40332-1
TIAA RE #1989
PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS
THIS PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS ("Agreement") is made as of
the 26th day of July, 2002, by and between Teachers Insurance and Annuity
Association of America, a New York corporation, with its offices at 000 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("Seller") and Bedford Property Investors,
Inc., a Maryland corporation, with an office at 000 Xxxxxxxxx Xxxxxx, Xxxxxxxxx,
XX 00000 ("Purchaser").
RECITALS
A. Seller owns the real property commonly known as Ringwood
Court located in San Jose, California, as more particularly
described in Exhibit A attached hereto and incorporated
herein (the "Land"). The improvements and associated parking
areas located on the Land are the "Improvements". The
Land and the Improvements are collectively, the "Real Property".
B. The Land, the Improvements and all of Seller's rights,
privileges, easements and appurtenances to the Land, all personal
property and equipment to be conveyed by Seller hereunder and
fixtures owned by Seller and located on the Real Property,
and all Intangible Property owned by Seller and used in connection
with the operation of the Real Property is the "Property."
C. Purchaser desires to purchase the Property from Seller,
and Seller desires to sell the Property to Purchaser, on the
terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the Recitals set forth above,
and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree
as set forth below.
ARTICLE I
DEFINED TERMS
Unless the context otherwise requires, or a term is defined elsewhere in
this Agreement, the defined terms set forth below will have the meanings set
forth below.
1.1 Assignment and Assumption Agreement. The term "Assignment
and Assumption Agreement" means an agreement in the form attached
hereto as Exhibit B.
1.2 Business Day. The term "Business Day" means any day
other than a Saturday or Sunday or legal holiday in
the State of California.
1.3 Cash. The term "Cash" means (i) currency of the United
States of America; (ii) cashier's check(s) currently dated and
payable to Escrow Agent or Seller, as required under this Agreement,
drawn and paid through a California banking institution, tendered to
Escrow Agent or Seller, as required under this Agreement at
least one additional Business Day before funds are required to be
available in Escrow; or (iii) an amount credited by wire transfer
into Escrow Agent's or Seller's bank account as required under
this Agreement.
1.4 Close of Escrow or Closing. The terms "Close of Escrow" or
"Closing" mean the consummation of the purchase of the
Property by Purchaser from Seller and the recordation of
Seller's Grant Deed in accordance with the terms and provisions
of this Agreement.
1.5 Closing Date. The term "Closing Date" means the date on
which the Closing will be held for the sale of the Property as set
forth in Section 2.2 of this Agreement.
1.6 Contracts. The term "Contracts" means any contracts relating
to the operation of the Property other than the Leases, including
without limitation, furniture and equipment leases, property
management agreements, service agreements, maintenance contracts,
landscape contracts, and rental listing and marketing agreements,
the term of which extends beyond midnight on the day preceding the
Closing Date.
1.7 Deposit. The term "Deposit" means the Deposit
described in Section 2.1.1 of this Agreement.
1.8 Due Diligence Period. The term "Due Diligence Period" means
the period beginning on the Effective Date and terminating on
the date which is 30 days (or if such date is not a Business Day,
the next Business Day) after the Effective Date.
1.9 Effective Date. The term "Effective Date" means the date set
forth on the first page of this Agreement.
1.10 Escrow. The term "Escrow" means the escrow opened by
Escrow Agent pursuant to the terms of this Agreement.
1.11 Escrow Agent. The term "Escrow Agent" means First American
Title Insurance Company, 0000 Xx. Xxxxxx Xxxx., Xxxxx 000, Xxxxxx
Xxxxx, XX 00000, Attention: Xxxxxx Xxxxxxxx, Fax No. (000) 000-0000.
1.12 Hazardous Materials. The term "Hazardous Materials"
means any substance, material or waste which is or becomes (i)
regulated by any local or regional governmental authority, the
State of California or the United States Government as a hazardous
waste; (ii) is defined as a "solid waste," "sludge," "hazardous
waste," "extremely hazardous waste," "restricted hazardous waste,"
"Non-RCRA hazardous waste," "RCRA hazardous waste," "recyclable
material," under any federal, state or local statute,
regulation, or ordinance, including, without limitation,
Sections 25115, 25117, 25117.9, 25120.2, 25120.5 or 25122.7,
25140, 25141 of the California Health and Safety Code; (iii)
defined as a "Hazardous Substance" under Section 25316 of
the California Health and Safety Code; (iv) defined as
a "Hazardous Material," "Hazardous Substance," or "Hazardous
Waste" under Section 25501 of the California Health and Safety
Code; (v) defined as a "Hazardous Substance" under Section
25281 of the California Health and Safety Code; (vi)
asbestos; (vii) petroleum products, including, without
limitation, petroleum, gasoline, used oil, crude oil, waste
oil and any fraction thereof, natural gas, natural gas
liquefied, methane gas, natural gas, or synthetic fuels,
(viii) materials defined as hazardous or extremely hazardous
pursuant to the California Code of Regulations; (ix) pesticides,
herbicides and fungicides; (x) polychlorinated biphenyls; (xi)
defined as a "Hazardous Substance" pursuant to Section 311 of
the Federal Water Pollution Control Act (33 U.S.C. Section
1251 et seq.); (xii) defined as a "Hazardous Waste" pursuant
to Section 1004 of the Federal Resource Conservation and
Recovery Act, 42 U.S.C. Section 6901 et seq., (xiii)
defined as a "Hazardous Substance" or "Mixed Waste" pursuant to
Section 101 of the Comprehensive Environmental Response
Compensation and Liability Act, 42 U.S.C. Section 9601
et seq., and regulations promulgated thereunder; (xiv)
defined as a "Hazardous Substance" pursuant to Section 401.15
of the Clean Water Act, 40 C.F.R. 116; (xv) defined as an
"Extremely Hazardous Substance" pursuant to Section 302 of
the Superfund Amendments and Reauthorizations Act of 1986,
42 U.S.C. Section 11002 et seq; or (xvi) defined as
"medical waste" pursuant to Section 25023.2 of the California
Health and Safety Code, Chapter 6.1 (Medical Waste Management Act).
1.13 Intangible Property. The term "Intangible Property"
means the Contracts, all assignable warranties and guarantees
issued in connection with the Improvements or Personal Property
and all transferable consents, authorizations, variances or
waivers, licenses, permits and approvals from any governmental
or quasi-governmental agency, department, board, commission,
bureau or other entity or instrumentality solely with respect to
the Land or Improvements, as further described in the
Assignment and Assumption Agreement.
1.14 Leases. The term "Leases" means the lease(s) more
particularly described in Exhibit J.
1.15 Natural Hazard Disclosure Statement. The term "Natural
Hazard Disclosure Statement" means the disclosure statement
in substantially the form set forth in Exhibit C attached hereto
to be provided from Seller to Purchaser pursuant to Section 5.3
of this Agreement.
1.16 Opening of Escrow. The term "Opening of Escrow" means the date
Escrow Agent executes the Consent of Escrow Agent attached hereto.
1.17 Personal Property. The term "Personal Property" means any
furniture, fixtures, machinery, apparatus and equipment currently
owned by Seller and used in the operation, repair and maintenance
of the Land and Improvements and situated thereon, subject
to any deletions, replacements and additions in the ordinary
course of Seller's business during the Escrow.
1.18 Property. The term "Property" shall have the meaning set
forth in Recital B of this Agreement.
1.19 Property Documents. The term "Property Documents" means the
documents relating to the Property described in Section 3.1 below.
1.20 Purchase Price. The term "Purchase Price" means the
total consideration to be paid by Purchaser to Seller for the
purchase of the Property as set forth in Section 2.1 of this Agreement.
1.21 Title Company. The term "Title Company" means First American
Title Insurance Company.
ARTICLE 2
SALE OF PROPERTY AND PURCHASE PRICE
2.1 Purchase Price. The Purchase Price for the Property shall
be FORTY MILLION AND 00/100 Dollars ($40,000,000). The
Purchase Price shall be payable as set forth below.
2.1.1 Buyer's Deposit. Upon the Opening of Escrow, Purchaser
shall deliver to Escrow Agent Cash in the amount of THREE
HUNDRED THOUSAND and 00/100 Dollars ($300,000) (the
"Deposit"). Purchaser's failure to deliver to Escrow Agent
its Notice of Approval shall entitle Seller to terminate
this Agreement and if Seller so terminates this Agreement,
Seller shall be entitled to receive the Deposit
(together with interest accrued thereon) as liquidated
damages for Purchaser's default under this paragraph 2.1.1,
in which case, neither Seller nor Purchaser shall have any
further rights or obligations hereunder, except those which
expressly survive the termination hereof. Escrow Agent
shall place the Deposit in an interest-bearing account for
the benefit of Purchaser. The Deposit shall be
applicable to the Purchase Price. Upon Purchaser's
delivery of a Notice of Approval, the Deposit shall be
nonrefundable to Purchaser unless otherwise specifically
provided in this Agreement.
2.1.2 Balance Due at Close. Purchaser shall deposit at
least one (1) Business Day prior to the Close of Escrow,
Cash in the amount of the Purchase Price less the Deposit,
subject to prorations under Section 8.1.
2.2 Closing Date. Escrow shall close on the date which is 15 days
(or if such date is not a Business day, then the next Business Day)
after the last day of the Due Diligence Period. ("Closing Date").
2.3 Opening of Escrow. Within two (2) Business Days after
execution of this Agreement, Purchaser and Seller shall open
Escrow by delivering three originals of this Agreement executed
by them to Escrow Agent. Upon receipt thereof, Escrow Agent
shall execute the Consent of Escrow Agent attached hereto and
return one (1) fully executed original of this Agreement and
the Consent to each of Purchaser and Seller.
ARTICLE 3
DUE DILIGENCE PERIOD
3.1 Review and Approval of Documents and Materials. Within 5
business days after the Effective Date, Seller shall deliver to
Purchaser or otherwise make available for Purchaser's inspection,
the documents and materials respecting the Property in Seller's
possession (other than proprietary or privileged information),
which includes a list or description of any personal property
to be conveyed (the "Property Documents").
3.2 Due Diligence Period. Purchaser shall have the right during
the Due Diligence Period to analyze the feasibility of the
acquisition and ownership of the Property and determine, in
Purchaser's sole and absolute discretion, that the Property is
suitable for acquisition by Purchaser. During the Due Diligence
Period, Purchaser shall have the right to review and analyze the
impact on the Property of any and all applicable government
ordinances, rules and regulations, the effect of any pending or
threatened governmental actions pertaining to the Property and
review and analyze other matters Purchaser deems relevant in
Purchaser's sole and absolute discretion, including the
economic and marketing feasibility of the Property. Purchaser's
analysis and inspection of the Property shall include, but not
be limited to, all zoning and land use matters relating to the
Property, all environmental aspects of the Property, and
performance by Purchaser or on Purchaser's behalf of surveys
and Phase I environmental studies with respect to the
Property. Notwithstanding the foregoing, if Purchaser wishes to
engage in a Phase II environmental study or other environmental
study or other testing or sampling of any kind with respect to
soils or groundwater or other studies which would require test
boring of or other intrusions into the Property, or which
testing might otherwise damage or disturb any portion of
the Property, Purchaser shall obtain Seller's prior consent
thereto, which consent shall be in Seller's reasonable
discretion, and Purchaser shall execute an agreement with
Seller pertaining to such study in form and content satisfactory
to Seller in Seller's reasonable discretion. To the extent
Seller approves of any such testing, Purchaser shall be
responsible for, and shall dispose of, all such test samples
in accordance with applicable law at no cost or liability to Seller.
3.3 Notice of Approval or Disapproval. If Purchaser approves
of its feasibility studies during the Due Diligence Period, Purchaser
shall deliver to Seller and Escrow Agent, prior to the expiration
of the Due Diligence Period written notice of approval
("Notice of Approval"). If, for any reason, Purchaser determines
within the Due Diligence Period that, it is not feasible for
Purchaser to acquire and own the Property, Purchaser may
terminate this Agreement and cancel Escrow by delivering written
notice of cancellation ("Notice of Cancellation") to Escrow
Agent and Seller prior to the expiration of the Due Diligence
Period. Upon receipt of such notice, Escrow Agent shall
immediately refund Purchaser's Deposit, along with any
accrued interest thereon, to Purchaser. The failure of
Purchaser to deliver a Notice of Cancellation or Notice of
Approval prior to the termination of the Due Diligence
Period shall constitute Purchaser's disapproval of its
feasibility studies (and a deemed Notice of Cancellation).
Subject to Purchaser's rights under Section 4.1.1, Purchaser's
delivery of a Notice of Approval shall constitute unconditional
approval of all aspects of the Property. Any Notice of
Approval must be unconditional or it will be deemed void.
3.4 Confidentiality. Except as provided below, the
documents and information made available to
Purchaser by Seller under this Agreement and the
results of any environmental testing performed by
Purchaser should not be released or disclosed
without the prior written consent of Seller unless
and until the Closing occurs hereunder. In the
event the Closing does not occur, Purchaser shall
keep all information relating to the Property
confidential and return all Property Documents to
Seller, unless such information is or becomes part
of the public domain through no fault of Purchaser
or its representatives or consultants.
Notwithstanding the foregoing, Purchaser shall be
entitled to disclose such information without
Seller's consent to persons with a legitimate need
for such information such as consultants, lenders,
investors and attorneys who are involved in the
transactions contemplated by this Agreement provided
that Purchaser advises all recipients that such
information is subject to the requirement of
confidentiality. Upon the Close of Escrow with
respect to the Property, the confidentiality
obligation set forth in this Section shall be of no
further force or effect. If the Closing does not
occur, Purchaser shall be responsible to Seller for
any and all Claims (as defined in Section 6.3 below)
arising from or relating to Purchaser's unauthorized
disclosure of any such information.
ARTICLE 4
CONDITIONS PRECEDENT TO CLOSE OF ESCROW
4.1 Conditions Precedent. This Agreement and the
obligations of the parties hereunder shall be
subject to satisfaction or waiver (by the party in
whose favor the condition precedent has been
established) of all the conditions precedent
contained in this Article 4.
4.1.1 Review of Preliminary Report. On or before
the expiration of the Due Diligence Period,
Purchaser shall review all title and survey
matters affecting the Property, including those
items set forth in Exhibit D attached hereto,
and as set forth in a Preliminary Report for
the Real Property to be issued by Title
Company, together with copies of all recorded
documents (collectively "Preliminary Report")
and deliver any objections with respect to
matters raised therein. If Purchaser does not
deliver its objections as contemplated above,
Purchaser shall be deemed to have approved the
matters in the Preliminary Report and Exhibit
D. If any title exceptions are recorded
against the Real Property before the Close of
Escrow in addition to those specified in
Exhibit D and the Preliminary Report, the Title
Company shall issue a supplemental preliminary
report ("Supplemental Report") and Purchaser
shall have the right to review and approve such
items. Purchaser shall deliver notice of
approval or disapproval of matters set forth in
any Supplemental Report, within three
(3) Business Days after receipt of the
Supplemental Report ("Title Review Notice").
If Purchaser does not deliver a Title Review
Notice within such time period, Purchaser shall
be deemed to have disapproved the applicable
Supplemental Report. If Purchaser delivers (or
is deemed to have delivered) notice of
disapproval (whether relative to the
Preliminary Report or the Supplemental Report),
Seller shall deliver notice if Seller elects to
cure the disapproved items, within seven
(7) Business Days of receipt of Purchaser's
notice. If Seller fails to deliver notice,
Seller shall be deemed to have elected not to
cure the disapproved item. If Seller elects
not to cure the disapproved item, then
Purchaser shall have five (5) Business Days
after the delivery of Seller's notice of
election not to cure the disapproved item or
failure to deliver such notice to either waive
its prior disapproval or terminate this
Agreement. Unless Purchaser delivers notice of
its election to waive its prior disapproval
within such period, this Agreement shall
terminate and Purchaser shall be entitled to a
refund of the Deposit, and each party shall
thereafter be released from its obligations
under this Agreement except for obligations
contained in provisions that expressly survive
termination. If a Supplement Report is issued
and Purchaser delivers a Title Review Notice to
Seller less than fifteen (15) days before the
Closing Date, then the Closing Date shall be
extended to a date which shall be fifteen (15)
days after delivery of the Title Review Notice
by written notice of extension to Escrow Agent
at the election of either Purchaser or Seller.
Notwithstanding the foregoing provisions of
this paragraph, Seller shall be required to
remove by payment, bonding or otherwise: (i)
any mortgages encumbering the Premises and (ii)
any monetary lien which can be cured by the
payment of a liquidated sum of money; provided,
that, in no event shall Seller be obligated to
remove any lien, which individually or in the
aggregate would require the expenditure of
monies in excess of $25,000, pursuant to this
clause (ii).
4.1.2 Title Policy. Escrow Agent shall be
unconditionally committed to procure from the
Title Company an American Land Title
Association ("ALTA") Standard Owner's Policy of
title insurance, for the Real Property, with a
liability limit in the amount of the Purchase
Price and insuring fee title vested in
Purchaser (the "Title Policy"). Purchaser
shall not have the right to object to and shall
accept title to the Real Property subject to:
(a) any restrictions or regulations affecting
the Property as to building upon or using the
Property by virtue of any law, ordinance, or
other lawful action of any municipal or other
public authority now or hereafter adopted or in
force; (b) all notes or notices of violations
of law or municipal ordinances, orders, or
requirements noted in or issued by the
Departments of Housing and Buildings, Fire,
Labor, Health, or other State, County or
Municipal Department as well as by the Federal
or State Environmental Protection Agency having
jurisdiction against or affecting the Property
on the date hereof; (c) rights, if any,
acquired by any utility company to maintain and
operate lines, wires, cables and distribution
boxes in, over, and upon the Property;
provided, that, the same do not materially
adversely affect the present use of the Real
Property ; (d) any state of facts which an
accurate survey may show; provided, the same do
not materially adversely affect the present use
of the real Property; (e) rights, options and
claims of the tenants under the Leases; (f)
rights and claims of any subtenants or
sublessees or any other party in possession;
(g) general and special taxes and sewer
charges, provided the same are not yet due and
payable, (h) the items approved by Purchaser
pursuant to Section 4.1.1 of this Agreement;
and (i) any items caused or permitted to be
placed of record by Purchaser. The foregoing
items in (a) through (i) are referred to as the
"Permitted Exceptions".
4.1.3 Due Diligence Period. Purchaser shall have
approved its investigations during the Due
Diligence Period.
4.1.4 Seller's Performance. Seller shall have
performed all of its obligations and made all
deliveries required to be performed or made as
of the Close of Escrow, and all of Seller's
representations and warranties contained herein
shall be true and correct in all material
respects on the Closing Date.
4.1.5 Purchaser's Performance. Purchaser shall
have performed all of its obligations and made
all deliveries required to be performed or made
as of the Close of Escrow, and all of
Purchaser's representations and warranties
contained herein shall be true and correct in
all material respects on the Closing Date.
4.1.6 Tenant Estoppels. Purchaser shall have
received executed tenant estoppel certificates
from each of the tenants under the Leases
either in the form attached hereto as Exhibit E
or in the form such tenant is obligated to
deliver under its lease (subject to (a) non-
material modifications thereof, (b) such tenant
making note of items which constitute Permitted
Encumbrances or which Seller otherwise agrees
to discharge and (c) modifications thereof to
conform the same to Leases or other information
delivered to Purchaser or made available for
its review prior to Closing). Notwithstanding
the inclusion of paragraph 4 in the form of
estoppel certificate attached hereto as Exhibit
E, Purchaser acknowledges and agrees that such
paragraph shall not be a required item for an
acceptable estoppel certificate hereunder.
Accordingly, Purchaser shall not have the right
to object to any modifications to paragraph 4
of the form of estoppel certificate or the
failure of the tenants to include such item in
their executed estoppel certificate. Seller
shall request and shall use commercially
reasonable efforts to obtain the estoppel
certificates required hereunder, however, the
failure to obtain such estoppels shall not be a
default by Seller but rather Seller's failure
to satisfy a condition precedent to Closing.
ARTICLE 5
COVENANTS AND AGREEMENTS
5.1 Cooperation. Purchaser and Seller acknowledge that
it may be necessary to execute documents other than
those specifically referred to herein in order to
complete the acquisition of the Property. Purchaser
and Seller hereby agree to cooperate with each other
by executing such other documents or taking such
other action as may be reasonably necessary in
accordance with the intent of the parties as
evidenced by this Agreement.
5.2 Entry Onto Property.
5.2.1 Right to Enter
. Provided Purchaser has delivered to Seller a
certificate of insurance satisfying the
requirements set forth in Section 5.2.3 below,
Purchaser and Purchaser's employees,
contractors, and agents ("Purchaser's Agents")
shall have the right, upon at least one
(1) Business Day prior written notice to
Seller, to enter onto the Property at
reasonable times for the purpose of conducting
soil tests and tests for Hazardous Materials,
inspecting the Property, and performing
engineering and surveying studies and showing
the Property to prospective lenders, tenants
and investors. Any such right of entry shall
be subject to the terms of any Leases.
Purchaser shall (a) perform all work permitted
under this Agreement in a safe and professional
manner; (b) not allow any dangerous or
hazardous condition created by Purchaser or
Purchaser's Agents to continue beyond the
completion of said studies and inspections;
(c) comply with all applicable laws and
governmental regulations and any instruction
deemed reasonably necessary by Seller; and
(d) obtain all permits required to be obtained
by any governmental agencies and pay any fees,
costs, charges and expenses in connection with
the issuance of such permits. If the
transaction contemplated by this Agreement does
not close, Seller shall have the option to
require Purchaser, forthwith after termination
of this Agreement, at its sole cost and
expense, to repair any damage caused by
Purchaser and/or Purchaser's Agents to the
Property in order to return the Property to
materially the same physical condition as
existed prior to entry on the Property by
Purchaser and/or Purchaser's Agents. In the
event that Purchaser fails to repair any damage
it has caused to the Property to the
satisfaction of Seller and such failure
continues for ten (10) days after written
notice thereof from Seller, then Seller may
perform such repair on behalf of Purchaser
without any liability to Purchaser for any loss
or damage by reason therefor, and upon
completion, Purchaser shall pay Seller's
reasonable costs for making such repairs plus
ten percent (10%) of such costs for overhead.
Any amounts due hereunder shall include
interest from the date of notice thereof to
Purchaser of the costs incurred by Seller at
the rate of ten percent (10%) per annum, but in
no event shall the interest rate exceed the
maximum rate allowed by law.
5.2.2 Indemnity to Seller . Purchaser shall indemnify, protect, defend
(with legal counsel reasonably acceptable to
Seller)
and hold Seller and Seller's partners,
officers,
shareholders, beneficiaries, trustees, agents,
employees, successors and assigns harmless from
any
and all claims or actions and actual costs,
expenses, damages and liabilities relating to
Purchaser's or Purchaser's Agents' entry onto
the
Property (including, but not limited to, claims
of
mechanics liens and reasonable attorneys' fees)
and
from and against all actual costs, reasonable
attorneys' fees, expenses and liabilities
incurred
in connection with such claims or any actions
or
proceedings brought thereon and any costs or
expenses, including attorneys' fees, incurred
by
Seller in connection with the enforcement of
this
indemnification provision. Except for the
purposes
specifically set forth above, Purchaser shall
not be
permitted to enter onto the Property to
complete any
work, without the prior written consent of
Seller,
which consent may be unreasonably withheld by
Seller
and may be conditioned upon Purchaser's
execution of
any other agreements relating to such entry
deemed
reasonably necessary by Seller. Purchaser's
covenants in this Section 5.2.2 shall survive
the
termination of this Agreement.
5.2.3 Insurance . During any period of entry upon
the Property, Purchaser shall maintain, with
insurance companies acceptable to Seller, the
following insurance: Worker's Compensation
Insurance as required by law and Employer's
Liability Insurance; Comprehensive General
Liability
or Commercial General Liability insurance, with
limits of not less than One Million Dollars
($1,000,000) combined single limit and not less
than
Two Million Dollars ($2,000,000) on a general
aggregate basis, for bodily injury, death and
property damage and Excess (umbrella) Liability
insurance with limits not less than $5,000,000.
Each policy of insurance shall name Seller and
any
other affiliate or subsidiary to which this
Agreement may be assigned by Seller as
additional
insureds. Further, each policy of insurance
shall
state that such policy is primary and
noncontributing with any insurance carried by
Seller. Such policy shall contain a provision
that
the naming of the additional insured shall not
negate any right the additional insured would
have
had as a claimant under the policy if not so
named
and shall contain severability of interest and
cross-liability clauses. A certificate,
together
with any endorsements to the policy required to
evidence the coverage which is to be obtained
hereunder, shall be delivered to Seller prior
to the
entry onto the Property by Purchaser or
Purchaser's
Agents. The certificate shall expressly
provide
that no less than thirty (30) days prior
written
notice shall be given Seller in the event of
any
material alteration to or cancellation of the
coverages evidenced by said certificate. A
renewal
certificate for each of the policies required
in
this Section shall be delivered to Seller not
less
than thirty (30) days prior to the expiration
date
of the term of such policy. Any policies
required by
the provisions of this Section may be made a
part of
a blanket policy of insurance with a "per
project,
per location endorsement" so long as such
blanket
policy contains all of the provisions required
herein and does not reduce the coverage, impair
the
rights of the other party to this Agreement or
negate the requirements of this Agreement.
5.3 Natural Hazard Disclosure Statement. As used
herein, the term "Natural Hazard Area" shall
mean
those areas identified as natural hazards in
the
Natural Hazard Disclosure Act, California
Government
Code Sections 8589.3, 8589.4, and 51183.5, and
California Public Resources Code Sections
2621.9,
2694, and 4136, and any successor statutes or
laws
(the "Act"). At least 3 business days prior to
the
expiration of the Due Diligence Period, Seller
shall
provide Purchaser with a Natural Hazard
Disclosure
Statement ("Disclosure Statement") in
substantially
the form attached hereto as Exhibit C and
incorporated herein by this reference.
Purchaser
acknowledges that the Disclosure Statement is
being
delivered pursuant to the Act. Purchaser
acknowledges and agrees that nothing contained
in
the Disclosure Statement shall release
Purchaser
from its obligation to fully investigate the
condition of the Property, including, without
limitation, whether the Property is located in
any
Natural Hazard Area and that Purchaser has the
expertise to perform such investigations and
has
agreed to do so under the terms of this
Agreement.
Purchaser further acknowledges and agrees that
the
matters set forth in the Disclosure Statement
may
change on or prior to the Close of Escrow and
that
Seller has no obligation to update, modify, or
supplement the Disclosure Statement. Purchaser
shall
be solely responsible for preparing and
delivering
its own Natural Hazard Disclosure Statement to
subsequent prospective purchasers of the
Property.
5.3.1 Waiver of Natural Hazard Disclosure Statement
. In the event that, prior to the Close
of Escrow, the Act is modified to provide either
that (i)
disclosure of Natural Hazard Areas is not required
in the
transfer of commercial property like the Property or
(ii)
a Purchaser of commercial property like Purchaser
can
waive the disclosure of Natural Hazard Areas under
the
Act, then Seller may elect not provide the Natural
Hazard
Disclosure Statement to Purchaser, and Purchaser
hereby
knowingly, voluntarily, and intentionally waives its
right to disclosure of Natural Hazard Areas found in
the
Act.
5.4 Actions to Dispossess. Seller shall have the
right through the expiration of the Due Diligence
Period
to institute summary proceedings or other action(s)
to
dispossess (an "Action to Dispossess") against any
tenant
under a Lease on any default or failure to perform
by any
such tenant. In the event Seller institutes an
Action to
Dispossess as aforesaid, Seller shall give prompt
notice
thereof to Purchaser. Seller shall not institute
an
Action to Dispossess from and after the expiration
of the
Due Diligence Period, without the consent of the
Purchaser, which shall not be unreasonably withheld,
conditioned or delayed. It is understood and agreed
that
no representations have been made and no
responsibility
is assumed by Seller with respect to the continued
occupancy of the Property or any part thereof under
any
Lease by any tenant or subtenant or subtenants now
or
hereafter in possession.
5.5 Rents. Seller shall be entitled to all rents,
including estimated amounts collected in respect of
operating expenses ("Rents") for the period prior to
the
Closing and Purchaser shall be entitled to all Rents
accruing for the period after the Closing. All
collected
Rents and other payments from the tenants under the
Leases shall be prorated as of the Closing.
Purchaser
shall receive a credit for all prepaid Rents, if
any,
paid by the tenants under the Leases. If after the
Closing Date, Purchaser collects Rents or other
charges
in arrears as of the Closing Date, such Rents shall
be
applied first to the month in which the Closing
occurred,
then in payment of all amounts due for the period
after
the month in which the Closing occurred and then in
payment of all amounts due for the period prior to
the
month in which the Closing occurred. Purchaser and
Seller agree that except as specifically set forth
above,
no further adjustment or proration of Rents will be
made.
The provisions of this Section 5.5 shall survive the
Closing.
5.6 Tenant Inducement Costs. Seller agrees that it
shall be responsible for the payment of all Tenant
Inducement Costs (as hereinafter defined) which
become
due and payable (whether before or after the Closing
Date) arising from, related to, or in connection
with the
existing term of the Leases in effect as of the date
hereof ("Seller's TIC's") and at Closing, shall
provide
Purchaser with a credit against the Purchase Price
for
all Seller's TIC's. Purchaser agrees that it shall
be
responsible for the payment of: (i) all Tenant
Inducement
Costs and leasing commissions which become due and
payable (whether before or after the Closing Date)
arising from, relating to or in connection with any
new
Leases or any renewal agreements, modifications,
amendments, expansion agreements or other agreements
relating to the existing Leases or any such new
Leases
entered into between the date hereof and the Closing
Date
and (ii) all Tenant Inducement Costs and leasing
commissions which become due and payable (whether
before
or after the Closing Date) arising from, relating to
or
in connection with any renewal, expansion or other
options contained in the existing Leases (or in any
new
Leases or any other agreement described in clause
(i)
above which are exercised (or not exercised i.e the
lapse
of a tenant right of termination) on or after the
date
hereof). If as of the Closing Date, Seller shall
have
paid any Tenant Inducement Costs or leasing
commissions
for which Purchaser is responsible ("Purchaser's
TIC's")
pursuant to the foregoing, Purchaser shall reimburse
Seller for same at Closing. Purchaser hereby agrees
to
(i) assume, (ii) release Seller from and (iii) indemnify
and hold harmless Seller against any and all
liability relating to, Purchaser's TIC's and to the
extent of the credit received at Closing with
respect
thereto, Seller's TIC's. For purposes hereof,
"Tenant
Inducement Costs" shall mean any out of pocket
payments
required under a Lease to be paid by the Landlord
thereunder to or for the benefits of the tenant
thereunder which is in the nature of a tenant
inducement
or concession, including without limitation, tenant
improvement costs, design, refurbishment and other
work
allowances, lease buy out costs, moving allowances
and
free rent periods. This paragraph shall survive
Closing.
5.7 Tenant's Work; Mechanics Liens. Work performed or
to be performed by and on behalf of a tenant or
subtenant
in the Property under the Leases shall not be
Seller's
responsibility. Accordingly, notices of
commencement of
work to be performed by contractors or
subcontractors
engaged by such tenants or subtenants shall not
constitute objections to title. Additionally,
mechanic's
liens filed against the Property shall not
constitute
objections to title (a) if said mechanic's liens are
for
work performed by or on behalf of any such tenant or
subtenant as long as the Lease is not terminated and
Seller has taken steps to cause the tenant, or to
cause
the tenant to cause its subtenant, to remove the
lien
(provided the Title Company is willing to insure
title to
the Property against enforcement of the lien); or
(b) if
said mechanic's liens are filed for work performed
for
any other reason and Seller posts a bond or gives
other
assurances to the Title Company so as to enable the
Title
Company to insure title to the Property against
enforcement of the lien.
5.8 Security Deposit. After the Close of Escrow,
Purchaser shall provide any notice to the tenants
under
the Leases concerning the consummation of this
transaction and any security deposit as may be
required
by applicable law.
5.9 Personal Property Tax. Purchaser hereby agrees
to indemnify and hold Seller harmless against any
liability incurred by Seller because of non-payment
of
any tax which may be imposed by any governmental
agency
upon the sale of any items of Personal Property.
This
Section 5.9 shall survive the Closing.
ARTICLE 6
ACKNOWLEDGMENTS, REPRESENTATIONS AND WARRANTIES
6.1 Representations and Warranties of Purchaser.
Purchaser represents and warrants as follows, and if
Purchaser assigns its rights and obligations under
this
Agreement pursuant to Article 11, Purchaser's
assignee
will be deemed to represent and warrant as follows,
as
the case may be, which representations shall be true
and
correct at the Close of Escrow and survive the Close
of
Escrow:
6.1.1 Organization. Purchaser is a corporation,
duly organized, validly existing and in good
standing
under the laws of California with full power to
enter
into this Agreement.
6.1.2 Authority. The execution and delivery of
this Agreement has been duly authorized and approved
by
all requisite action and the consummation of the
transaction contemplated hereby will be duly
authorized
and approved by all requisite action of Purchaser,
and no
other authorization or approvals, whether of
governmental
bodies or otherwise, will be necessary in order to
enable
Purchaser to enter into or comply with the terms of
this
Agreement.
6.1.3 Binding Effect of Documents. This Agreement
and the other documents to be executed by Purchaser
hereunder, upon execution and delivery thereof by
Purchaser, will have been duly entered into by
Purchaser,
and will constitute legal, valid and binding
obligations
of Purchaser. Neither this Agreement nor anything
provided to be done under this Agreement violates or
shall violate any contract, document, understanding,
agreement or instrument to which Purchaser is a
party or
by which it is bound.
6.2 AS IS. Except as specifically set forth in
this Agreement, the sale of the Property hereunder
is and
will be made on an "AS IS" BASIS, IN ITS PRESENT
CONDITION, WITH ALL FAULTS, IF ANY, AND EXCEPT AS
EXPRESSLY SET FORTH HEREIN, WITHOUT ANY WARRANTY OF
ANY KIND OR NATURE, EXPRESS, IMPLIED OR OTHERWISE.
Purchaser
acknowledges that Purchaser will examine, review and
inspect all matters which in Purchaser's judgment
bear upon the Property and its value and suitability
for
Purchaser's purposes. Except as to matters
specifically
set forth in this Agreement, Purchaser will acquire
the
Property solely on the basis of its own physical and
financial examinations, reviews and inspections.
Except
as expressly set forth in this Agreement, Purchaser
acknowledges that neither Seller nor anyone on
behalf of
Seller has made any representations, statements or
warranties regarding the Property, including the
physical
condition of the Property, the location of the
Property
in any Natural Hazards Area, the value, nature or
quality
of the Property, the soil, water or geology relating
to
the Property, any income to be derived from the
Property,
the suitability of the Property for any activities
or
uses which Purchaser may wish to conduct, compliance
of
the Property with any law, ordinance, rule, or
regulation, or the status of any permits or
approvals
relating to or required in connection with the
Property
or any other matters. Except as expressly set forth
in
this Agreement, to the extent Seller has made or in
the
future makes any information regarding any aspect of
the
Property available to Purchaser, including the
Property
Documents and the Natural Hazard Disclosure
Statement,
Seller has done or will be doing so only as an
accommodation to Purchaser. Seller has not made,
and is
not making, and shall not make any representation or
warranty of any nature concerning the accuracy or
completeness of Seller's files or concerning the
authenticity, source, accuracy or completeness of
any
information contained in them or furnished or to be
furnished to Purchaser. No latent or other defect
affecting the Property in any way, whether or not
known
by Purchaser or discoverable or hereafter
discovered,
shall after the Due Diligence Period affect
Purchaser's
right to obtain a refund of Purchaser's Deposit or
its
obligation to purchase the Property, nor shall give
rise
to any right of damages, recision or otherwise
against
Seller.
6.2.1 Representations and warranties of
Seller. Seller hereby represents and warrants
the
following to Purchaser:
(a) Tenant Leases. The Leases are the only
leases demising space at the Property in effect
as
of the date hereof. To the best of Seller's
knowledge, neither the landlord nor the tenants
under the Leases are currently in default in
any
material respect under the terms of the Leases.
There are no leasing commissions due and
payable
(whether before or after the Closing Date)
arising
from, related to, or in connection with the
existing
term of the Leases. Other than the Leases,
there
are no leases, licenses or other agreements
providing any party a right of occupancy of the
Property.
(b) Contracts. To the best of Seller's knowledge:
Exhibit F sets forth a true, correct and complete
list of all the Contracts in effect at the Property
and (2) neither party to any of such agreements is
currently in default in any material respect under
the
terms thereof.
(c) Organization. Seller is a corporation, duly
organized, validly existing and in good standing
under
the laws of California with full power to enter into
this
Agreement.
(d) Authority. At Closing, the transaction
contemplated hereunder will have been duly
authorized
and approved by all requisite action of Seller.
Other than the authorization contemplated in
section 12.16, no other authorization or
approvals, whether of governmental bodies or
otherwise, will be necessary in order to enable
Seller to comply with the terms of this Agreement.
(e) Binding Effect of Documents. This Agreement
and the other documents to be executed by
Seller hereunder, upon execution and delivery
thereof by Seller, will have been duly entered
into by Seller, and will constitute legal,
valid and binding obligations of Seller.
Neither this Agreement nor anything provided to
be done under this Agreement violates or shall
violate any contract, document, understanding,
agreement or instrument to which Seller is a party
or by which it is bound.
(f) Litigation. To the best of Seller's knowledge,
there is no action, suit or litigation pending
against the Property.
(g) Condemnation. To the best of Seller's
knowledge, there are no condemnation proceedings
pending or threatened against the Property or any
portion thereof.
Reference to "Seller's Knowledge" shall be deemed to
mean the actual, present, conscious knowledge
of Xxxxx Xxxxxxxxx as to a fact at the time
given without investigation or inquiry.
6.3 Seller Release from Liability. Without
limiting Seller's representations
hereunder, Purchaser and anyone claiming by,
through or under Purchaser hereby waives its
right to recover from and fully and
irrevocably releases Seller and Seller's
employees, officers, directors,
representatives, agents, servants,
attorneys, affiliates, parents,
subsidiaries, successors and assigns,
and all persons, firms, corporations
and organizations in its behalf
("Released Parties") from any and
all claims, responsibility and/or liability
that it may now have or hereafter acquire
against any of the Released Parties for any
and all costs, losses, claims, liabilities,
damages, expenses, demands, debts,
controversies, claims, actions or causes
of actions (collectively "Claims") arising
from or related to: (i) the condition
(including any construction defects,
errors, omissions or other conditions,
latent or otherwise, and the presence in
the soil, air, structures and surface and
subsurface waters of materials or
substances that have been or may in the
future be deemed to be Hazardous
Materials or otherwise toxic, hazardous,
undesirable or subject to regulation and
that may need to be specifically treated,
handled and/or removed from the Property
under current or future federal, state
and local laws, regulations or
guidelines), valuation, salability or utility
of the Property or its suitability for
any purposes whatsoever, and (ii) any
information furnished by the Released
Parties in connection with this Agreement.
Without limiting Seller's representations
hereunder, this release expressly includes
claims of which Purchaser is presently
unaware or which Purchaser does not
presently suspect to exist which, if
known by Purchaser, would materially
affect Purchaser's release to Seller.
Purchaser expressly waives any of its rights
granted under California Civil Code
Section 1542, which provides as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS
WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO
EXIST IN HIS FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY
HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR.
Without limiting Seller's representations hereunder,
to the extent permitted by law, Purchaser hereby
agrees, represents and warrants that Purchaser
realizes and acknowledges that factual matters now
unknown to it may have given or may hereafter give
rise to Claims which are presently unknown,
unanticipated and unsuspected, and Purchaser further
agrees, represents and warrants that the waivers and
releases herein have been negotiated and agreed upon
in light of the realization and that Purchaser
nevertheless hereby intends to release, discharge
and acquit the Released Parties from any and all
Claims.
6.4 Purchaser's Waiver of Objections. Purchaser
acknowledges that as of the Closing Date,
Purchaser will have inspected the Property
and observed its physical characteristics
and conditions and will have had the
opportunity
to conduct such investigations and studies
on or over the Property and adjacent areas
as it deems necessary and hereby waives any
and all objections to or complaints regarding
the Property and its condition, including,
but not limited to, federal, state or
common law-based actions and any private
right of action under state and federal law
to which the Property is or may be
subject, including, but not limited to,
CERCLA, RCRA, physical characteristics and
existing conditions including, without
limitation, structural and geological
conditions, subsurface soil and water
conditions, and solid and hazardous
waste and Hazardous Materials on, under,
adjacent to or otherwise affecting the
Property.
Purchaser further assumes the risk of
changes in applicable laws and regulations
relating to past, present and future
environmental conditions on the Property
and the risk that adverse physical
characteristics and conditions, including,
without limitation, the presence of
Hazardous Materials or other contaminants,
may not have been revealed by its
investigation.
Seller and Purchaser have agreed upon the
Purchase Price relating to the Property
and other provisions of this Agreement
in contemplation and consideration of
Purchaser's agreeing to the provisions
of Sections 6.3 through 6.4 hereof.
ARTICLE 7
DELIVERIES TO ESCROW; THE CLOSE OF ESCROW
7.1 Seller's Deliveries to Escrow. Seller shall
deliver the following instruments to Escrow
Agent at least one (1) Business Day prior to the
Closing Date:
7.1.1 Grant Deed. A grant deed in the form attached hereto as Exhibit
G ("Grant Deed") conveying the Real Property to Purchaser, executed and
acknowledged by Seller.
7.1.2 Assignment and Assumption Agreement. Two (2) originals of the
Assignment and Assumption Agreement, duly executed by Seller, in the form
attached hereto as Exhibit B, pursuant to which Seller shall assign to
Purchaser all of Seller's right, title and interest in, under and to the
Leases, the Contracts (other than the Management and Leasing Agreement(s)
for the Property) and Intangible Property.
7.1.3 Xxxx of Sale. Xxxx of Sale ("Xxxx of
Sale"), duly executed by Seller, in the
form attached hereto as Exhibit H, conveying
all of Seller's right, title and interest in
and to the Personal Property.
7.1.4 FIRPTA Affidavit. A Certificate of Non-Foreign Status certifying
that Seller is a non-foreign person.
7.1.5 Leases. An original of the Leases.
7.1.6 Security Deposits. With respect to the
Leases, any security deposits held by Seller
pursuant to the Leases that Seller holds on behalf
of the tenant or, at the option of Seller,
Purchaser shall be entitled to a credit against
the Purchase Price.
7.1.7 Certificate of Incumbency and Good Standing. A Certificate of
Seller's secretary or assistant secretary certifying as to the incumbency
of the signatory or signatories authorized to execute the instruments
signed by Seller and delivered to Escrow, and a certificate of good
standing of Seller.
7.1.8 Seller Certificate.Seller shall deliver a certificate in favor of
Purchaser updating its representations and warranties contained in this
Agreement effective as of the Closing Date (and noting any changes
thereto).
7.1.9 Termination of Management/Leasing Agreement. Evidence of the
termination of the property management agreement and leasing agreement for
the Property, to the extent applicable.
7.2 Seller's Deliveries Outside of Escrow. Upon Close of Escrow, Seller
shall deliver to Purchaser outside of Escrow the following:
7.2.1 Other Documents. All plans and specifications relating to the
Real Property in the possession of Seller, all building permits and
certificates of occupancy for the Real Property to the extent in Seller's
possession or reasonable control, and all instruction manuals, procedure
manuals, manufacturers' warranties and similar materials in Seller's
possession or reasonable control which relate to the Property.
7.3 Purchaser's Deliveries. Purchaser shall deliver the following funds
and instruments to Escrow Agent at least one (1) Business Day prior to the
Closing Date:
7.3.1 Funds. The balance of the Purchase Price;
7.3.2 Proration, Fees and Costs. The amount, if any, required of
Purchaser under Article 8 entitled "Proration, Fees and Costs"; and
7.3.3 Documents. Two (2) counterpart originals of the Assignment and
Assumption Agreement.
7.3.4 Purchaser's Certificate.Purchaser shall deliver a certificate in
favor of Seller updating its representations and warranties contained in
this Agreement effective as of the Closing Date (and noting any changes
thereto).
7.4 Close of Escrow. Escrow Agent shall close the Escrow on the Closing
Date by (i) recording the Grant Deed in the Office of the County Recorder
for the County in which the Property is located and (ii) delivering funds
and documents as set forth in Article 9 entitled "Recordation and
Distribution of Funds and Documents" WHEN AND ONLY WHEN each of the
conditions set forth below has been satisfied:
7.4.1 Funds and Instruments. All funds and instruments required
pursuant to Sections 7.1 and 7.3 have been delivered to Escrow Agent.
7.4.2 Satisfaction of Conditions Precedent.
Each of the conditions precedent set forth in
Article 4 have been satisfied or waived as
provided for in Article 4.
ARTICLE 8
PRORATION, FEES AND COSTS
8.1 Prorations. Escrow Agent will prorate between the parties, to the
Close of Escrow, the following items:
(a) Rents under the Leases shall be prorated as of 12:00 a.m. on the Close
of Escrow, in accordance with Section 5.5 hereof.
(b) Any security deposit held by Seller shall at Seller's election be
credited to Purchaser or delivered to Purchaser in accordance with Section
7.1.6 hereof.
(c) Any amounts prepaid or payable by the owner of the Property under the
Contracts.
8.1.1 Procedure for Proration. At least one
Business Day prior to the Close of Escrow, the
parties shall agree upon all of the prorations
to be made and submit a statement to Escrow
Agent setting forth the same. In the event
that any prorations, apportionments or
computations made under this Section 8.1 shall
require final adjustment, then the parties
shall make the appropriate adjustments promptly
when accurate information becomes available and
either party hereto shall be entitled to an
adjustment to correct the same. Any corrected
adjustment or proration shall be paid in Cash
to the party entitled thereto.
8.2 Calendar Month. All prorations and/or adjustments called for in this
Agreement are to be made on the basis of the actual number of days in the
month in which the Closing occurs.
8.3 Fees and Costs. Seller shall pay (a) Seller's legal fees; (b) any
proration or apportionment payable by Seller under this Article 8, (c)
expenses that Seller might incur in connection with Seller's obligation or
written election to cure any title defects, (d) 50% of all costs and
expenses of escrow, (e) all state and local documentary and other transfer
taxes and (f) the premium applicable to a standard base ALTA policy of
owner's title insurance, not to exceed .45/$1000 of the Purchase Price.
Purchaser shall pay (a) 50% of all costs and expenses of escrow, (b) title
premiums in excess of Owner's obligation above, (c) any title fees and
expenses not relating to premiums for title insurance, (d) survey costs and
expenses, (e) recording fees, (f) Purchaser's legal fees and (g) the cost
of its due diligence. All other closing costs not specifically allocated
herein shall be paid by the parties as is customary in the county in which
the Property is located.
ARTICLE 9
RECORDATION AND DISTRIBUTION OF FUNDS AND DOCUMENTS
9.1 Recorded Documents. Escrow Agent shall cause the County Recorder of
the county in which the Property is located to mail the Grant Deed after
recordation to the grantee.
9.2 Unrecorded Documents. Escrow Agent shall, at the Close of the Escrow,
deliver by certified mail, overnight courier or United States mail (or will
hold for personal pickup, if requested) (i) one (1) original to Purchaser
and one (1) original to Seller of each of the Assignment and Assumption of
Leases and the Assignment of Contracts and (ii) the originals of the Xxxx
of Sale to Purchaser.
9.3 Payment of Funds at Close of Escrow. Escrow Agent shall deliver, at
the Close of Escrow, (i) to Seller, or order by wire the balance of the
Purchase Price; and (ii) to Purchaser, any excess funds delivered to Escrow
Holder by Purchaser to which Purchaser is entitled. Seller's wiring
instructions are attached hereto as Exhibit I.
9.4 Conformed Copies. Escrow Agent shall, at the Close of Escrow, deliver
to Seller and Purchaser a copy of the Grant Deed (conformed to show
recording date) and conformed copies of each document recorded to place
title in the condition required by this Agreement.
ARTICLE 10
REMEDIES
10.1 Seller's Remedies.
10.1.1 LIQUIDATED DAMAGES. IF ESCROW FAILS TO CLOSE
SOLELY BY REASON OF PURCHASER'S DEFAULT UNDER THIS
AGREEMENT, SELLER WILL BE DAMAGED AND WILL BE
ENTITLED TO COMPENSATION FOR THOSE DAMAGES. SUCH
DAMAGES WILL, HOWEVER, BE EXTREMELY DIFFICULT AND
IMPRACTICAL TO ASCERTAIN FOR THE FOLLOWING REASONS:
THE DAMAGES TO WHICH SELLER WOULD BE ENTITLED IN
A COURT OF LAW WILL BE BASED IN PART ON THE
DIFFERENCE BETWEEN THE ACTUAL VALUE OF THE PROPERTY
AT THE TIME SET FOR THE CLOSE OF ESCROW AND THE
PURCHASE PRICE FOR THE PROPERTY AS SET FORTH IN THIS
AGREEMENT; (B) PROOF OF THE AMOUNT OF SUCH DAMAGES
WILL BE BASED ON OPINIONS OF VALUE OF THE PROPERTY,
WHICH CAN VARY IN SIGNIFICANT AMOUNTS; AND (C) IT IS
IMPOSSIBLE TO PREDICT AS OF THE DATE ON WHICH THIS
AGREEMENT IS MADE WHETHER THE VALUE OF THE PROPERTY
WILL INCREASE OR DECREASE AS OF THE DATE SET FOR THE
CLOSING. PURCHASER DESIRES TO LIMIT THE AMOUNT OF
DAMAGES FOR WHICH PURCHASER MIGHT BE LIABLE SHOULD
PURCHASER BREACH THIS AGREEMENT. PURCHASER AND
SELLER WISH TO AVOID THE COSTS AND LENGTHY DELAYS
WHICH WOULD RESULT IF SELLER FILED A LAWSUIT TO
COLLECT ITS DAMAGES FOR A BREACH OF THIS AGREEMENT.
THEREFORE, IF ESCROW FAILS TO CLOSE ON THE PROPERTY,
AS DESCRIBED ABOVE, THE SUM REPRESENTED BY
PURCHASER'S DEPOSIT SHALL BE DEEMED TO CONSTITUTE A
REASONABLE ESTIMATE OF SELLER'S DAMAGES UNDER THE
PROVISIONS OF SECTION 1671 OF THE CALIFORNIA CIVIL
CODE AND SELLER'S SOLE AND EXCLUSIVE REMEDY IN THE
EVENT OF THE FAILURE TO CLOSE ESCROW RESULTING FROM
PURCHASER'S DEFAULT SHALL BE LIMITED TO SUCH AMOUNT,
PROVIDED, HOWEVER, THAT THE PARTIES AGREE THAT, IN NO
EVENT SHALL THIS LIQUIDATED DAMAGES PROVISION APPLY
TO ANY BREACH OF PURCHASER'S OBLIGATIONS UNDER
SECTIONS 5.2.2 OR 12.8 OF THIS AGREEMENT AND ANY
OTHER INDEMNITY PROVISIONS OF THIS AGREEMENT. IN
CONSIDERATION OF THE PAYMENT OF LIQUIDATED DAMAGES,
SELLER WILL BE DEEMED TO HAVE WAIVED ALL OTHER CLAIMS
FOR DAMAGES OR RELIEF AT LAW OR IN EQUITY INCLUDING
ANY RIGHTS SELLER MAY HAVE PURSUANT TO SECTION 1680
OR SECTION 3389 OF THE CALIFORNIA CIVIL CODE RELATING
TO PURCHASER'S DEFAULT RESULTING IN ESCROW NOT
CLOSING AS PROVIDED UNDER THIS AGREEMENT. BY
INITIALING THIS PROVISION IN THE SPACES BELOW, SELLER
AND PURCHASER EACH SPECIFICALLY AFFIRM THEIR
RESPECTIVE AGREEMENTS CONTAINED IN THIS SECTION AND
AGREE THAT SUCH SUM IS A REASONABLE SUM CONSIDERING
THE CIRCUMSTANCES AS THEY EXIST ON THE DATE OF THIS
AGREEMENT.
__________________________________
___________________________
PURCHASER'S INITIALS SELLER'S INITIALS
10.2 Purchaser's Remedies. If Seller defaults in the
performance of any of its obligations pursuant to
this Agreement and the Close of Escrow for the
Property fails to occur by reason thereof,
Purchaser's sole remedy shall be either: (i) to
terminate this Agreement (except for those
provisions that expressly survive termination) by
written notice delivered to Seller and Escrow Agent
and to recover Purchaser's Deposit, or (ii) to
immediately commence and diligently prosecute an
action for specific performance. In the event of a
Seller default, Purchaser will have no further
rights or remedies against Seller or Seller's
affiliates, agents, employees, representatives or
trustees in connection with the transaction
contemplated by this Agreement, and Purchaser shall
not be entitled (i) to prepare, file or record a lis
pendens against the Property, or (ii) to award of
any damages. Purchaser acknowledges that a material
inducement to Seller's decision to sell the Property
to Purchaser is the agreement of Purchaser not to
impede or interfere with a subsequent sale of the
Property, and that Seller will be damaged in the
event Purchaser fails to comply with the
requirements of this Section.
____________________________ ______________________
PURCHASER'S INITIALS SELLER'S INITIALS
ARTICLE 11
ASSIGNMENT
Purchaser may not assign its rights or obligations under
this Agreement without Seller's consent, which consent
may be withheld in Seller's reasonable discretion and so
long as Purchaser gives Seller prior written notice and
the assignee assumes Purchaser's obligations hereunder in
an assignment and assumption agreement in favor of and
reasonably acceptable to Seller. Said notice and
assignment and assumption agreement shall be received by
Seller at least five (5) business days before the Close
of Escrow. No such assignment shall release Purchaser
from any of its obligations under this Agreement.
ARTICLE 12
GENERAL PROVISIONS
12.1 Damage or Destruction; Eminent Domain.
12.1.1 Termination Upon Damage. In the event a casualty occurs at the
Property which results in damage to the Improvements in excess of
$1,000,000, then Purchaser may terminate this Agreement without further
liability hereunder (except for those provisions that expressly survive
termination) and recover the Deposit.
12.1.2 Closing Upon Damage or Taking. If any other casualty occurs, or
if any public or quasi-public authority under the power of eminent domain
commences, gives notice of commencement, or completes a taking of all or
any portion of the Property ("Taking"), or if the Purchaser does not elect
to terminate this Agreement following any such casualty, then the Close of
Escrow shall take place without any reduction of Purchase Price, Purchaser
shall be entitled to any and all insurance proceeds relating to such
casualty and to compensation for any Taking, as the case may be, whether
received before or after Close of Escrow, and Seller shall credit to
Purchaser any applicable insurance deductible against the Purchase Price
and shall assign all rights to insurance or condemnation proceeds upon the
Close of Escrow.
12.2 Survival. All obligations required to be performed at a time or times
after the Close of Escrow shall survive the Close of Escrow. Other than
said post-Closing obligations, if any, and any other obligation or
agreement that expressly survives Closing pursuant to the terms hereof, the
acceptance of the Grant Deed by Purchaser, as evidenced by the Close of
Escrow, shall be deemed to be full performance and discharge of every
agreement and obligation on the part of Seller under this Agreement.
12.3 Construction of Agreement. The agreements contained herein shall not
be construed in favor of or against either party, but shall be construed as
if both parties prepared this Agreement. The captions used herein are for
convenience only and are not a part of this Agreement and do not in any way
limit or amplify the terms and provisions hereof.
12.4 Counterparts. This Agreement may be executed in counterparts, each of
which, when taken together shall constitute fully executed originals.
12.5 Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto pertaining to the subject matter hereof and all
prior and contemporaneous agreements, representations, negotiations and
understandings of the parties hereto, oral or written, are hereby
superseded and merged herein. No modification, waiver, amendment,
discharge or change of this Agreement shall be valid unless the same is in
writing and signed by the party against which the enforcement of such
modification, waiver, amendment, discharge or change is or may be sought.
12.6 Exhibits. All Exhibits attached hereto are incorporated herein by
reference.
12.7 Governing Law. This Agreement and the documents in the forms attached
as exhibits hereto shall be governed by and construed under the internal
laws of California.
12.8 Real Estate Brokerage Commissions. Seller agrees to pay any and all
real estate brokerage commissions payable to CB Xxxxxxx Xxxxx, Inc. (the
"Broker") pursuant to a separate agreement. Each party hereby indemnifies,
protects, defends (with legal counsel reasonably acceptable to the other
party) and holds the other party free and harmless from and against any and
all claims, actions, expenses, costs and liabilities arising from or
relating to any claim by any broker, agent, finder or other person other
than the Broker, licensed or otherwise, claiming through, under or by
reason of the conduct of such party in connection with this transaction,
including, without limitation, attorneys' fees and costs incurred in
connection therewith or to enforce this indemnity agreement.
12.9 Notice and Payments. Any notice to be given or other document to be
delivered by any party to the other or others hereunder, may be: (a)
delivered in person to an officer of any party, (b) deposited in the United
States mail, duly certified or registered, return receipt requested, with
postage prepaid, (c) sent by a nationally recognized overnight delivery
service that provides evidence of the date of delivery, with all charges
prepaid, or (d) transmitted by facsimile (provided that the original shall
be simultaneously delivered by one of the other methods permitted herein),
as follows:
To Seller: Teachers Insurance and
Annuity
Association of America
000 Xxxxx Xxxxxx - 7th Floor
New York, New York 10017
Attn: Xxxxx Xxxxxxxxx
Fax: 000-000-0000
with a copy to: Teachers Insurance and Annuity
Association of America
000 Xxxxx Xxxxxx - 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxxx, Esq.
Fax: 000-000-0000
To Purchaser: Bedford Property Investors, Inc.
000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxx Xxxxx
Fax: 000-000-0000
With a copy to: Bedford Property Investors, Inc.
000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxx Xxxxx
Fax: 000-000-0000
And a copy to: Bedford Property Investors, Inc.
000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxxx Xxxxxxx
Fax: 000-000-0000
To Escrow Agent: First American Title Insurance Company
0000 Xx. Xxxxxx Xxxx., Xxxxx 000
Xxxxxx Xxxxx, XX 00000
Attn: Xxx Xxxxxxxx
Fax: 000-000-0000
Any party hereto may from time to time, by written notice
to the other, designate a different address which shall
be substituted for the one above specified. Unless
otherwise specifically provided for herein, all notices,
demands or other communications given hereunder shall be
in writing and shall be deemed to have been duly given
and received (i) upon personal delivery, or (ii) as of
the third Business Day after mailing by United States
registered or certified mail, return receipt requested,
postage prepaid, addressed as set forth above, or
(iii) the immediately succeeding Business Day after
deposit with a nationally recognized overnight delivery
service that provides evidence of the date of delivery,
with all charges prepaid, or (iv) if by facsimile, as
confirmed by the telecopier electronic confirmation
receipt.. The addition of any entity to the notice
provisions of this Agreement shall not give such entity
any right or interest in this Agreement to demand the
performance of any obligation or duty imposed on any
party hereto.
12.10 Remedies Cumulative. Except as set forth herein, all rights and
remedies of Purchaser and Seller contained in this Agreement shall be
construed and held to be cumulative.
12.11 Severability. If any portion of this Agreement shall become or
be held to be illegal, null or void or against public policy, for any
reason, the remaining portions of this Agreement shall not be affected
thereby and shall remain in force and effect to the fullest extent
permissible by law.
12.12 Successors and Assigns. Subject to the
limitations set forth elsewhere in this Agreement,
each and all of the covenants and conditions of
this Agreement shall inure to the benefit of and
shall be binding upon the successors-in-interest,
assigns, and representatives of the parties hereto.
As used in the foregoing, "successors" shall refer
to the parties' interest in the Property and to the
successors to all or substantially all of their
assets and to their successors by merger or
consolidation.
12.13 No Partnership or Joint Venture. Seller or
Purchaser shall not, by virtue of this Agreement,
in any way or for any reason be deemed to have
become a partner of the other in the conduct of its
business or otherwise, or a joint venturer. In
addition, by virtue of this Agreement there shall
not be deemed to have occurred a merger of any
joint enterprise between Purchaser and Seller.
12.14 Waiver. No waiver by Purchaser or Seller of
a breach of any of the terms, covenants or
conditions of this Agreement by the other party
shall be construed or held to be a waiver of any
succeeding or preceding breach of the same or any
other term, covenant or condition herein contained.
No waiver of any default by Purchaser or Seller
hereunder shall be implied from any omission by the
other party to take any action on account of such
default if such default persists or is repeated,
and no express waiver shall affect a default other
than as specified in such waiver. The consent or
approval by Purchaser or Seller to or of any act by
the other party requiring the consent or approval
of the first party shall not be deemed to waive or
render unnecessary such party's consent or approval
to or of any subsequent similar acts by the other
party.
12.15 Recordation; No Cloud on Title. Purchaser
shall not record this Agreement, any memorandum of
this Agreement, any assignment of this Agreement or
any other document which would or might cause a
cloud on the title to the Property or any portion
thereof.
12.16 Seller's Authority. Seller has not received
internal corporate authority for the consummation
of the transaction contemplated by this Agreement,
and Seller does not give Purchaser any assurances
or make any representations with respect to whether
or not such approval will be obtained. Seller's
obligation to proceed with the transaction
contemplated by this Agreement is subject to
internal corporate authority. Seller shall advise
Purchaser on or before the expiration of the Due
Diligence Period, whether or not it has obtained
internal corporate authority for the consummation
of the transactions contemplated by this Agreement.
In the event Seller does not receive internal
corporate authority as contemplated above, (i)
Purchaser shall have the right to terminate this
Agreement and receive the return of the Deposit and
Seller shall pay to Purchaser $75,000.00 in
liquidated damages; items (i) and (ii)
constituting Purchaser sole and exclusive remedy as
a result of Seller's failure to obtain internal
corporate authority.
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first above-written.
PURCHASER:
BEDFORD PROPERTY INVESTORS, INC.
By: _/s/ Xxxxxxx X. Silla_______
Name: Xxxxxxx X. Xxxxx
Title: Sr. Vice President
TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA,
a New York corporation
By:__/s/ Xxxxx X. Garofalo_________
Name:__James P. Garofalo______
Title:___Assistant Secretary_________
CONSENT OF ESCROW AGENT
The undersigned Escrow Agent hereby agrees to (i) accept
the foregoing Agreement, (ii) be Escrow Agent under said
Agreement and (iii) be bound by said Agreement in the
performance of its duties as Escrow Agent; provided, however,
the undersigned shall have no obligations, liability or
responsibility under (x) this Consent or otherwise unless and
until said Agreement, fully signed by the parties, has been
delivered to the undersigned or (y) any amendment to said
Agreement unless and until the same shall be accepted by the
undersigned in writing.
Dated: July 30, 2002 (the "Opening of the Escrow")
/s/Xxxxxx Xxxxxxxx
By:__Pamela Nicolini_____
Its:_Sr. Comm Esc. Officer_
