; however, any transferee of less than all of the space in the
Premises shall be liable only for obligations under this Lease that are properly allocable to the
space subject to the Transfer for the period of the Transfer. Unless otherwise approved by
Landlord, no Transfer shall release Tenant from its obligations under this Lease, but rather Tenant
and its transferee shall be jointly and severally liable therefor. Landlord's consent to any Transfer
shall not waive Landlord's rights as to any subsequent Transfers and no subtenant of any portion
of the Premises shall be permitted to further sublease any portion of its subleased space. If an
Event of Default occurs while the Premises or any part thereof are subject to a Transfer, then
Landlord, in addition to its other remedies, may collect directly from such transferee all rents
becoming due to Tenant and apply such rents against Rent. Tenant authorizes its transferees to
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make payments of rent directly to Landlord upon receipt of notice from Landlord to do so
following the occurrence of an Event of Default hereunder. Tenant shall pay for the cost of any
demising walls or other improvements necessitated by a proposed subletting or assignment.
10.5 Attornment by Subtenants. Any sublease by Tenant hereunder shall be
subject and subordinate to this Lease and to the matters to which this Lease is or shall be
subordinate, and each subtenant by entering into a sublease is deemed to have agreed that in the
event of termination, re-entry or dispossession by Landlord under this Lease, Landlord may, at its
option, take over all of the right, title and interest of Tenant, as sublandlord, under such sublease,
and such subtenant shall, at Landlord's option, attorn to Landlord pursuant to the then executory
provisions of such sublease, except that Landlord shall not be (a) liable for any previous act or
omission of Tenant under such sublease, (b) subject to any counterclaim, offset or defense that
such subtenant might have against Tenant, (c) bound by any previous modification of such
sublease not approved by Landlord in writing or by any rent or additional rent or advance rent
which such subtenant might have paid for more than the current month to Tenant, and all such rent
shall remain due and owing, notwithstanding such advance payment, (d) bound by any security or
advance rental deposit made by such subtenant which is not delivered or paid over to Landlord
and with respect to which such subtenant shall look solely to Tenant for refund or reimbursement,
or (e) obligated to perform any work in the subleased space or to prepare it for occupancy, and in
connection with such attornment, the subtenant shall execute and deliver to Landlord any
instruments Landlord may reasonably request to evidence and confirm such attornment. Each
subtenant or licensee of Tenant shall be deemed, automatically upon and as a condition of its
occupying or using the Premises or any part thereof, to have agreed to be bound by the terms and
conditions set forth in this Section 10.5. The provisions of this Section 10.5 shall be self -operative,
and no further instrument shall be required to give effect to this provision.
10.6 Cancellation. Landlord may, within 30 days after submission of Tenant's
written request for Landlord's consent to an assignment or subletting, cancel this Lease as to the
portion of the Premises proposed to be sublet or assigned as of the date the proposed Transfer is
to be effective. If Landlord cancels this Lease as to any portion of the Premises, then this Lease
shall cease for such portion of the Premises and Tenant shall pay to Landlord all Rent accrued
through the cancellation date relating to the portion of the Premises covered by the proposed
Transfer. Thereafter, Landlord may lease such portion ofthe Premises to the prospective transferee
(or to any other person) without liability to Tenant.
10.7 Additional CornRensation. Tenant shall pay to Landlord, immediately
upon receipt thereof, all compensation in excess of the existing Rent payable hereunder which is
received by Tenant for a Transfer less the actual out-of-pocket costs reasonably incurred by Tenant
with unaffiliated third parties (i.e., brokerage commissions and tenant finish work) in connection
with such Transfer (such costs shall be amortized on a straight-line basis over the term of the
Transfer in question).
11. Insurance; Waivers; Subrogation; Indemnity.
11.1 Tenant's Insurance. Tenant is a governmental entity under the laws of the
state of Texas and pursuant to Chapter 2259 of the Texas Government Code, entitled "Self -
Insurance by Governmental Units," is self -insured and therefore is not required to purchase
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insurance. Landlord agrees that Tenant shall be allowed to retain (self -insure) in whole or in part
any insurance obligations required herein.
11.2 Landlord's Insurance. Throughout the Term of this Lease,
Landlord shall maintain, as a minimum, the following insurance policies ("Landlord's
Insurance"): (a) property insurance for the Building's replacement value (excluding
property required to be insured by Tenant pursuant to Section 11.1), less a commercially -
reasonable deductible if Landlord so chooses, and (b) commercial general liability
insurance in an amount of not less than $1,000,000 per occurance and $2,000,000 in
aggregate. Landlord may, but is not obligated to, maintain such other insurance and
additional coverages as it may deem necessary, including any insurance reasonably
required by Landlord's Mortgagee. The foregoing insurance policies and any other
insurance carried by Landlord shall be for the sole benefit of Landlord and under
Landlord's sole control, and Tenant shall have no right or claim to any proceeds thereof or
any other rights thereunder. Notwithstanding anything in this Lease to the contrary,
Landlord's indemnity obligations under this Lease shall be limited to the extent any such
claim is insured against under the terms of any insurance policy maintained by Landlord
(or is required to be maintained by Landlord under the terms of this Lease).
11.3 No Subrogation; Waiver of Property Claims. Landlord and Tenant each
waives any claim it might have against the other for any damage to or theft, destruction, loss, or
loss of use of any property, to the extent the same is insured against under any insurance policy of
the types described in this Section 11 that covers the Project, the Premises, Landlord's or Tenant's
fixtures, personal property, leasehold improvements, or business, or is required to be insured
against under the terms hereof, REGARDLESS OF WHETHER THE NEGLIGENCE OF
THE OTHER PARTY CAUSED SUCH LOSS (DEFINED BELOW). Additionally, Tenant
waives any claim it may have against Landlord for any Loss to the extent such Loss is caused by
a terrorist act. Each party shall cause its insurance carrier to endorse all applicable policies waiving
the carrier's rights of recovery under subrogation or otherwise against the other party.
Notwithstanding any provision in this Lease to the contrary, Landlord, its agents, employees and
contractors shall not be liable to Tenant or to any party claiming by, through or under Tenant for
(and Tenant hereby releases Landlord and its servants, agents, contractors, employees and invitees
from any claim or responsibility for) any damage to or destruction, loss, or loss of use, or theft of
any property of any Tenant Party located in or about the Project, caused by casualty, theft, fire,
third parties or any other matter or cause, REGARDLESS OF WHETHER THE
NEGLIGENCE OF ANY PARTY CAUSED SUCH LOSS IN WHOLE OR IN PART.
Tenant acknowledges that Landlord shall not carry insurance on, and shall not be responsible for
damage to, any property of any Tenant Party located in or about the Project.
12. Subordination; Attornment; Notice to Landlord's Mortgagee.
12.1 Subordination. This Lease and all of Tenant's rights hereunder shall be
subordinate at all times to any deed of trust, mortgage, or other security instrument (each, a
"Mortgage") that now or hereafter covers all or any part of the Premises (the mortgagee under
any such Mortgage or beneficiary under any such deed of trust is referred to herein as a
"Landlord's Mortgagee_ '), provided, however, as a condition to such subordination, Landlord's
Mortgagee shall agree that Tenant's rights under this Lease shall not be disturbed so long as Tenant
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is not in default hereunder. Any Landlord's Mortgagee may elect, at any time, unilaterally, to
make this Lease superior to its Mortgage by so notifying Tenant in writing. The provisions of this
Section shall be self -operative and no further instrument of subordination shall be required;
however, in confirmation of such subordination, Tenant shall execute and return to Landlord (or
such other party designated by Landlord) within ten days after written request therefor such
documentation, in recordable form if required, as a Landlord's Mortgagee may reasonably request
to evidence the subordination of this Lease to such Landlord's Mortgagee's Mortgage (including
a subordination, non -disturbance and attornment agreement) or, if the Landlord's Mortgagee so
elects, the subordination of such Landlord's Mortgagee's Mortgage to this Lease, provided,
however, in either instance, Landlord's Mortgagee shall agree that Tenant's rights under this Lease
shall not be disturbed so long as Tenant is not in default hereunder.
12.2 Attornment. Tenant shall attorn to any party succeeding to Landlord's
interest in the Premises, whether by purchase, foreclosure, deed in lieu of foreclosure, power of
sale, termination of lease, or otherwise, upon such party's request, and shall execute such
agreements confirming such attornment as such party may reasonably request.
12.3 Notice to Landlord's MortgaZee. Tenant shall not seek to enforce any
remedy it may have for any default on the part of Landlord without first giving written notice by
certified mail, return receipt requested, specifying the default in reasonable detail, to any
Landlord's Mortgagee whose address has been given to Tenant, and affording such Landlord's
Mortgagee a reasonable opportunity to perform Landlord's obligations hereunder.
12.4 Landlord's Mortgagee's Protection Provisions, If Landlord's Mortgagee
shall succeed to the interest of Landlord under this Lease, Landlord's Mortgagee shall not be: (a)
liable for any act or omission of any prior lessor (including Landlord); (b) bound by any rent or
additional rent or advance rent which Tenant might have paid for more than the current month to
any prior lessor (including Landlord), and all such rent shall remain due and owing,
notwithstanding such advance payment; (c) bound by any security or advance rental deposit made
by Tenant which is not delivered or paid over to Landlord's Mortgagee and with respect to which
Tenant shall look solely to Landlord for refund or reimbursement; (d) bound by any termination,
amendment or modification of this Lease made without Landlord's Mortgagee's consent and
written approval, except for those terminations, amendments and modifications permitted to be
made by Landlord without Landlord's Mortgagee's consent pursuant to the terms of the loan
documents between Landlord and Landlord's Mortgagee; (e) subject to the defenses which Tenant
might have against any prior lessor (including Landlord); and (f) subject to the offsets which
Tenant might have against any prior lessor (including Landlord) except for those offset rights
which (1) are expressly provided in this Lease, (2) relate to periods of time following the
acquisition of the Building by Landlord's Mortgagee, and (3) Tenant has provided written notice
to Landlord's Mortgagee and provided Landlord's Mortgagee a reasonable opportunity to cure the
event giving rise to such offset event. Landlord's Mortgagee shall have no liability or
responsibility under or pursuant to the terms of this Lease or otherwise after it ceases to own fee
simple title to the Project. Nothing in this Lease shall be construed to require Landlord's
Mortgagee to see to the application of the proceeds of any loan, and Tenant's agreements set forth
herein shall not be impaired on account of any modification of the documents evidencing and
securing any loan.
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13. Reserved.
14. Condemnation.
14.1 Total Taking. If the entire Building or Premises are taken by right of
eminent domain or conveyed in lieu thereof (a "Takin "), this Lease shall terminate as of the date
of the Taking.
14.2 Partial Taking - Tenant's Rights. If any part of the Building becomes
subject to a Taking and such Taking will prevent Tenant from conducting on a permanent basis its
business in the Premises in a manner reasonably comparable to that conducted immediately before
such Taking, then Tenant may terminate this Lease as of the date of such Taking by giving written
notice to Landlord within 30 days after the Taking, and Basic Rent and Additional Rent shall be
apportioned as of the date of such Taking. If Tenant does not terminate this Lease, then Basic
Rent and Additional Rent shall be abated on a reasonable basis as to that portion of the Premises
rendered untenantable by the Taking.
14.3 Partial Taking - Landlord's Rights. If any material portion, but less than
all, of the Building or Project becomes subject to a Taking, or if Landlord is required to pay any
of the proceeds arising from a Taking to a Landlord's Mortgagee, then Landlord may terminate
this Lease by delivering written notice thereof to Tenant within 30 days after such Taking, and
Basic Rent and Additional Rent shall be apportioned as of the date of such Taking. If Landlord
does not so terminate this Lease, then this Lease will continue, but if any portion of the Premises
has been taken, Basic Rent and Additional Rent shall abate as provided in the last sentence of
Section 14.2.
14.4 Award. If any Taking occurs, then Landlord shall receive the entire award
or other compensation for the Project and other improvements taken; however, Tenant may
separately pursue a claim (to the extent it will not reduce Landlord's award) against the condemnor
for the value of Tenant's personal property which Tenant is entitled to remove under this Lease,
moving costs and loss of business.
15. Fire or Other Casualty.
15.1 Repair Estimate. If the Premises or the Project are damaged by fire, flood,
earthquake or other casualty (a "Casual ), Landlord shall, within 30 days after such Casualty,
deliver to Tenant a good faith estimate (the "Damage Notice") of the time needed to substantially
repair the damage caused by such Casualty.
15.2 Tenant's Rights. If the Premises are damaged by Casualty such that Tenant
is prevented from conducting its business in the Premises in a manner reasonably comparable to
that conducted immediately before such Casualty and Landlord estimates that the damage caused
thereby for which Landlord is responsible to repair under this Lease pursuant to Section 15.4 below
cannot be repaired within the earlier to occur of (i) the expiration of the Term, or (ii) 60 days after
the commencement of repairs (the "Repair Period"), and such Casualty is not result of the gross
negligence or willful misconduct or omission of Tenant or Tenant Parties, then Tenant may
terminate this Lease by delivering written notice to Landlord of its election to terminate within
30 days after the Damage Notice has been delivered to Tenant.
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15.3 Landlord's Rights. If a Casualty occurs and (a) Landlord estimates that
the damage cannot be repaired within the Repair Period, and/or (b) the damage exceeds 10% of
the replacement cost thereof (excluding foundations and footings), as estimated by Landlord, then
Landlord may terminate this Lease by giving written notice of its election to terminate within
30 days after the Damage Notice has been delivered to Tenant.
15.4 Repair Obligation. If neither party elects to terminate this Lease following
a Casualty, then Landlord shall, within a reasonable time after such Casualty, begin to repair the
Premises and shall proceed with reasonable diligence to restore the Premises to substantially the
same condition as they existed immediately before such Casualty; however, Landlord shall not be
required to repair or replace any improvements, alterations or betterments within the Premises
(which shall be promptly and with due diligence repaired and restored by Tenant at Tenant's sole
cost and expense) or any furniture, equipment, trade fixtures or personal property of Tenant or
others in the Premises or the Project, and Landlord's obligation to repair or restore the Premises
shall be limited to the extent of the insurance proceeds actually received by Landlord for the
Casualty in question. If this Lease is terminated under the provisions of this Section 15, Landlord
shall be entitled to the full proceeds of the insurance policies providing coverage for all alterations,
improvements and betterments in the Premises (and, if Tenant has failed to maintain insurance on
such items as required by this Lease, Tenant shall pay Landlord an amount equal to the proceeds
Landlord would have received had Tenant maintained insurance on such items as required by this
Lease).
15.5 Abatement of Rent. If the Premises are damaged by Casualty, Basic Rent
and Additional Rent for the portion of the Premises rendered untenantable by the damage shall be
abated on a reasonable basis from the date of damage until the earlier of (a) completion of
Landlord's repairs, (b) the date upon which completion of Landlord's repairs would have occurred
but for delays caused by Tenant Parties, or (c) the date of termination of this Lease by Landlord or
Tenant as provided above, as the case may be, unless a Tenant Party caused such damage, in which
case, Tenant shall continue to pay Basic Rent and Additional Rent without abatement.
16. Personal Property Taxes. Tenant shall be liable for, and shall pay prior to
delinquency, all taxes levied or assessed against personal property, furniture, fixtures, betterments,
improvements, and alterations now existing or hereafter placed by any Tenant Party in the
Premises or in or on the Building or Project. If any taxes for which Tenant is liable are, (a) levied
or assessed against Landlord or Landlord's property and Landlord elects to pay the same, or (b) if
the assessed value of Landlord's property is increased by inclusion of such personal property,
furniture, fixtures, betterments, improvements, and Alterations and Landlord elects to pay the taxes
based on such increase, then Tenant shall pay to Landlord, immediately upon Landlord's demand
therefore, the part of such taxes for which Tenant is primarily liable hereunder; however, Landlord
shall not pay such amount if Tenant notifies Landlord that it will contest the validity or amount of
such taxes before Landlord makes such payment, and thereafter diligently proceeds with such
contest in accordance with Law and if the non-payment thereof does not pose a threat of loss or
seizure of the Project or interest of Landlord therein or impose any fee or penalty against Landlord.
17. Events of Default. Each of the following occurrences shall be an "Event of
Default":
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17.1 Payment Default. Tenant's failure to pay Rent or any other payment or
reimbursement to Landlord when due, and only in the case of the first such failure during the Term,
if such payment is not made within five (5) days after Landlord has delivered written notice to
Tenant that the same is due;
17.2 Abandonment. Tenant abandons the Premises;
17.3 Estoppel: Subordination; Financial Reports. Tenant fails to provide any
estoppel certificate, documentation regarding the subordination of this Lease or financial reports
after Landlord's written request therefor pursuant to Section 25.5 and Section 12.1, respectively,
and such failure shall continue for ten (10) days after Landlord's written notice thereof to Tenant;
17.4 Intentionally Omitted.
17.5 Mechanic's Liens. Tenant fails to pay and release of record, or diligently
contest and bond around, any mechanic's or construction lien filed against the Premises or the
Project for any work performed, materials furnished, or obligation incurred by or at the request of
a Tenant Party, within the time and in the manner required by Section 8.4;
17.6 Other Defaults. Tenant's failure to perform, comply with, or observe any
term, condition, covenant, agreement or obligation of Tenant under this Lease other than provided
in this Section 17 and the continuance of such failure for a period of more than thirty (30) days
after Landlord has delivered to Tenant written notice thereof (or if such failure cannot reasonably
be cured within such 30-day period, such 30-day period shall be extended for such longer period
of time as is reasonably necessary to cure such failure, so long as Tenant commences such cure
within the 30-day period and thereafter continuously prosecutes the same with diligence to
completion, but in no event more than an additional sixty (60) days);
17.7 Insolvency. The filing of a petition by or against Tenant (the term "Tenant"
shall include, for the purpose of this Section 17.7, any guarantor of Tenant's obligations hereunder)
(a) in any bankruptcy or other insolvency proceeding; (b) seeking any relief under any state or
federal debtor relief law; (c) for the appointment of a liquidator or receiver for all or substantially
all of Tenant's property or for Tenant's interest in this Lease; (d) for the reorganization or
modification of Tenant's capital structure; or (e) in any assignment for the benefit of creditors
proceeding; however, if such a petition is filed against Tenant, then' such filing shall not be an
Event of Default unless Tenant fails to have the proceedings initiated by such petition dismissed
within 90 days after the filing thereof, and
17.8 Assignment or Subletting without Consent. Any Transfer for which the
prior consent of Landlord is required under this Lease and has not been obtained.
18. Remedies. Upon any Event of Default, Landlord may, in addition to all other rights
and remedies afforded Landlord hereunder or by law or equity, take any one or more of the
following actions:
18.1 Termination of Lease. Terminate this Lease by giving Tenant written
notice thereof, in which event Tenant shall pay to Landlord all amounts required to be paid by
Tenant pursuant to Sectoon 19.1 below.
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18.2 Termination of Possession. Terminate Tenant's right to possess the
Premises without terminating this Lease by giving written notice thereof to Tenant, in which event
Tenant shall pay to Landlord all amounts required to be paid by Tenant pursuant to Sectoin 19.1
below.
18.3 Perform Acts on Behalf of Tenant. Perform any act Tenant is obligated
to perform under the terms of this Lease (and enter upon the Premises in connection therewith if
necessary) in Tenant's name and on Tenant's behalf, without being liable for any claim for
damages therefor, and Tenant shall reimburse Landlord on demand for any expenses which
Landlord may incur in thus effecting compliance with Tenant's obligations under this Lease
(including, but not limited to, collection costs and legal expenses), plus interest thereon at the
Default Rate.
18.4 Alteration of Locks. Additionally, with or without notice, and to the extent
permitted by Law, Landlord may alter locks or other security devices at the Premises to deprive
Tenant of access thereto, and Landlord shall not be required to provide a new key or right of access
to Tenant unless and until Tenant has paid to Landlord all amounts required to be paid by Tenant
hereunder.
19. Non -Waiver; Cumulative Remedies; Mitigation of Damage.
19.1 Payment by Tenant. Upon any Event of Default, Tenant shall pay to
Landlord all amounts, costs, losses and/or expenses incurred, abated or foregone by Landlord
(including court costs and reasonable attorneys' fees and expenses) in (a) obtaining possession of
the Premises, (b) removing, storing and/or disposing of Tenant's or any other occupant's property,
(c) performing Tenant's obligations under this Lease which Tenant failed to perform, (d)
enforcing, or advising Landlord of, its rights, remedies, and recourses arising out of the default,
and (e) if Landlord exercises its right to terminate this Lease or to terminate Tenant's right to
possess the Premises without terminating this Lease, an amount (to the extent not otherwise paid
by Tenant) equal to the sum of (i) the Basic Rent, (ii) the Impositions, and (ii) Landlord's Insurance
Costs accrued through the date of such termination and that would have otherwise been payable
under the terms of this Lease for the remainder of the Term of this Lease following such
termination.
19.2 No Waiver. Landlord's acceptance of Rent following an Event of Default
shall not waive Landlord's rights regarding such Event of Default. No waiver by Landlord of any
violation or breach of any of the terms contained herein shall waive Landlord's rights regarding
any future violation of such term. Landlord's acceptance of any partial payment of Rent shall not
waive Landlord's rights with regard to the remaining portion of the Rent that is due, regardless of
any endorsement or other statement on any instrument delivered in payment of Rent or any writing
delivered in connection therewith; accordingly, Landlord's acceptance of a partial payment of Rent
shall not constitute an accord and satisfaction of the full amount of the Rent that is due.
19.3 Cumulative Remedies. Any and all remedies set forth in this Lease: (a)
shall be in addition to any and all other remedies Landlord may have at law or in equity, (b) shall
be cumulative, and (c) may be pursued successively or concurrently as Landlord may elect. The
exercise of any remedy by Landlord shall not be deemed an election of remedies or preclude
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Landlord from exercising any other remedies in the future. Additionally, Tenant shall hold
harmless Landlord, Landlord's Mortgagee and their respective representatives and agents from
and against all claims, demands, liabilities, causes of action, suits, judgments, damages and
expenses (including reasonable attorneys' fees) arising from Tenant's failure to perform its
obligations under this Lease.
19.4 Mitigation of Damage. The parties agree any duty imposed by Law on
Landlord to mitigate damages after a default by Tenant under this Lease shall be satisfied in full if
Landlord uses reasonable efforts to lease the Premises to another tenant (a "Substitute Tenant")
in accordance with the following criteria: (a) Landlord shall have no obligation to solicit or
entertain negotiations with any Substitute Tenant for the Premises until 30 days following the date
upon which Landlord obtains full and complete possession of the Premises, including the
relinquishment by Tenant of any claim to possession of the Premises by written notice from Tenant
to Landlord; (b) Landlord shall not be obligated to lease the Premises to a Substitute Tenant for
less than the current fair market value of the Premises, as determined by Landlord in its sole
discretion, nor will Landlord be obligated to enter into a new lease for the Premises under other
terms and conditions that are not commercially reasonable; (c) Landlord shall not be obligated to
enter into a lease with a Substitute Tenant: (1) whose use would violate any restriction, covenant
or requirement contained in the lease of another tenant in the Project, if any; (2) whose use would
require any addition to or modification of the Premises or Project in order to comply with
applicable Law, including building codes; (3) who does not have, in Landlord's commercially
reasonable opinion, the creditworthiness to be an acceptable tenant; (4) would have a lease with a
term that extends beyond the term of this Lease or (5) that does not meet Landlord's reasonable
standards for tenants of the Premises; and (d) Landlord shall not be required to expend any amount
of money to alter, remodel or otherwise make the Premises suitable for use by a Substitute Tenant
unless Landlord, in Landlord's sole discretion, determines any such expenditure is financially
prudent in connection with entering into a lease with the "Substitute Tenant.
20. Intentionally Omitted.
21. Surrender of Premises. No act by Landlord shall be deemed an acceptance of a
surrender of the Premises, and no agreement to accept a surrender of the Premises shall be valid
unless it is in writing and signed by Landlord. Prior to the expiration or termination of this Lease
or Tenant's right to possess the Premises, Tenant shall (a) deliver to Landlord the Premises broom -
clean with all improvements located therein in good repair and condition (except for condemnation
and Casualty damage not caused by Tenant, as to which Sections 14 and 15 shall control), free of
all trash and rubbish, free from all tenancies or occupancies by any person and free of any liens or
encumbrances and free of Hazardous Materials placed on the Premises during the Term; (b) deliver
to Landlord all keys to the Premises and all access cards to the Project; and remove all Excluded
Property (as defined in the Purchase and Sale Agreement). Tenant shall repair all damage caused
by the removal of the Excluded Property. If Tenant fails to remove any of the Excluded Property,
Landlord may, at Landlord's option, (1) deem such items to have been abandoned by Tenant, the
title thereof shall immediately pass to Landlord at no cost to Landlord, and such items may be
appropriated, sold, stored, destroyed, or otherwise disposed of by Landlord without notice to
Tenant and without any obligation to account for such items; any such disposition shall not be
considered a strict foreclosure or other exercise of Landlord's rights in respect of the security
interest granted hereunder or otherwise, (2) remove such items, or (3) elect any of the actions
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described in clauses (1) and (2) above as Landlord may elect in its sole discretion. The provisions
of this Section 21 shall survive the end of the Term.
22. Holding Over. If Tenant fails to vacate and surender the Premises at the end of
the Term, then Tenant shall be a tenant at sufferance and, in addition to all other damages and
remedies to which Landlord may be entitled for such holding over, (a) Tenant shall pay, in addition
to the other Rent, Basic Rent equal to two hundred percent (200%) of the Rent payable during the
last month of the Term, and (b) Tenant shall otherwise continue to be subject to all of Tenant's
obligations under this Lease. The provisions of this Section 22 shall not be deemed to limit or
constitute a waiver of any other rights or remedies of Landlord provided herein or at law. If
Tenant fails to surrender the Premises upon the termination or expiration of this Lease, in addition
to any other liabilities to Landlord accruing therefrom, Tenant shall hold Landlord harmless from
all loss, claims, demands, liabilities, damages (including without limitation, any lost profits or
consequential damages) costs and/or expenses (including reasonable attorneys' fees) resulting
from such failure by Tenant to surrender the Premises in the manner and condition required by this
Lease upon the expiration of the Term or earlier termination of this Lease, including any claims
made by any succeeding tenant founded upon such failure to surrender.
23. Certain Riehts Reserved by Landlord. Landlord shall have the following rights:
23.1 Prospective Purchasers and Lenders. Upon reasonable prior written
notice to Tenant, to enter the Premises at all reasonable hours to show the Premises to prospective
purchasers or lenders; and
23.2 Prospective Tenants. At any time during the Term (or earlier if Tenant has
notified Landlord in writing that it does not desire to renew the Term) upon reasonable prior written
notice to Tenant, to enter the Premises at all reasonable hours to show the Premises to prospective
tenants. In exercising the foregoing rights in this Section 23, Landlord shall use commercially
reasonable efforts not to interfere with Tenant's occupancy of the Premises.
24. Reserved.
25. Miscellaneous.
25.1 Landlord Transfer. In the event of any sale or transfer of the Project (and
provided that any unapplied portion of the Security Deposit held by the seller, transferor or
assignor (collectively, "Seller") is delivered or credited to the purchaser, transferee or assignee
(collectively, "Purchaser")), and such Purchaser expressly assumes Landlord's obligation
hereunder, the Seller shall be and hereby is entirely freed and relieved of all agreements, covenants
and obligations of Landlord thereafter to be performed and it shall be deemed and construed
without further agreement between the parties or their successors in interest or between the Seller
and the Purchaser on any such sale, transfer or assignment that such Purchaser has assumed and
agreed to carry out any and all agreements, covenants and obligations of Landlord thereafter to be
performed under this Lease.
25.2 Landlord's Liability. Notwithstanding anything to the contrary contained
in the Purchase Agreement, or in any exhibits, riders or addenda hereto attached, it is expressly
understood and agreed that the liability of Landlord (and its successors, partners, shareholders or
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members) to Tenant (or any person or entity claiming by, through or under Tenant) for any default
by Landlord under the terms of this Lease or any matter relating to or arising out of the occupancy
or use of the Premises and/or other areas of the Building shall be limited to Tenant's actual direct,
but not consequential, damages therefor and shall be recoverable only from and to the exent of the
interest of Landlord in the Building, and Landlord (and its partners, shareholders or members)
shall not be personally liable for any deficiency and shall have no personal liability or personal
responsibility of any sort with respect to the foregoing. Landlord shall not be responsible or liable
to Tenant for any losts profits, lost ecomomic opportunites or any form of consequential damages
as a result of any actual or alleged breach or default by Landlord under the Lease. The provisions
of this Section shall survive any expiration or termination of this Lease.
25.3 Force Majeure. Other than for Tenant's obligations under this Lease that
can be performed by the payment of money (e.g., payment of Rent and maintenance of insurance),
whenever a period of time is herein prescribed for action to be taken by either party hereto, such
party shall not be liable or responsible for, and there shall be excluded from the computation of
any such period of time, any delays due to strikes, riots, acts of God, shortages of labor or materials,
war, terrorist acts or activities, governmental laws, regulations, or restrictions, or any other causes
of any kind whatsoever which are beyond the control of such party. In no event shall Force
Majeure (i) be grounds for Tenant to abate any portion of Rent due pursuant to this Lease, or (ii)
extend the time period for Tenant to vacate and surrender the Premises to Landlord following the
expiration or termination of this Lease or (iii) extend the Term.
25.4 Brokerage. Neither Landlord nor Tenant has dealt with any broker or agent
in connection with the negotiation or execution of this Lease.
25.5 Estoppel Certificates. From time to time, Tenant shall furnish to any party
designated by Landlord, within ten days after Landlord has made a request therefor, a certificate
signed by Tenant confirming and containing such factual certifications and representations as to
this Lease as Landlord may reasonably request. Unless otherwise required by Landlord's
Mortgagee or a prospective purchaser or mortgagee of the Project, the initial form of estoppel
certificate to be signed by Tenant is attached hereto as Exhibit B. If Tenant does not deliver to
Landlord the certificate signed by Tenant within such required time period, Landlord, Landlord's
Mortgagee and any prospective purchaser or mortgagee, may conclusively presume and rely upon
the following facts: (a) this Lease is in full force and effect; (b) the terms and provisions of this
Lease have not been changed except as otherwise represented by Landlord; (c) not more than one
monthly installment of Basic Rent and other charges have been paid in advance; (d) there are no
claims against Landlord nor any defenses or rights of offset against collection of Rent or other
charges; and (e) Landlord is not in default under this Lease. In such event, Tenant shall be estopped
from denying the truth of the presumed facts.
25.6 Notices. All notices and other communications given pursuant to this Lease
shall be in writing and shall be (a) mailed by first class, United States Mail, postage prepaid,
certified, with return receipt requested, and addressed to the parties hereto at the address specified
in the Basic Lease Information, (b) hand -delivered to the intended addressee, or (c) sent by a
nationally recognized overnight courier service. All notices shall be effective upon delivery to the
address of the addressee (even if such addressee refuses delivery thereof). The parties hereto may
change their addresses by giving notice thereof to the other in conformity with this provision.
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25.7 Separability. If any clause or provision of this Lease is illegal, invalid, or
unenforceable under present or future laws, then the remainder of this Lease shall not be affected
thereby and in lieu of such clause or provision, there shall be added as a part of this Lease a clause
or provision as similar in terms to such illegal, invalid, or unenforceable clause or provision as
may be possible and be legal, valid, and enforceable.
25.8 Amendments, Binding Effect, No Electronic Records. This Lease may
not be amended except by instrument in writing signed by Landlord and Tenant. No provision of
this Lease shall be deemed to have been waived by Landlord unless such waiver is in writing
signed by Landlord, and no custom or practice which may evolve between the parties in the
administration of the terms hereof shall waive or diminish the right of Landlord to insist upon the
performance by Tenant in strict accordance with the terms hereof. Landlord and Tenant hereby
agree not to conduct the transactions or communications contemplated by this Lease by electronic
means, except by facsimile transmission as specifically set forth in Section 25.6 or electronic
signatures as specifically set forth in Section 25.9; nor shall the use of the phrase "in writing" or
the word "written" be construed to include electronic communications except by facsimile
transmissions as specifically set forth in Section 25.6 and other electronic signatures as specifically
set forth in Section 25.9. The terms and conditions contained in this Lease shall inure to the benefit
of and be binding upon the parties hereto, and upon their respective successors in interest and legal
representatives, except as otherwise herein expressly provided. This Lease is for the sole benefit
of Landlord and Tenant, and, other than Landlord's Mortgagee, no third party shall be deemed a
third -party beneficiary hereof.
25.9 Counterparts. This Lease (and amendments to this Lease) may be
executed in any number of counterparts, each of which shall be deemed to be an original, and all
of such counterparts shall constitute one document. To facilitate execution of this Lease, the
parties may execute and exchange, by telephone facsimile or electronic mail PDF, counterparts of
the signature pages. Signature pages may be detached from the counterparts and attached to a
single copy of this Lease to physically form one document.
25.10 Quiet Enjoyment. Provided Tenant has performed all of its obligations
hereunder, Tenant shall peaceably and quietly hold and enjoy the Premises for the Term, without
hindrance from Landlord or any party claiming by, through, or under Landlord, but not otherwise,
subject to the terms and conditions of this Lease and all matters of record as of the date of this
Lease which are applicable to the Premises.
25.11 No Merger. There shall be no merger of the leasehold estate hereby created
with the fee estate in the Premises or any part thereof if the same person acquires or holds, directly
or indirectly, this Lease or any interest in this Lease and the fee estate in the leasehold Premises or
any interest in such fee estate.
25.12 No Offer. The submission of this Lease to Tenant shall not be construed as
an offer, and Tenant shall not have any rights under this Lease unless Landlord executes a copy of
this Lease and delivers it to Tenant.
25.13 Entire Agreement; No Reliance. This Lease constitutes the entire
agreement between Landlord and Tenant regarding the subject matter hereof and supersedes all
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oral statements and prior writings relating thereto. Except for those set forth in this Lease, no
representations, warranties, or agreements have been made by Landlord or Tenant to the other with
respect to this Lease or the obligations of Landlord or Tenant in connection therewith. Except as
otherwise provided herein, no subsequent alteration, amendment, change or addition to this Lease
shall be binding unless in writing and signed by Landlord and Tenant. The normal rule of
construction that any ambiguities be resolved against the drafting party shall not apply to the
interpretation of this Lease or any exhibits or amendments hereto. Further, Tenant disclaims any
reliance upon any and all representations, warranties or agreements not expressly set forth in this
Lease.
25.14 Waiver of Jury Trial. TO THE MAXIMUM EXTENT PERMITTED BY
LAW, TENANT (ON BEHALF OF ITSELF AND ITS RESPECTIVE SUCCESSORS, ASSIGNS
AND SUBTENANTS) AND LANDLORD EACH, AFTER CONSULTATION WITH
COUNSEL, KNOWINGLY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY
LITIGATION OR TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE
ARISING OUT OF OR WITH RESPECT TO THIS LEASE OR ANY OTHER INSTRUMENT,
DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION
HEREWITH OR THE TRANSACTIONS RELATED HERETO.
25.15 Governing Law. This Lease shall be governed by and construed in
accordance with the laws of the state in which the Premises are located.
25.16 Recording. Tenant shall not record this Lease or any memorandum of this
Lease without the prior written consent of Landlord, which consent may be withheld or denied in
the sole and absolute discretion of Landlord. Tenant agrees that it shall execute and record a
release releasing any such recorded instrument of record that was recorded without the prior
written consent of Landlord.
25.17 Water or Mold Notification. To the extent Tenant or its agents or
employees discover any water leakage, water damage or mold in or about the Premises or Project,
Tenant shall promptly notify Landlord thereof in writing.
25.18 Joint and Several Liability. If Tenant consists of more than one party (or
if Tenant permits any other party to occupy the Premises), each such party shall be jointly and
severally liable for Tenant's obligations under this Lease. All unperformed obligations of Tenant
hereunder not fully performed at the end of the Term shall survive the end of the Term, including
payment obligations with respect to Rent and all obligations concerning the condition and repair
of the Premises.
25.19 Net Lease. This Lease is an absolute net lease. Tenant shall pay as
Additional Rent all expenses of every kind and nature whatsoever relating to or arising from the
Premises, including, but not limited to, Impositions and all expenses arising from the leasing,
operation, management, construction, maintenance, repair, use, and occupancy of the Premises,
except as otherwise expressly provided in this Lease.
25.2o Landlord's Fees. Whenever Tenant requests Landlord to take any action
not required of Landlord hereunder or give any consent required or permitted under this Lease,
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Tenant will reimburse Landlord for Landlord's reasonable, out-of-pocket costs payable to third
parties and incurred by Landlord in reviewing and taking the proposed action or consent, including
reasonable engineers' or architects' fees and reasonable attorneys' fees (including amounts
allocated by Landlord to Landlord's in-house counsel as well as fees and expenses charged by
outside counsel engaged by Landlord), within 30 days after Landlord's delivery to Tenant of a
statement of such costs.
25.21 Reserved,
25.22 Confidentiality. Tenant acknowledges that the terms and conditions of this
Lease are to remain confidential for Landlord's benefit, and may not be disclosed by Tenant to
anyone, by any manner or means, directly or indirectly; however, Tenant may disclose the terms
and conditions of this Lease to its attorneys, accountants, employees and existing or prospective
financial partners, or if required by Law, including the Texas Public Information Act, or court
order.
25.23 Authority. Tenant hereby represents and warrants to Landlord that Tenant
has full right and authority to execute and deliver this Lease, and that each person signing on behalf
of Tenant is authorized to do so. Landlord hereby represents and warrants to Tenant that Landlord
is a duly formed and existing entity qualified to do business in the state in which the Premises are
located, that Landlord has full right and authority to execute and deliver this Lease, and that each
person signing on behalf of Landlord is authorized to do so.
25.24 Hazardous Materials. The term "Hazardous Materials" means any
chemical, substance, material, object or waste or any combination thereof, which is now or
hereafter may be classified or considered to be hazardous, toxic, or dangerous under any Law
relating to pollution or the protection or regulation of human health, natural resources or the
environment, or poses or threatens to pose a hazard to the health or safety of persons on the
Premises or in the Project, including, but not limited to, petroleum and petroleum products,
benzene, toleune, ethyl benzene, xylenes, waste oil, asbestos, radon, polychlorinated biphenyls
(PCBs), degreasers, solvenats or any combinatoin of the foregoing. Tenant hereby represents,
warrants and covenants that no Tenant Party shall use, generate, store or Release (defined below),
or permit the use, generation, storage or Release of Hazardous Materials in, on, at, under, or about
the Premises or the Project except in a manner and quantity necessary for the ordinary performance
of Tenant's business, and then in compliance with all Laws and in a reasonable and prudent
manner. As used herein, "Release" means depositing, spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping or disposing. If any
Tenant Party breaches its obligations under this Section 25.24, Landlord may immediately take
any and all action reasonably appropriate to remedy the same, including taking all appropriate
action to clean up or remediate any contamination resulting from such Tenant Party's use,
generation, storage or disposal of Hazardous Materials. Tenant shall hold harmless Landlord and
its members, officers, employees, representatives and agents from and against any and all claims,
demands, liabilities, causes of action, suits, judgments, damages and expenses (including
reasonable attorneys' fees and cost of clean up and remediation) arising from any Tenant Party's
failure to comply with the provisions of this Section 25.24. This provision is intended to allocate
responsibility between Landlord and Tenant under environmental Laws and shall survive
termination or expiration of this Lease.
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25.25 List of Exhibits. All exhibits and attachments attached hereto are
incorporated herein by this reference.
Exhibit A - Description of the Land
Exhibit B - Form of Tenant Estoppel Certificate
Exhibit C - Extension Option
Exhibit D - Termination Option
25.26 Determination of Charges. Landlord and Tenant agree that each provision
of this Lease for determining charges and amounts payable by Tenant (including provisions
regarding Additional Rent) is commercially reasonable and, as to each such charge or amount,
constitutes a statement of the amount of the charge or a method by which the charge is to be
computed for purposes of Section 93.012 of the Texas Property Code.
25.27 Prohibited Persons and Transactions. Tenant represents and warrants
that neither Tenant nor any of its affiliates, nor any of their respective partners, members,
shareholders or other equity owners, and none of their respective employees, officers, directors,
representatives or agents is, nor will they become, a person or entity with whom U.S. persons or
entities are restricted from doing business under regulations of the Office of Foreign Assets
Control ("OFAC") of the Department of the Treasury (including those named on OFAC's
Specially Designated Nationals and Blocked Persons List) or under any statute, executive order
(including the September 24, 2001, Executive Order Blocking Property and Prohibiting
Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism), or other
governmental action and is not and will not Transfer this Lease to, contract with or otherwise
engage in any dealings or transactions or be otherwise associated with such persons or entities.
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This Lease is executed as of the Lease Date (as defined in the Basic Lease Information).
LANDLORD: [DART INTERESTS, LLCJ
a Delaware limited liability company
Name:
Title:
TENANT:
By: _
Name:
Title:
22
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[To be added]
Exhibit " / "
AmericasActive;17371881.9 Exhibit �JIILL �]
FORM OF TENANT ESTOPPEL, CERTIFICATE
The undersigned is the Tenant under the Lease (defined below) between
, a , as Landlord, and the undersigned as
Tenant, for the Premises on the floor(s) of the building located at
and commonly known as ,
and hereby certifies as follows:
1. The Lease consists of the original Lease Agreement dated as of
, 20_, between Tenant and Landlord['s predecessor -in -interest] and the
following amendments or modifications thereto (if none, please state "none"):
The documents listed above are herein collectively referred to as the "Lease" and represent the
entire agreement between the parties with respect to the Premises. All capitalized terms used
herein but not defined shall be given the meaning assigned to them in the Lease.
2. The Lease is in full force and effect and has not been modified, supplemented or
amended in any way except as provided in Section I above.
3. The Term commenced on 20_, and the Term
expires, excluding any extension options, on 120 and Tenant has
no option to purchase all or any part of the Premises or the Building or, except as expressly set
forth in the Lease, any option to terminate or cancel the Lease.
4. Tenant currently occupies the Premises described in the Lease and Tenant has not
transferred, assigned, or sublet any portion of the Premises nor entered into any license or
concession agreements with respect thereto except as follows (if none, please state "none"):
5. All monthly installments of Basic Rent, all Additional Rent and all monthly
installments of estimated Additional Rent have been paid when due through
The current monthly installment of Basic Rent is $
6. To the best of Tenant's knowledge, all conditions of the Lease to be performed by
Landlord necessary to the enforceability of the Lease have been satisfied and Landlord is not in
default thereunder. In addition, Tenant has not delivered any notice to Landlord regarding a default
by Landlord thereunder.
Exhibit `B" Page 1 of 2
AmericasAcdve:173718 81.9
7. As of the date hereof, there are no existing defenses or offsets, or, to Tenant's
knowledge, claims or any basis for a claim, that Tenant has against Landlord and no event has
occurred and no condition exists, which, with the giving of notice or the passage of time, or both,
will constitute a default under the Lease.
8. No rental has been paid more than 30 days in advance and no security deposit has
been delivered to Landlord except as provided in the Lease.
9. If Tenant is a corporation, partnership or other business entity, each individual
executing this Estoppel Certificate on behalf of Tenant hereby represents and warrants that Tenant
is and will remain during the Term a duly formed and existing entity qualified to do business in
the state in which the Premises are located and that Tenant has full right and authority to execute
and deliver this Estoppel Certificate and that each person signing on behalf of Tenant is authorized
to do so.
10. There are no actions pending against Tenant under any bankruptcy or similar laws
of the United States or any state.
11. Other than in compliance with all applicable laws and incidental to the ordinary
course of the use of the Premises, Tenant has not used or stored any hazardous substances in the
Premises.
12. All tenant improvement work to be performed by Landlord under the Lease has
been completed in accordance with the Lease and has been accepted by Tenant and all
reimbursements and allowances due to Tenant under the Lease in connection with any tenant
improvement work have been paid in full.
Tenant acknowledges that this Estoppel Certificate may be delivered to Landlord,
Landlord's Mortgagee or to a prospective mortgagee or prospective purchaser, and their respective
successors and assigns, and acknowledges that Landlord, Landlord's Mortgagee and/or such
prospective mortgagee or prospective purchaser will be relying upon the statements contained
herein in disbursing loan advances or making a new loan or acquiring the property of which the
Premises are a part and that receipt by it of this certificate is a condition of disbursing loan advances
or making such loan or acquiring such property.
Executed as of , 20_.
TENANT:
By:®
Name:
Title:
Exhibit `B" Page 2 of 2
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i
EXTENSION OPTION
1. Grant; Exercise of Extension Option. Landlord hereby grants Tenant one (1)
option to extend the Term of this Lease (the "Extension Option") with respect to the entire
Premises for a period of one (1) year (the "Option Term"). The Extension Option shall be
exercised, if at all, only by the delivery to Landlord by Tenant of written notice thereof (the
"Option Exercise Notice") not less than three (3) months prior to the then scheduled expiration
date of the Term of this Lease, which Option Exercise Notice shall state that Tenant is electing to
exercise such Extension Option. Subject to the provisions of this Lease, upon the exercise of the
Extension Option, the Term of this Lease shall be extended for a period of one (1) year.
2. Conditions to Exercise of Extension Option.
The Extension Option (a) is personal to the original Tenant executing this Lease and may
not be exercised by any person or entity to whom a Transfer is made or sought to be made including
any transferee pursuant to a Transfer consented to by Landlord, and (b) may only be exercised
with respect to the entire Premises. Notwithstanding anything in this Lease to the contrary, at the
election of Landlord, any attempted exercise by Tenant of an Extension Option shall be invalid,
ineffective, and of no force or effect if, on the date of such attempted exercise of such Extension
Option: (i) a default by Tenant exists under this Lease (which has not been waived in writing by
Landlord); or (ii) there shall exist a Transfer or a Transfer shall have been made. If Tenant does
not timely deliver an Option Exercise Notice with respect to the Extension Option pursuant to the
provisions of Section 1 above within the applicable time period, time being of the essence, then at
the election of Landlord, Tenant shall be deemed to have forever waived and relinquished the
Extension Option, and any other options or rights to renew or extend the Term effective after the
then -current expiration date of this Lease shall terminate and shall be of no further force or effect.
3. Option Basic Rent. The monthly Basic Rent (the "Option Basic Rent") payable
by the Tenant shall be equal to $67,5000.00 per month or $810,000.00 per annum.
4. Lease Terms for Option Term. If Tenant duly exercises the Extension Option the
Term shall be extended on the same terms and conditions as the initial Term, except that: (i) Tenant
shall pay Option Basic Rent during the Option Term as set for in Section 3 hereof, (ii) Landlord
shall not be obligated to make any alterations or improvements to the Premises, or to provide an
allowance or credit therefor and (iii) Tenant shall have no further right to extend the Term of this
Lease.
Exhibit "B" Page 3 of 2
AmericasAcdve:17371881.9
oil 1.3 1 d1
TEI2NUNATION OPTION
1. Grant; Exercise of Termination Option. Landlord hereby grants Tenant a one-
time option (the "Termination Option") to terminate this Lease as to the entire Term or a portion
of the Term, upon written notice to Landlord at any time during the Term of this Lease (the
"Termination Notice").
2. Conditions to Exercise of Termination Option. The Termination Option (a) is
personal to the original Tenant executing this Lease and may not be exercised by any person or
entity to whom a Transfer is made or sought to be made including any transferee pursuant to a
Transfer consented to by Landlord, (b) may only be exercised with respect to the entire Premises,
and (c) may only be exercised so long as no Event of Default (as defined in the Lease) exists on
either the date Tenant sends the Termination Notice or, in the case of a termination as to a portion
of the Term, the Termination Date (as defined below). The Termination Notice shall specify
whether Tenant intends to terminate the Lease as to the entire Term or a portion of the Term, and
if Tenant elects to terminate the Lease as to a portion of the Term, the Termination Notice shall
specify the termination date (the "Termination ]Date").
3. Termination Fee. If Tenant exercises the Termination Option, Tenant shall be
obligated to pay to Landlord in immediately available funds, a lease termination fee (the
"Termination Fee") in an amount equal to the sum of (a) the Basic Rent, (b) the Impositions (as
defined in the Lease), and (c) Landlord's Insurance Costs (as defined in the Lease) (limited to One
Hundred Thousand and 00/100 Dollars ($100,000.00) per year) that would have otherwise been
payable under the Lease either for the entire Term or from and after the Termination Date, as
applicable. The Termination Fee shall be due and payable contemporaneously with Tenant's
delivery of the Termination Notice. If Tenant fails to pay any part of the Termination Fee as and
when due and payable, then the Termination Option shall be void and of no further force or effect
(in which case Tenant shall no longer have the right or option to exercise the Termination Option),
in which case the Lease shall continue as if Tenant did not exercise the Termination Option.
AmericasAc6ve:17371881.9
SCHEDULE 1.5
New Library Option Agreement
OPTION AGREEMENT TO ENTER INTO
NEW LIBRARY LEASE AGREEMENT
This OPTION AGREEMENT TO ENTER INTO NEW LIBRARY LEASE
AGREEMENT (the "New Library Option Agreement") is made and entered into by and between
the City of Fort Worth, Texas, a home -rule Municipal Corporation of the State of Texas ("Ciff" ),
acting by and through its duly authorized Assistant City Manager and Dart Interests, LLC, a
Delaware limited liability company ("Dart"), as of the date on which this Agreement is executed
by the last to sign of City and Dart ("Effective Date").
WHEREAS City and Dart executed a Purchase and Sale Agreement ("Purchase and Sale
Agreement") for the sale of certain real (immovable) property and improvements commonly
known as "The Fort Worth Central Library" consisting of a three-story building located at 500
West 3rd Street, Fort Worth, Texas 76102, more specifically described in Exhibit "A" attached
hereto, and containing approximately 234,039 square feet of space together with certain related
personal and intangible (movable) property (collectively, the "Pro e "); and
WHEREAS Purchaser intends to redevelop the Land (as defined in the Purchase and Sale
Agreement) for the purpose of constructing two large-scale, mixed -use, high-rise towers
(collectively, the "Redeveloped Building'); and
WHEREAS, in accordance with the terms of the Purchase and Sale Agreement, Purchaser
has agreed to grant Seller an option (the "New Library Option") to lease a portion of the space
within the Redeveloped Building (the "New LibrM Space") for an option period terminating one
hundred and twenty (120) days after the Closing Date (the "New Library Option Term") for the
purpose of the operating a public library; and
WHEREAS the purchase and sale of the Property was consummated on even date
herewith, , 2022 (the "Closing Date').
NOW, THEREFORE, in consideration of the foregoing, the mutual covenants hereinafter
contained, and other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, City and Dart (each a "PALty", and collectively, the "Parties") agree as
follows:
1. Dart hereby grants to City an option (the "New Library Option") to lease a portion
of the space within the Redeveloped Building (the "New LibrM Space") subject to the terms and
conditions contained herein. City's exercise of the New Library Option shall be evidenced by
written notice from City to Dart that City intends to lease the New Library Space, which notice
must be delivered to Dart no later than one hundred and twenty (120) days after the Closing Date
(the "New Library Option Term"). Time is of the essence in the exercise of the New Library
Option, and, if City fails to timely exercise the New Library Option, the New Library Option shall
be void and of no further force or effect (in which case City shall not thereafter have the right to
lease the New Library Space from Dart).
AmericasActive:17371881.9
2. If City timely exercises its New Library Option, the City and Dart will reasonably
cooperate and use good faith efforts to enter into a lease agreement (the "New Library Lease") for
the New Library Space in a form reasonably agreeable to City and Dart within a commercially
reasonable time after Dart completes the final design of the Redeveloped Building. The New
Library Lease would include the following terms and conditions: (i) a New Library Space ranging
from 40,000 to 60,000 rentable square feet of space; (ii) an initial term of twenty (20) years with
the amount of rent due equal to the greater of (1) fair market rental rates, or (2) a seven percent
(7%) yield on the allocated build -out costs for the New Library Space, net of operating costs and
common area maintenance expenses (to be further defined in the New Library Lease); (iii) build -
out specifications as reasonably agreeable to City and Dart; (iv) a limitation of the use of the New
Library Space for public purposes, including the operation of a public library; and (v) other terms
and conditions as may be agreed upon by City and Dart.
Dart's grant to City of this New Library Option and Dart's willingness to enter into the
New Library Lease shall are contingent upon Dart's completion of the Redeveloped Building. City
and Dart further agree to reasonably cooperate and use good faith efforts to (i) adjust the terms of
the New Library Lease based upon available tax incentives or other variables; and (ii) explore
establishing a condominium regime for the New Library Space and selling the New Library Space
to City for fair market value upon the earlier of (i) ten (10) years after Dart's completion of the
Redeveloped Building, or (ii) the date that the Redeveloped Building has achieved occupancy of
at least ninety percent (90%) for no less than three (3) consecutive months; provided that any
decision to establish a condominium regime for the New Library Space and sell the New Library
Space to City for fair market value shall be in Dart's sole and absolute discretion.
3. Neither party may file this New Library Option Agreement of record. However,
within fifteen (15) days upon written request of either party, the parties hereto agree to execute a
memorandum of option in substantially the form attached hereto as Exhihit "B", and may file such
memorandum of option of record. In addition, upon the termination of this New Library Option
Agreement and within fifteen (15) days upon the written request of either party, the parties hereto
agree to execute a memorandum of termination acknowledging that the option rights set forth in
this New Library Option Agreement have terminated.
4. Any notice required or permitted to be given hereunder may be served by a party
or its attorney and must be in writing and shall be deemed to be given when (a) hand delivered, (b)
when delivered to United Parcel Service (Overnight) or Federal Express, or another similar
overnight express service, or (c) transmitted by electronic mail (provided that a copy is also sent
by the manner described in clause (a) or (b) on the following business day), in any case addressed
to the parties at their respective addresses set forth below:
If to City: City of Fort Worth
Property Management Department
200 Texas Street
Fort Worth, TX 76102
Attn: Ricky Salazar, Assistant Director
Ricardo. Salazar@fortworthtexas.gov
With a copy to: City of Fort Worth
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200 Texas Street
Fort Worth, TX 76102
Matthew A. Murray, Assistant City Attorney
Matthew.Murray@fortworthtexas.gov
If to Dart: Dart Interests LLC
3811 Turtle Creek Blvd
Suite 975
Dallas, TX 75201
Attn: Christopher Kelsey, President
[Email address]
[Signature Page Follows]
AmericasActive;17371881.9
By:
Dana Burghdoff, Assistant City Manager
Date:
ATTEST:
Jannette S. Goodall
City Secretary
Matthew A. Murray
Assistant City Attorney
M&C:
Date:
Contract Compliance Manager:
By signing I acknowledge that I am the person responsible for the monitoring and
administration of this contract, including ensuring all performance and reporting requirements.
Ricky Salazar, Assistant Director
Property Management Department — Real Estate Division
DART INTERESTS LLC
an
Date:
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EXHIBIT "A"
Legal Description
Approximately 2.32 acres of land known as 500 W. 3rd Street, Fort Worth, Texas 76102 and being
described as Block 45R to the Original Town of Fort Worth.
Tarrant Appraisal District Account Number 06533019
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Form of Memorandum of Option
STATE OF TEXAS §
§ KNOW ALL MEN BY THESE PRESENTS THAT:
COUNTY OF TARRANT §
This MEMORANDUM OF OPTION is made and entered into as of the day of
, 2022 (the "Closing Date"), by and between the City of Fort Worth, Texas, a home -
rule Municipal Corporation of the State of Texas ("C"), and Dart Interests, LLC, a Delaware
limited liability company ("Dart").
Pursuant to that certain OPTION AGREEMENT TO ENTER INTO NEW LIBRARY
LEASE AGREEMENT (the "New Library ption Agreement") dated as of ,
2023, by and between City and Dart, Dart has granted to City the option (the "New Library
Option") to lease a portion of the space located within any redeveloped building (collectively, the
"Redeveloped Building") that Dart may construct on that certain real property located at 500 West
3rd Street, Fort Worth, Texas 76102, more specifically described in Exhibit "A" attached hereto
(collectively, the "Pro e ").
City's exercise of the New Library Option shall be evidenced by written notice from City
to Dart that City intends to lease the New Library Space, which notice must be delivered to Dart
no later than one hundred and twenty (120) days after the Closing Date (the "New Library ption
Term"). Time is of the essence in the exercise of the New Library Option, and, if City fails to
timely exercise the New Library Option, the New Library Option shall be void and of no further
force or effect (in which case City shall not thereafter have the right to lease the New Library
Space from Dart).
This Memorandum of Option is executed pursuant to the provisions of the New Library
Option Agreement, and is not intended to vary or supersede the terms and conditions of the New
Library Option Agreement. In the event any conflict exists between this Memorandum of Option
and the New Library Option Agreement, the provisions of the New Library Option Agreement
shall control.
The New Library Option Agreement and the obligations of Dart thereunder are hereby
intended to run with the Property and will be binding upon Dart and each and every subsequent
owner, tenant, subtenant, licensee, manager, and occupant of the Property, but only during the term
of such party's ownership, tenancy, license, management or occupancy of the Property, for which
such party will remain liable and will be binding upon and inure to the benefit of City. It is
expressly understood and agreed that acceptance of title to all or a portion of the Property will
automatically, and without further acknowledgement or conformation from the owner, constitute
such owner's assumption of the obligations of Dart under the Leaseback Option Agreement.
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CITY OF FORT WORTH, TEXAS
By:
Dana Burghdoff, Assistant City Manager
Date:
ATTEST:
Jannette S. Goodall
City Secretary
Matthew A. Murray
Assistant City Attorney
M&C: _
Date:
Contract Compliance Manager:
By signing I acknowledge that I am the person responsible for the monitoring and
administration of this contract, including ensuring all performance and reporting requirements.
Ricky Salazar, Assistant Director
Property Management Department — Real Estate Division
DART INTERESTS, LLC
an
Date:
[Acknowledgements follow]
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(Acknowledgment)
THE STATE OF TEXAS §
COUNTY OF TARRANT §
This instrument was acknowledged before me on the day of
2023, by of the
City of Fort Worth, a Texas home rule municipal corporation on behalf of said City of Fort Worth.
Notary Public, State of Texas
Notary's Name (printed):
Notary's commission expires:
(Acknowledgment)
TBE STATE OF TEXAS §
COUNTY OF §
This instrument was acknowledged before me on the day of
2023, by of the
Dart Interests, LLC, a Delaware limited liability company, on behalf of said limited liability
company.
Notary Public, State of Texas
Notary's Name (printed):
Notary's commission expires:
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'?i,VI VAMMMUL3 1DMI
Legal Description
Approximately 2.32 acres of land known as 500 W. 3rd Street, Fort Worth, Texas 76102 and being
described as Block 45R to the Original Town of Fort Worth.
Tarrant Appraisal District Account Number 06533019
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SCHEDULE 3.3
Property Documents
To the extent in the possession of or under the control of Seller:
(i) the most recent survey of the Real Property;
(ii) plans, specifications and drawings relating to the building improvements on the Land,
including, without limitation floor plans of the building indicating current tenant demising,
if applicable, and any CAD files of such improvements, if applicable;
(iii) any certificates confirming the area of leased space or floor areas in the building;
(iv) all existing Leases and pending lease proposals, if any;
(v) all Service Contracts;
(vi) any written warranties for tangible Personal Property;
(vii) tenant files, including occupancy permits if applicable, relating to any existing tenants;
(viii) structural, mechanical, electrical, engineering, soil, environmental and fire inspection
reports, if any, and copies of any notices or correspondence from tenants or governmental
entities giving notice of any violations of any regulatory requirements;
(ix) financial statements (including monthly general ledgers), aged receivable reports,
operating cost and real estate tax bills (including any real estate tax appeals), tenant
reconciliation statements, operating budgets and reports, capital expenditures and
recoveries, for the past two (2) fiscal years and the current year to date;
(x) balance sheet and income statement (audited if available) for the Property for the past two
(2) years, twelve (12) month trailing income statement, statement of cash flow, and the
notes to the financial statements;
(xi) copies of correspondence to and from any governmental authority in respect of any
outstanding regulatory violation or deficiency of which Seller has received written notice;
(xii) a copy of the Seller's existing owner title insurance policy;
(xiii) schedule of any non -tenant revenue at the Property, such as parking, signage, etc. together
with supporting documentation;
(xiv) if applicable, any land lease or off -site parking agreement;
(xv) all utility invoices, including but not limited to, water, natural gas, electricity and sewer for
the immediately preceding two (2) years;
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(xvi) a list of all tangible Personal Property owned by Seller (other than Sellers internal books
and records, computers, intellectual property and other such property that is personal to
Seller); used in connection with the operation of the Real Property and located at the Real
Property; and
(xvii) copies of maintenance, repair, improvement records and documents for the current and
prior year, including all reports, records and documents relating to capital expenditures or
recommended capital expenditures;
(xviii) insurance loss runs for the Property; and
(xix) tenant improvement and leasing commissions for the last two (2) years.
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L ,1
CERTIFICATION OF NON -FOREIGN STATUS UNDER
TREASURY REGULATIONS SECTION 1.1445-2(b)
Section 1445 of the Internal Revenue Code provides that a transferee of a U.S. real property interest
must withhold tax if the transferor is a foreign person. For U.S. tax purposes (including section
1445), the owner of a disregarded entity (which has legal title to a U.S. real property interest under
local law) will be the transferor of the property and not the disregarded entity. To inform the
transferee that withholding of tax is not required upon the disposition of a U.S. real property
interest by City of Fort Worth, Texas (the "Transferor"), hereby certifies the following on behalf
of the Transferor;
1. Transferor is not a foreign corporation, foreign partnership, foreign trust, or
foreign estate (as those terms are defined in the Internal Revenue Code and Income Tax
Regulations);
2. Transferor's U.S. employer identification number is ; and
3. Transferor's office address is
The Transferor understands that this certification may be disclosed to the Internal Revenue Service
by transferee and that any false statement contained herein could be punished by fine,
imprisonment, or both.
[Signature Page Follows]
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Under penalties of perjury I declare that I have examined this certification and to the best of my
knowledge and belief it is true, correct, and complete, and I further declare that I have authority
to sign this document on behalf of the Transferor.
Dated: _, 2022
THE STATE OF TEXAS §
COUNTY OF TARRANT §
by
TRANSFEROR:
City of Fort Worth, Texas
This instrument was acknowledged before me on the day of
of the City of Fort Worth, Texas.
Notary Public
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2022,
.1 1
W . e j f 11
[SUBJECT TO REVIEW BY TITLE COMPANY]
The City of Fort Worth, Texas (the "City"), the owner of the property described in the
Commitment for Title Insurance (the "Commitment") referenced above, and states that to the
best of his actual knowledge in his capacity as an authorized officer:
1. The City is the owner of the premises described on Schedule A in the Commitment
listed above (the "Property").
2. That there has been no labor, material, surveying, or architectural services furnished
or performed for the improvement of the Property for which payment has not been made within
90 days prior to the date hereof, except as set forth on Exhibit A attached hereto.
That there are no tenants, lessees or parties in possession, of which the affiant has
knowledge.
This affidavit is given to induce Title Insurance Company to issue its
policies of title insurance including endorsements knowing full well that it will be relying upon
the accuracy of the same.
Your affiant hereby specifically and affirmatively states that he is an officer of the City and
that she is properly authorized to act on behalf of said City in all dealings concerning this
transaction, that the City is desirous of effecting the conveyance of the herein described real
property, and that the City has specifically and affirmatively authorized your affiant to
execute any and all documents necessary to effect such conveyance.
[signatures follow on next page]
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THE STATE OF TEXAS
COUNTY OF TARRANT
by
AFFLA-NT:
City of Fort Worth, Texas
This instrument was acknowledged before me on the _ day of
of the City of Fort Worth, Texas
Notary Public
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2022,
EXBIBIT A
to Owner's Affidavit
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12/27/22, 10:59 AM M&C Review
CITY COUNCIL AGENDA
Create New From This M&C
DATE: 12/13/2022 REFERENCE NO.: M&C 22-1056 LOG NAME:
CODE: L TYPE: NON -CONSENT PUBLIC
HEARING:
Official site of the City of Fort Worth, Texas
FoRTWORin
21500 W 3RD
ST SALE
lue
SUBJECT: (CD 9) Authorize the Direct Sale of City Fee -Owned Property Commonly Known as the
Central Library Located at 500 West 3rd Street, Fort Worth, Texas 76102 to Dart
Interests, LLC, or an Affiliate, for a Sales Price of $18,000,000.00 in Accordance with
Section 253.014 of the Texas Local Government Code and Authorize a Leaseback of the
Property for a Term Not to Exceed Two Years
RECOMMENDATION:
It is recommended that the City Council:
1. Authorize the direct sale of City fee -owned property commonly known as the Central
Library located at 500 West 3rd Street, Fort Worth, Texas 76102 to Dart Interests, LLC, or an
affiliate, for a sales price of $18,000,000.00 in accordance with Section 253.014 of the Texas
Local Government Code;
2. Authorize execution of a leaseback agreement for the property for a term not to exceed two
years; and
3. Authorize the City Manager or designee to execute the purchase and sale agreement and to
execute and record the deed and any other documents necessary to complete the
conveyance.
DISCUSSION:
The purpose of this Mayor and Council Communication (M&C) is to authorize the conveyance of land
and improvements commonly known as the Central Library, located at 500 West 3rd Street, Fort
Worth, Tarrant County, Texas 76102 and being approximately 2.32 acres situated in Block 45R, Fort
Worth Original Town Addition (Property) to Dart Interests, LLC, or affiliate (Dart). The Property was
purchased by the City of Fort Worth (City) in 1976 for the Central Library (Library) with the original
underground structure being completed in 1978. On February 18, 1992 (M&C C-13246) Fort Worth
City Council (Council) approved the design for a ground floor shell structure to cover the underground
Library site to allow for future expansion of the Library and for the construction of improvements to
prevent stormwater from entering the Library. On July 29, 1997 (M&C G-11957), Council approved
the renovation and infrastructure necessary to finish out the first floor of the Library. The renovations
to the Library were completed in 1999.
Section 253.014 of the Texas Local Government Code allows a municipality to sell City -owned
property by contracting with a broker, provided that the property is listed with a multiple -listing service
for at least 30 days and that the property is sold to the buyer who submits the highest cash offer. The
City contracted with Jones Lang Lasalle Brokerage and the Property was listed for 160 days with a
multiple -listing service. The listing required prospective buyers to develop the Property as a mixed -
use project including office space and high-rise residential, to provide a lease of space with an
option to purchase for a new library within the redeveloped property, and a minimum total capital
investment of $100,000,000.00. The City also published notice of its intention to sell the Property in
the Fort Worth Star -Telegram once a week for four consecutive weeks.
The City reviewed multiple offers and recommends accepting Dart's offer of $18,000,000.00, which
was the highest cash offer and included a mixed -use development project. Upon closing, Dart
has agreed to lease the Property back to the City for a one-year term with an option to extend for an
additional year. The base rent for the first year will be $400,000.00 with the City also being
responsible for all taxes, insurance, and operational costs (property taxes are estimated to be in the
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12/27/22, 10:59 AM
M&C Review
amount of $445,000.00 and insurance and operating expenses are estimated to be in the amount
of $300,000.00) for an estimated total cost of $1,145,000.00. The base rent for the second year, if
necessary, would be $810,000.00. The City and Dart agreed to a lease buy-out fee equal to the pro-
rated rent amount left for the term with property taxes being paid by the City in full. The proceeds
from the sale of the Property will be used to pay for the leaseback, property taxes, insurance, and
operating expenses.
This property is located in COUNCIL DISTRICT 9.
FISCAL INFORMATION/CERTIFICATION:
The Director of Finance certifies that upon approval of the above recommendations and sale of the
property, funds will be deposited into the General Capital Projects Fund. The Property Management
Department (and Financial Management Services) is responsible for the collection and deposit of
funds due to the City. Prior to an expenditure being incurred, the Property Management Department
has the responsibility of verifying the availability of funds.
TO
Fund Department Account Project Program Activity Budget Reference # Amount
ID ID Year (Chartfield 2)
Submitted for City Manager's Office by_
Originating Department Head:
Additional Information Contact:
ATTACHMENTS
Dana Burghdoff (8018)
Steve Cooke (5134)
Ricky Salazar (8379)
Ft Worth Library Project Form 1295 Certificate 100983989 2022.12.01.pdf (CFW Internal)
MC FID Table Central Library-.pdf (CFW Internal)
PMD 500 W 3RD ST SALE.pdf (Public)
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