EXHIBIT 10.2
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PURCHASE AND SALE AGREEMENT
AND
ESCROW INSTRUCTIONS
TO: Commerce Escrow Company
0000 Xxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxx Xxxxxxx, XX 00000
Re: Escrow No. 96-24820
Gentlemen:
1. Establishment of Escrow. G.A. MAC DONALD CONSTRUCTION
CO. INC., a California corporation (hereinafter referred to as "Mac
Donald Construction") and XXXX X. XXX XXXXXX and XXXXX X. XXX XXXXXX, as
Trustees Under the Will of Xxxxxx X. Xxx Xxxxxx, Deceased (hereinafter
referred to as the "Trust") (and Mac Donald Construction and the Trust
herein collectively referred to as "Seller"), as the seller herein, and
XXXXXXX MANUFACTURING CO., INC., a California corporation (hereinafter
referred to as "Buyer"), as the buyer herein, hereby establish the
above-referenced escrow (hereinafter, the "Escrow"). You are hereby
instructed to hold in the Escrow the documents and funds to be delivered
to you under these Escrow Instructions, and to deliver said documents
and funds from the Escrow, in the manner and at the time hereinafter
indicated, pursuant to your standard escrow service. However,
notwithstanding the preceding provisions of this paragraph, the Escrow
shall be deemed established, and this Purchase and Sale Agreement and
Escrow Instructions (hereinafter referred to as "these Escrow
Instructions"), including the contract of purchase and sale between the
parties embodied herein, as described in Paragraph 2, shall become
effective, upon, and only upon, the delivery to you of these Escrow
Instructions, in the form of a single fully- executed original hereof,
or counterparts hereof, executed by the respective parties. The date
upon which these Escrow Instructions, in the condition described in the
preceding sentence, are delivered to you, or delivery thereof to you is
completed, is hereinafter referred to as "the Escrow Opening Date."
Upon the occurrence of the Escrow Opening Date, you shall promptly
notify the parties in writing thereof. In the event that these Escrow
Instructions are delivered to you in counterparts and the Escrow Opening
Date does not occur within three (3) business days after either party
first delivers to you such party's executed counterpart hereof, then you
shall immediately notify the parties thereof and, upon written demand
made in writing to you before the occurrence of the Escrow Opening Date
by any party who shall theretofore have delivered to you such party's
executed counterpart hereof, you shall deliver such party's executed
counterpart hereof back to such party and this transaction shall
thereupon be deemed terminated, with no further liability to either
party.
2. Contract of Purchase and Sale Embodied Herein. As matters
with which you shall not be concerned, the parties hereto hereby agree
that (a) these Escrow Instructions shall also constitute a legally
binding contract of purchase and sale between Seller and Buyer with
respect to the property and other matters covered hereby, and (b) these
Escrow Instructions shall be read and construed as an integration of the
parties' entire agreement and understanding with respect to the subject
matter hereof, all prior and contemporaneous oral agreements,
understandings and representations and prior written agreements,
understandings and representations between the parties and/or their
respective representatives relating to such subject matter being hereby
declared to be superseded and of no further force or effect.
3. Property to be Sold and Purchased. Seller hereby agrees
to sell to Buyer, and Buyer hereby agrees to purchase from Seller, upon
the terms and conditions set forth herein, all of that certain real
property located at 1545 Moonstone, Brea, California, and more
particularly described in Exhibit A attached hereto, together with all
improvements, fixtures and appurtenances thereon or constituting a part
thereof. The aforesaid real property, improvements, fixtures and
appurtenances are hereinafter referred to collectively as "the Subject
Property".
4. Amount and Form of Purchase Price. The purchase price
for the Subject Property (hereinafter, "the Purchase Price") shall be
One Million Eight Hundred Twenty-Five Thousand Dollars ($1,825,000.00).
The Purchase Price shall be paid as follows:
(a) Deposit. A deposit toward the Purchase Price in the
amount of Ten Thousand Dollars ($10,000.00) (hereinafter, "the Deposit")
shall be delivered to Escrow by Buyer in the form of a personal check
simultaneously with Buyer's delivery to you of an original or
counterpart of these Escrow Instructions signed by Buyer.
Notwithstanding anything else herein, in the event that, for any reason,
said check is not honored when presented for payment, then (provided
that these Escrow Instructions shall first have become effective
pursuant to the provisions of Paragraph 1) Buyer shall be deemed in
default hereunder, and Seller, without limitation of any other rights or
remedies Seller may have hereunder or under law by reason of such
default, shall have the right, at Seller's election, by written notice
to Buyer and you, to forthwith terminate the Escrow and the contract of
purchase and sale embodied in these Escrow Instructions.
(b) Balance of Purchase Price. On or before the Closing
Date, as hereinafter defined, Buyer shall deliver into Escrow Buyer's
cash funds in the amount of One Million Eight Hundred Fifteen Thousand
Dollars ($1,815,000.00). Buyer shall also deliver into Escrow on or
before the Closing Date, such additional cash funds as may be necessary
to pay Buyer's share of the closing costs and escrow prorations provided
for herein.
5. Deposit of Deed; Condition of Title. On or before the
Closing Date, Seller shall deposit into the Escrow Seller's properly
executed and acknowledged grant deed or grant deeds (hereinafter in
either case, "the Grant Deed") conveying the Subject Property in fee
simple to Buyer (or to Buyer's nominee, if Buyer shall designate such a
nominee to Seller and you in writing prior to the close of Escrow).
IT IS THE INTENT OF THE PARTIES THAT, NOTWITHSTANDING SELLER'S USE OF A
GRANT DEED TO CONVEY THE SUBJECT PROPERTY TO BUYER HEREUNDER, SELLER
SHALL MAKE NO REPRESENTATIONS OR WARRANTIES TO BUYER WITH RESPECT TO THE
CONDITION OF TITLE TO THE SUBJECT PROPERTY, IT BEING AGREED THAT THE
BUYER SHALL RELY SOLELY UPON THE POLICY OF TITLE INSURANCE PROVIDED FOR
BELOW AS TO ANY TITLE ASSURANCES BUYER MAY REQUIRE.
6. Preliminary Title Report.
(a) Delivery of Title Report to Buyer. As soon as
practicable after the Escrow Opening Date, you shall cause Chicago Title
Company (the "Title Company") to issue and deliver to Buyer and Seller a
current preliminary title report covering the Subject Property, together
with copies of all instruments and documents of record that are listed
as exceptions therein, said preliminary title report and the copies of
said instruments and documents being hereinafter referred to
collectively as "the Title Report".
(b) Buyer's Right to Approve Title Report: Buyer shall
have ten (10) calendar days from receipt of the Title Report to review
and approve the same. If Buyer disapproves of any item disclosed in the
Title Report, Buyer must notify you and Seller in writing of that item
and the nature of Buyer's objection within said 10-day period. If Buyer
fails to give you and Seller such written notice of disapproval within
said 10-day period, Buyer shall be deemed to have disapproved the Title
Report and every item disclosed therein. Notwithstanding any of the
foregoing, Buyer shall not have the right to disapprove any exception to
title set forth in the Title Report to the extent that such exception
constitutes a lien for applicable current, non-delinquent property taxes
and assessments.
(c) Seller's Right to Cure Objections. If Buyer shall
disapprove of any item disclosed in the Title Report, in the manner and
within the time provided for in the preceding subparagraph (b), then,
for a period of ten (10) days after Buyer gives you and Seller notice of
such disapproval, Seller shall have the right to elect to cure such
disapproved item prior to the close of Escrow, or to elect not to cure
such disapproved item. Notice of Seller's election in this regard shall
be given to you and Buyer in writing within the aforesaid 10-day period.
Failure of Seller to give such notice within said period shall
constitute an election not to cure. If Seller shall elect to cure a
disapproved item as aforesaid, then Seller shall be obligated to cure
the same prior to the close of Escrow, and the Closing Date shall be
extended for such period of time, not exceeding thirty (30) business
days, as Seller may reasonably require in order to effect such cure. If
Seller shall elect not to cure a disapproved item, then, for a period of
ten (10) days after Seller's written notice to Buyer of Seller's
election not to cure (or the expiration of Seller's election period, if
Seller fails to give such notice), Buyer shall have the right to either
waive Buyer's objection or terminate this transaction. Notice of
Buyer's election in this regard shall be given to you and Seller in
writing within said 10-day period. Failure of Buyer to give such notice
within said period shall constitute an election by Buyer to terminate
this transaction. If Buyer elects to terminate this transaction, the
Escrow shall terminate without further liability on the part of either
party (except that Buyer's obligations under Paragraph 8(c) shall
survive such termination), all documents and moneys deposited therein by
either party shall be returned to such party, and Buyer and Seller shall
pay equally any escrow cancellation charges for escrow work done to the
date of termination.
(d) Approved Title Report. As hereinafter used, the
term, "Approved Title Report" shall be deemed to mean the Title Report,
as approved by Buyer pursuant to subparagraph (b) of this paragraph, or,
if Buyer shall disapprove of any item disclosed in the Title Report
pursuant to the provisions of subparagraph (b) of this paragraph and
Seller shall elect to cure such disapproved item pursuant to the
provisions of subparagraph (c) of this paragraph, then the term
"Approved Title Report" shall be deemed to refer to the Title Report
after amendment of same to reflect Seller's curing of such disapproved
item.
7. Title Insurance Policy. In connection with the closing
of Escrow, you shall cause the Title Company to issue and furnish to the
grantee(s) under the Grant Deed a CLTA standard coverage form policy of
title insurance, with liability in the amount of the Purchase Price,
insuring said grantee(s)' fee title to the Subject Property, subject
only to:
(a) All exceptions disclosed in the Approved Title
Report;
(b) The lien for applicable property taxes and
assessments that are current and non-delinquent as of the Closing Date;
(c) Any matters arising of record after the date of the
Title Report by reason of any act or omission of Buyer or any agent,
employee, contractor or other representative of Buyer, which matters are
still of record as of the Closing Date; and
(d) Such printed exceptions and exclusions from coverage
as are usually contained in the aforesaid form policy of title
insurance.
Notwithstanding the foregoing, Buyer, at Buyer's election, may require
that the policy of title insurance to be issued pursuant to this
paragraph be an ALTA extended coverage policy and/or contain such
endorsements as Buyer may deem necessary or desirable, provided that
Buyer shall pay for and furnish any survey of the Subject Property that
may be required in order for such ALTA policy or such endorsements to be
issued, and provided further that Buyer's requirement of such ALTA
policy and/or such endorsements shall be deemed waived to the extent
that such requirement would prevent or delay the timely closing of this
transaction as otherwise provided for herein and Buyer would otherwise
be required to proceed with the closing of this transaction were it not
for such requirement. Except as otherwise provided for below, your
agreement to cause the Title Company to issue the policy of title
insurance required hereby subject only to the exceptions referenced
above in this paragraph shall be a condition precedent to Buyer's
obligation to proceed with the closing of this transaction. Subject to
the provisions of Paragraphs 5 and 6, each party hereto hereby agrees to
deliver to you, in timely fashion, any funds and/or recordable documents
and other instruments needed by you from such party in order to enable
the Title Company to issue the aforesaid policy of title insurance,
subject only to the exceptions referenced above in this paragraph, and
you are authorized to pay, from your own funds and/or any funds
deposited with you hereunder, any unpaid taxes, assessments, costs,
charges, liens and other items necessary to be paid in order to enable
the Title Company to issue such policy of title insurance. The amount
of any item so paid by you should be debited or credited, as may be
appropriate, to the escrow accounts of the appropriate parties. In the
event that, as of the Closing Date (as determined without regard to this
paragraph), the Title Company is unable to furnish the policy of title
insurance provided for above, then, unless Buyer, in Buyer's sole
discretion, shall waive the requirement of such policy of title
insurance in writing, Seller may, at Seller's sole option, elect, by so
notifying you and Buyer on or before the Closing Date (as determined
without regard to this paragraph), to either (w) attempt to take such
steps, if any, as may be required to enable the Title Company to issue
said policy of title insurance, or as may be required to procure said
policy of title insurance from another reputable title insurance company
qualified to issue title insurance in California, or (x) propose to
terminate this transaction without further liability to either party.
If Seller fails to elect either of the aforesaid options by so notifying
you and Buyer as aforesaid, Seller shall be deemed to have elected
option (x). If Seller elects option (w), the Escrow shall be extended
for such period of time, not exceeding fifteen (15) business days, as
Seller may require to pursue such option. If Seller elects option (w),
but is unsuccessful in causing the aforesaid policy of title insurance
to be issued within the aforesaid 15-business-day period, or if Seller
elects option (x), then, in either such case, for a period of ten (10)
business days after Seller's written notice to Buyer of Seller's
election (or the expiration of Seller's election period, if Seller fails
to give such notice), Buyer may, at Buyer's sole option, elect, by so
notifying you and Seller, to either (y) attempt to take such steps, if
any, as Buyer may be able to take to enable the Title Company to issue
said policy of title insurance, or as may be required to procure said
policy of title insurance from another title insurance company, or (z)
accept Seller's proposal to terminate this transaction without further
liability to either party. Notice of Buyer's election in this regard
shall be given to you and Seller in writing within said 10-business-day
period. Failure of Buyer to give such notice within said period shall
constitute an election by Buyer to accept Seller's proposal to terminate
this transaction. If Buyer elects option (y), the Escrow shall be
extended for such period of time, not exceeding fifteen (15) business
days beyond the date on which Buyer shall have elected option (y), as
Buyer may require to pursue such option. If Buyer elects option (y),
but is unsuccessful in causing the aforesaid policy of title insurance
to be issued within the aforesaid 15-business-day period, or if Buyer
elects option (z), then, in either such event, the Escrow shall
terminate without further liability on the part of either party (except
that Buyer's obligations under Paragraph 8(c) shall survive such
termination), all documents and moneys deposited therein by either party
shall be returned to such party, and Buyer and Seller shall pay equally
any escrow cancellation charges for escrow work done to the date of
termination.
8. Contingent Matters
(a) Contingency Period. Buyer shall have the right to
perform and/or cause qualified professionals to perform such soils
studies, environmental studies, surveys, structural inspections,
engineering analyses, and other inspections, analyses and studies
(collectively, "inspections") regarding the Subject Property as Buyer
may deem necessary or desirable. If Buyer deems the results of the
inspections unacceptable to Buyer, in Buyer's reasonable judgment, Buyer
shall have the right to terminate the Escrow at any time prior to
expiration of the Contingency Period without further liability on the
part of either party (except that Buyer's obligations under paragraph
8(c) shall survive such termination), all documents and moneys deposited
therein by either party shall be returned to such party, and Buyer shall
pay any escrow cancellation charges for escrow work done to the date of
termination. The period (the "Contingency Period") to conduct such
inspections shall expire thirty (30) days after the Escrow Opening Date.
After expiration of the Contingency Period Buyer shall not have the
right to terminate this Escrow for any reason other than a material
default by Seller (except as otherwise provided in Paragraphs 6 and 7
hereof).
(b) Plans and Survey. Not more than five (5) days after
the Escrow Opening Date, Seller shall furnish to Buyer a copy of "as
built" plans (the "Plans") for the building located on the Subject
Property if any such plans are in the possession or under the control of
Seller. Additionally, Buyer, at Buyer's sole cost and expense, may
obtain a survey (the "Survey") of the Subject Property from a licensed
engineer or surveyor. If Buyer deems the Plans and/or the Survey
unacceptable to Buyer, in Buyer's reasonable judgment, Buyer shall have
the right to terminate the Escrow prior to the expiration of the
Contingency Period as provided in the foregoing subparagraph (a).
(c) Access to Property. Seller, upon reasonable advance
notice from Buyer, shall make the Subject Property available for
inspection pursuant to subparagraph (a) hereof; provided, however, that,
prior to any entry onto the Subject Property for purposes of any such
inspection by Buyer or any agent, employee, contractor, subcontractor or
other representative of Buyer which involves physical testing of the
Subject Property (e.g., soil borings, concrete corings, etc.), Buyer
shall furnish Seller with evidence satisfactory to Seller that Buyer (or
a contractor or subcontractor of Buyer) has in effect, and will have in
effect at all relevant times, with a reputable insurance company
licensed to do business in State of California, a policy of public
liability insurance, with a combined single limit of liability of not
less than $1,000,000 that names Seller as an additional insured
thereunder and provides coverage to Seller with respect to any claims
that may be asserted against Seller by reason of any bodily injury or
property damage that may occur in connection with any act or omission of
Buyer or any agent, employee, contractor, subcontractor or other
representative Buyer on or about the Subject Property in the course or
as a result of any such physical testing of the Subject Property by
Buyer or any agent, employee, contractor, subcontractor or other
representative of Buyer or in the course or as a result of any activity
in connection therewith or any condition created thereby. In addition,
and apart from such insurance, Buyer shall indemnify, defend (with
counsel reasonably satisfactory to Seller) and hold Seller harmless
against any loss or damage to, or claim of lien upon, the Subject
Property or any liability to any party for personal injury or property
damage that may result from any inspection or any act or omission of
Buyer or any agent, employee, contractor, subcontractor or other
representative of Buyer in connection therewith.
9. Closing Date. Except as otherwise provided herein, and
unless you are otherwise instructed jointly by the parties in writing,
the sale and purchase of the Subject Property shall be consummated
through the Escrow (a) ninety (90) days after the Escrow Opening Date or
(b) such later date, if any, as may be required in order to give effect
to the provisions of Paragraph 6 (pertaining to the Title Report), or
Paragraph 7 (pertaining to the issuance of a policy of title insurance).
Notwithstanding the foregoing, Seller shall have the right to extend the
Escrow for an additional period of sixty (60) days upon prior written
notice to Buyer and to you given not less than five (5) days prior to
the previously scheduled Closing Date. The day on which the sale and
purchase of the Subject Property hereunder shall be consummated is
herein referred to as "the Closing Date."
10. Closing of Escrow. Provided you have received the funds
and documents that are to be delivered to you hereunder and are able to
procure the policy of title insurance provided for in Paragraph 7, you
are authorized and instructed to close the Escrow on the Closing Date by
simultaneously doing the following:
(a) Inserting into the appropriate spaces in the Grant
Deed (to the extent not already inserted when the Grant Deed is
delivered to you) the name of Buyer or any nominee named by Buyer
pursuant to Paragraph 5;
(b) Recording the Grant Deed and causing the same to be
delivered to the grantee(s) thereunder;
(c) Delivering to Seller your check (or wire-
transferring funds as directed by Seller, if so requested by Seller,
with any necessary information required in connection therewith being
furnished to you by Seller) in an amount equal to (i) the Purchase
Price, plus (ii) the amount of any other credits to the escrow account
of Seller which are provided for herein or otherwise made by you
hereunder, less only (iii) the amount of any charges to the escrow
account of Seller which are expressly provided for herein. You are
hereby instructed to issue and deliver separate checks to Mac Donald
Construction and the Trust. The net proceeds of Escrow shall be
allocated between Mac Donald Construction and the Trust in proportion to
their respective percentage interests in the Subject Property. However,
all funds needed to pay the balance (principal and interest) owed to IBG
Palm Associates under its note secured by deed of trust covering the
Subject Property shall be charged solely against that portion of the
proceeds due Mac Donald Construction and the Trust shall bear none of
the cost of such note;
(d) Returning to Buyer funds equal to the amount of any
unapplied credit remaining in Buyer's escrow account hereunder; and
(e) Delivering to Buyer the original of the policy of
title insurance provided for herein (after the same shall have been
issued).
11. Escrow Prorations. Under the terms of its existing lease
covering the Subject Property, Buyer has the obligation to pay all
property taxes. Accordingly, property taxes do not have to be prorated.
You are instructed to prorate between Seller and Buyer, as of the
Closing Date, any insurance of Seller assumed by Buyer and the rent due
on the existing lease to Buyer. Prior to the Closing Date, Seller shall
deliver to Escrow and to Buyer a statement of rent showing the date to
which rent has been paid. Buyer agrees to make all rent and other
payments due under its existing lease until the Close of Escrow.
12. Payment of Closing Costs. You are instructed to charge
the premium for the policy of title insurance that is to be issued in
connection with this transaction (a) to Seller to the extent of the cost
of CLTA owner's coverage with liability in the amount of the Purchase
Price, and (b) to Buyer to the extent of any excess cost attributable to
ALTA coverage and/or any endorsements requested by Buyer. You are
instructed to charge Seller for the documentary transfer tax payable
upon recordation of the Grant Deed and for one-half of your escrow fee.
You are instructed to charge Buyer for the recording charges to record
the Grant Deed and for one-half of your escrow fee. All other closing
costs shall be allocated as is customary in Orange County.
13. Incorporation of General Escrow Provisions. The general
escrow provisions set forth in your printed standard-form escrow
instructions, a copy of which provisions is attached hereto as Exhibit
B, are hereby incorporated herein. In the event of any conflict between
the provisions set forth herein and said general escrow provisions in
your printed standard-form escrow instructions, the provisions set forth
herein shall govern and take precedence.
14. Representations and Warranties.
(a) Seller. (i) Mac Donald Construction is a
corporation duly organized and validly existing under the laws of the
State of California and has all necessary power to execute and deliver
these Escrow Instructions and perform all of its obligations hereunder.
The execution, delivery and performance of these Escrow Instructions
have been duly authorized by all requisite action on the part of Mac
Donald Construction and these Escrow Instructions constitute the legal,
valid and binding obligation of Mac Donald Construction enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency
and similar laws affecting creditors' rights generally. Neither the
execution and delivery of these Escrow Instructions by Mac Donald
Construction nor the performance of its obligations hereunder will
conflict with, result in the violation of, or constitute a default
under, any provision of Mac Donald Construction's articles of
incorporation or by-laws as amended to date, any order or decree of any
court or governmental entity relating to Mac Donald Construction, any
indenture, mortgage or other agreement or instrument to which Mac Donald
Construction is a party or by which Mac Donald Construction may be
bound, or, to the best of Mac Donald Construction's knowledge, any law,
ordinance or regulation.
(ii) The Trust is a testamentary trust created under the
laws of the State of California and the Trustees thereof have all
necessary power to execute and deliver these Escrow Instructions and
perform all of their obligations hereunder. These Escrow Instructions
constitute the legal, valid and binding obligation of the Trust
enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency and similar laws affecting creditors' rights
generally. Neither the execution and delivery of these Escrow
Instructions by the Trustees of the Trust nor the performance of their
obligations hereunder will conflict with, result in the violation of, or
constitute a default under, the trust instrument or court order creating
the Trust, any order or decree of any court or governmental entity
relating to the Trust, any indenture, mortgage or other agreement or
instrument to which the Trustees are a party or by which the Trustees
may be bound, or, to the best of Trustees' knowledge, any law, ordinance
or regulation.
(iii) There are no pending or, to the best of Seller's
knowledge, any contemplated actions, suits, arbitrations, claims or
proceedings, at law or in equity, affecting all or any portion of the
Subject Property or in which Seller is or will be a party by reason of
Seller's ownership of the Subject Property, including, but not limited
to, judicial, municipal, or administrative proceedings in eminent domain
or alleged building code, health and safety or zoning violations,
alleged to have occurred on the Subject Property or by reason of the
condition or use of the Subject Property.
(iv) Seller has not received any written notice of any
eminent domain, environmental, zoning or other land use regulation
proceedings adversely affecting the Subject Property or any part
thereof. Seller has not received any written notice of any special
assessment proceedings affecting the Subject Property.
(v) There are no leases, contracts or agreements
affecting the Subject Property that have been entered into by Seller
other than the current lease to Buyer.
(b) Buyer. Buyer is a corporation duly organized and
validly existing under the laws of the State of California and has all
necessary power to execute and deliver these Escrow Instructions and
perform all of its obligations hereunder. The execution, delivery and
performance of these Escrow Instructions have been duly authorized by
all requisite action on the part of Buyer and these Escrow Instructions
constitute the legal, valid and binding obligation of Buyer enforceable
in accordance with its terms, subject to applicable bankruptcy,
insolvency and similar laws affecting creditors' rights generally.
Neither the execution and delivery of these Escrow Instructions by Buyer
nor the performance of its obligations hereunder will conflict with,
result in the violation of, or constitute a default under, any provision
of Buyer's articles of incorporation or by-laws as amended to date, any
order or decree of any court or governmental entity relating to Buyer,
any indenture, mortgage or other agreement or instrument to which Buyer
is a party or by which Buyer may be bound, or, to the best of Buyer's
knowledge, any law, ordinance or regulation.
15. Incorporation of Exhibits. All exhibits referenced herein
as being attached hereto are hereby incorporated herein and made a part
hereof as though set forth herein verbatim.
16. Condemnation of Subject Property. If, at any time prior
to the close of Escrow, title to all or a material part of the Subject
Property is taken by eminent domain, or proceedings for such taking are
formally commenced (by means, specifically, of the obtaining of a court
order for immediate possession, the adoption of an official resolution
of condemnation or the making of a statutory offer of compensation based
on an appraisal) by any governmental authority having the power of
eminent domain, or all or a material part of the Subject Property is
destroyed by any cause whatsoever, then Buyer shall have the option to
terminate this transaction by giving written notice to you and Seller of
an election to do so within fifteen (15) days after the occurrence of
such taking by eminent domain, or such formal commencement of
proceedings for such a taking or the occurrence of such destruction. If
Buyer exercises an option (if applicable) to terminate this transaction
pursuant to the first sentence of this paragraph, then the Escrow shall
terminate without further liability on the part of either party (except
that Buyer's obligations under Paragraph 8(c) shall survive such
termination), all documents and moneys deposited therein by either party
shall be returned to such party, and Buyer and Seller shall pay equally
any escrow cancellation charges for escrow work done to the date of
termination. If there is a taking by eminent domain or the formal
commencement of proceedings for such a taking or destruction of the
Subject Property, as contemplated above, and, in any case, Buyer does
not exercise the option to terminate this transaction pursuant to the
first sentence of this paragraph, then the Escrow shall close on the
Closing Date, in accordance with the terms hereof, without any reduction
of the Purchase Price hereunder, and any applicable eminent domain
compensation or insurance proceeds, if any, shall be released (or
assigned if not yet collected) to Buyer through the Escrow. In the
event that, prior to the close of Escrow, title to a part of the Subject
Property that is less than all or a material part thereof is taken by
eminent domain, or proceedings for such a taking are formally commenced,
or less than all or a material part of the Subject Property is
destroyed, this transaction shall proceed in accordance with its terms,
and the Escrow shall be closed on the Closing Date in accordance with
the terms hereof, without any reduction of the Purchase Price hereunder,
provided only that any applicable eminent domain compensation or
insurance proceeds, shall be released (or assigned if not yet collected)
to Buyer through the Escrow. The provisions of this paragraph are not
intended to release the parties from their respective obligations
regarding condemnation or destruction of the Subject Property set forth
in the existing lease.
17. Additional Covenants and Agreements. The following
provisions deal with matters of agreement between Seller and Buyer with
respect to which you shall have no responsibility and with which you
need not be concerned:
(a) SELLER'S DISCLAIMER OF WARRANTIES. EXCEPT AS
OTHERWISE EXPRESSLY SET FORTH HEREIN, IT IS AGREED THAT THE SUBJECT
PROPERTY SHALL BE CONVEYED BY SELLER AND ACCEPTED BY BUYER AS IS AND
WITH ALL FAULTS AND THAT SELLER IS MAKING NO REPRESENTATIONS OR
WARRANTIES REGARDING THE CONDITION OF TITLE TO THE SUBJECT PROPERTY, NOR
REGARDING THE DEVELOPMENT POTENTIAL OF THE SUBJECT PROPERTY OR ITS
SUITABILITY FOR ANY PARTICULAR USE OR PURPOSE, NOR REGARDING COMPLIANCE
OF THE SUBJECT PROPERTY OR THE USE THEREOF WITH ANY APPLICABLE ZONING,
ENVIRONMENTAL, HAZARDOUS WASTE OR OTHER LAWS OR ORDINANCES, NOR
REGARDING THE PHYSICAL CONDITION OF THE SUBJECT PROPERTY, INCLUDING
SOILS AND GEOLOGY, OR OF ANY STRUCTURES OR OTHER IMPROVEMENTS
CONSTITUTING A PART THEREOF, NOR REGARDING THE SIZE OR DIMENSIONS OF THE
SUBJECT PROPERTY, NOR REGARDING ANY LICENSES OR PERMITS THAT BUYER MAY
NEED TO OBTAIN IN ORDER TO OWN, LEASE OR USE THE SUBJECT PROPERTY IN
ACCORDANCE WITH ITS EXISTING OR ANY CONTEMPLATED USES, NOR REGARDING
WHETHER THE SUBJECT PROPERTY MAY BE SITUATED IN AN EARTHQUAKE FAULT ZONE
AS DESIGNATED UNDER SECTIONS 2621-2625, INCLUSIVE, OF THE CALIFORNIA
PUBLIC RESOURCES CODE, NOR REGARDING WHETHER THE SUBJECT PROPERTY MAY BE
SITUATED IN A FLOOD HAZARD ZONE AS DESIGNATED ON ANY SPECIAL FLOOD ZONE
AREA MAP OF THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, NOR
REGARDING ANY OTHER MATTER OR THING WHATSOEVER, IT BEING UNDERSTOOD THAT
BUYER HAS OBTAINED OR WILL OBTAIN ITS OWN INDEPENDENT ASSURANCES AS TO
ALL SUCH MATTERS TO SUCH EXTENT AS BUYER, IN ITS DISCRETION, HAS DEEMED
NECESSARY OR APPROPRIATE. BUYER ACKNOWLEDGES THAT IT IS ENTERING INTO
THIS PURCHASE ON THE BASIS OF BUYER'S OWN INVESTIGATION OF THE CONDITION
OF THE SUBJECT PROPERTY, AND BUYER ASSUMES THE RISK THAT ADVERSE
CONDITIONS MAY NOT HAVE BEEN REVEALED BY ITS OWN INVESTIGATION. EXCEPT
AS OTHERWISE EXPRESSLY SET FORTH HEREIN, BUYER FURTHER ACKNOWLEDGES THAT
SELLER, SELLER'S AGENTS AND OTHER PERSONS ACTING ON BEHALF OF SELLER,
HAVE MADE NO REPRESENTATION OR WARRANTY OF ANY KIND IN CONNECTION WITH
ANY MATTER RELATING TO THE CONDITION, VALUE, FITNESS OR USE OF THE
SUBJECT PROPERTY UPON WHICH BUYER HAS RELIED DIRECTLY OR INDIRECTLY FOR
ANY PURPOSE. BUYER HEREBY WAIVES, RELEASES, REMISES, ACQUITS AND
FOREVER DISCHARGES SELLER, AND SELLER'S AGENTS OR ANY OTHER PERSON
ACTING ON BEHALF OF SELLER, OF AND FROM ANY CLAIMS, ACTIONS, CAUSES OF
ACTION, DEMANDS, RIGHTS, DAMAGES, LIABILITIES, COSTS, EXPENSES OR
COMPENSATION WHATSOEVER, DIRECT OR INDIRECT, KNOWN OR UNKNOWN, FORESEEN
OR UNFORESEEN, WHICH BUYER NOW HAS OR WHICH MAY ARISE IN THE FUTURE ON
ACCOUNT OF OR IN ANY WAY CONNECTED WITH THE CONDITION OF THE SUBJECT
PROPERTY OR ANY LAW OR REGULATION APPLICABLE THERETO. IN CONNECTION
WITH THE FOREGOING RELEASE, BUYER HEREBY WAIVES THE BENEFITS OF SECTION
1542 OF THE CIVIL CODE OF THE STATE OF CALIFORNIA WHICH PROVIDES AS
FOLLOWS: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN ITS FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY
AFFECTED HIS SETTLEMENT WITH THE DEBTOR."
(b) Survival of Representations, Warranties and
Covenants. All covenants made by each party hereunder, that, by their
terms, are to be wholly or partly performed after the Closing Date, and
all representations and warranties and disclaimers thereof made by each
party hereunder, shall survive the consummation of the sale and purchase
of the Subject Property hereunder and shall continue thereafter to be
fully effective and binding in accordance with their terms.
(c) Attorneys' Fees. In the event either party
commences an action to determine or enforce such party's legal rights
arising hereunder or in connection herewith, the prevailing party in
such action (as determined by the court) shall be entitled to recover
therein such reasonable attorneys' fees and costs as the prevailing
party may incur in connection therewith.
(d) Time of the Essence. Time is of the essence in the
performance of all obligations and the satisfaction of all conditions
set forth herein.
(e) Construction. Neither these Escrow Instructions nor
any provision thereof shall be construed or interpreted against any
party on the basis that such party or such party's attorney drafted the
Escrow Instructions or provisions.
(f) Joint and Several Liability. In the event that any
party hereto comprises more than one person or entity, all such persons
and entities shall be jointly and severally liable for the performance
of all obligations of such party hereunder.
(g) Amendments. These Escrow Instructions and the
contract of purchase and sale between the parties embodied herein may be
amended only by means of a writing signed by both parties hereto.
(h) Successors and Assigns. These Escrow Instructions
shall be binding on and inure to the benefit of the parties hereto and
their respective successors and assigns.
(i) Governing Law. These Escrow Instructions and the
rights of the parties hereunder shall be governed by the laws of the
State of California.
18. Exchange. Buyer agrees to accommodate Seller (or either
of them) in effecting a tax deferred exchange, including but not limited
to a non-simultaneous exchange, under Internal Revenue Code Section 1031
so long as such exchange shall be at no cost or expense to Buyer.
Seller (or either of them) shall have the right, expressly reserved
here, to elect this tax-deferred exchange at any time before the
Closing; however, Seller and Buyer agree that consummation of this
transaction is not conditioned on the exchange. If Seller (or either of
them) elects to effect a tax-deferred exchange, Buyer agrees, subject to
its reasonable approval, to execute additional escrow instructions,
documents, agreements or instruments to effect the exchange. In no
event, however, shall Buyer be required to make a total cash payment for
the exchange property, including all costs and expenses of that
purchase, in excess of the cash payment that would otherwise have been
made to the Seller had Buyer completed the purchase of the Subject
Property from Seller without participating in an exchange, nor shall
Buyer be required to assume any obligation, promissory note or other
evidence of indebtedness in connection with the acquisition of exchange
property which would impose any personal liability on Buyer for its
payment. Seller agrees to indemnify, defend (with counsel reasonably
satisfactory to Buyer) and hold Buyer harmless from any liability,
damages or costs of whatsoever kind or nature that may arise from
Buyer's participation in the exchange.
19. Commissions. Buyer and Seller each represent and warrant
to each other that they have not retained a real estate broker or finder
in connection with this transaction. Each party hereto hereby agrees
that any obligations undertaken by such party to pay any brokers'
commissions, finders' fee or similar compensation in connection with
this transaction shall be the obligation and responsibility of such
party alone, and such party hereby agrees to defend and indemnify the
other party hereto and the other party's successors and assigns against
any such obligation and responsibility and against any loss, liability,
damage or expense (including reasonable attorneys' fees and expenses)
that may result from any assertion thereof or claim therefor.
20. Notices. Any notice or other communication (hereinafter,
"notice") that either party hereto may desire or be required to give to
the other party, or to you, as escrow holder of the Escrow, hereunder or
in connection herewith shall be in writing and may be delivered by means
of a messenger service, a national courier service or mail.
Any notice delivered by means of a messenger service shall be
delivered in hand to the party to be notified or to any receptionist or
other person of suitable age and discretion that may be found at the
principal business office of such party or at the address for giving
national-courier-service notices to such party hereunder and shall be
deemed given when so delivered, or when the party to be notified or a
receptionist or other person of suitable age and discretion found at the
principal business office of such party or at the address for giving
national-courier-service notices to such party hereunder refuses
delivery thereof during business hours on a business day.
Any notice delivered by means of a national courier service
shall be sent by means of the "next-day" or "next-business-day" delivery
service of such courier service and shall be deemed given on the first
business day on which it would normally be expected to be in the hands
of the addressee pursuant to such service.
Any notice delivered by mail shall be sent by certified or
registered mail, return receipt requested, and shall be deemed given on
the third day following the date of deposit of such notice in the U. S.
mails, with all postage and fees prepaid, (or, if such third day is not
a business day on which mails are delivered by the Postal Service, then
on the next business day thereafter on which mails are so delivered).
Any notice delivered by courier service or mail shall be
addressed as follows:
If to Seller:
G.A. Mac Donald Construction Co. Inc.
0000 Xxxxx Xxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
With a simultaneous copy being sent in the
same manner to:
Xxxxx Xxxx, Esq.
Xxxxxx, Milliken, Clark, O'Hara & Xxxxxxxxx
000 Xxxxx Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
If to Buyer:
Xxxxxxx Manufacturing Co. Inc.
0000 Xxxxxx Xxxxx
Xxxxx 000
X.X. Xxx 00000
Xxxxxxxxxx, Xxxxxxxxxx 00000-0000
Attn: Xxxxx Xxxxxx
With a simultaneous copy being sent in the
same manner to:
Xxxx X. Xxxxxxxx, Esq.
Shartsis, Xxxxxx & Xxxxxxxx
Xxx Xxxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
If to you, as escrow holder of the Escrow, to your address set
forth on the first page hereof.
Any address for notice to a party may be changed at any time
by written notice given to the other party and to you in the manner
provided for above. For purposes hereof, the term, "business day" shall
mean any Monday through Friday, except for legal holidays observed in
the locality of the addressee of a notice, and the term, "business
hours" shall mean the hours of 9:00 a.m. to 5:00 p.m., local time of the
addressee of a notice.
21. Counterparts. Subject to the provisions of Paragraph 1
regarding conditions precedent to the effectiveness of these Escrow
Instructions, these Escrow Instructions may be executed in counterparts,
each of which shall be deemed an original hereof, binding upon the party
whose signature appears thereon, and all of which together shall
constitute one and the same Agreement.
IN WITNESS WHEREOF, the parties have caused these Escrow
Instructions to be executed as of the 16th day of
August, 1996.
G.A. MAC DONALD CONSTRUCTION CO. INC.
By
--------------------------------------
Its
--------------------------------------
--------------------------------------
XXXX X. XXX XXXXXX, Trustee Under The
Will of Xxxxxx X. Xxx Xxxxxx, Deceased
--------------------------------------
XXXXX X. XXX XXXXXX, Trustee Under The
Will of Xxxxxx X. Xxx Xxxxxx, Deceased
"Seller"
XXXXXXX MANUFACTURING CO., INC.
By /s/Xxxxx Xxxxxx
-----------------------------------
Its CFO
--------------------------------
"Buyer"
PARCEL 2, IN THE CITY OF BREA, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS
SHOWN ON A MAP FILED IN BOOK 241, PAGES 34, 35 AND 36 OF PARCEL MAPS, IN
THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
EXCEPT THEREFROM A FIFTY (50) PERCENT OF ALL OIL, GAS AND HYDROCARBON
SUBSTANCES IN AND UNDER SAID PROPERTY, AS GRANTED TO XXX. X. X. XXXXXX,
IN DEED RECORDED MAY 23, 1958 IN BOOK 4294, PAGE 486, OFFICIAL RECORDS,
BUT WITHOUT THE RIGHT OF SURFACE ENTRY TO A DEPTH OF 500 FEET, AS
RELEASED BY DEED DATED JUNE 19, 1963 AND RECORDED JULY, 1963 IN BOOK
6613, PAGE 540, OFFICIAL RECORDS.
Standard Escrow Provisions
(To Be Attached)
