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PURCHASE AND SALE AGREEMENT
AND ESCROW INSTRUCTIONS
0000 XXXXXXX XXXXXX
XXXXXXXX, XXXXXXXXXX
BY AND BETWEEN
SELLER:
I-PAC MANUFACTURING, INC.,
A CALIFORNIA CORPORATION
BUYER:
CABOT INDUSTRIAL PROPERTIES, L.P.,
A DELAWARE LIMITED PARTNERSHIP
DATED AS OF:
APRIL 20, 1999
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(2)
PURCHASE AND SALE AGREEMENT AND ESCROW INSTRUCTIONS
Buyer and Seller hereby enter into this Purchase and Sale Agreement and
Escrow Instructions ("AGREEMENT") as of the Effective Date. In consideration
of the mutual covenants set forth herein, Seller agrees to sell, assign and
transfer the Property to Buyer upon Seller's acquisition thereof, and Buyer
agrees to buy the Property from Seller upon Seller's acquisition thereof, on
the terms and conditions set forth in this Agreement.
A. DEFINED TERMS. The terms listed below shall have the following
meanings throughout this Agreement:
APPROVALS: All permits, licenses, franchises, certifications,
authorizations, approvals and permits issued by any
governmental or quasi-governmental authorities for the
ownership, operation, use and occupancy of the Property
or any part thereof, excluding applications for
development approvals that have been denied.
BROKER: BRE Brokerage Company
0000 Xxxxxxx Xxxxxxx, Xx. 000
Xxxxxxxx, Xxxxxxxxxx 00000
BUYER: Cabot Industrial Properties, L.P., a Delaware limited
partnership
BUYER'S ADDRESS: Xxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxxxxx 00000-0000
Attention: Xx. Xxxx Xxxxxx
Facsimile Number: (000) 000-0000
CLOSING: The consummation of the sale and purchase of the
Property, as evidenced by the recordation of the Deed
(as hereinafter defined).
CLOSING DATE: Ten (10) days after the end of the Contingency Period,
as the same may be extended as provided in SECTION 4,
and SECTION 14.
CLOSING LEASE: A lease in the form to be attached hereto as EXHIBIT D
pursuant to Section 3(D) hereof.
(1)
CONTINGENCY PERIOD: Thirty (30) calendar days commencing on the later of
(a) the execution and delivery of the First Amendment
by Buyer and Seller, or (b) Seller's Delivery Date (as
hereinafter defined).
DEPOSIT: One Hundred Thousand Dollars ($100,000)
EFFECTIVE DATE: The date upon which the execution of this Agreement was
completed and delivered by Buyer and Seller.
ESCROW HOLDER: Commonwealth Land Title Company
ESCROW HOLDER'S
ADDRESS: Commonwealth Land Title Company
000 Xxxx Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Ms. Xxx Xx Xxxxx
EXHIBITS: Exhibit A - Legal Description of the Land
Exhibit B - Documents
Exhibit C - Audit Letter
Exhibit D - Closing Lease
Exhibit E - Guaranty
EXISTING CONTRACTS: All written insurance, brokerage, service, maintenance,
operating, repair, supply, purchase, consulting,
professional service, advertising and other contracts
relating to the ownership operation or management of
the Property (excluding any recorded documents
evidencing the Permitted Exceptions) in any way
relating to the Property or any part thereof.
GUARANTY: A guaranty in the form to be attached hereto as
EXHIBIT E pursuant to Section 3(D) hereof.
GUARANTOR: Photomatrix, Inc., a California corporation.
IMPROVEMENTS: All buildings and other improvements located on or
affixed to the Land, including, without limitation, the
existing building containing approximately 39,898
aggregate square feet of rentable space (the
"BUILDING") and the parking lot, together with any and
all mechanical
(2)
systems (including without limitation, all heating,
air conditioning and ventilating systems and
overhead doors), fixtures, (excluding any tenant
trade fixtures) facilities, equipment, conduits,
motors, appliances, boiler pressure systems and
equipment, air compressors, air lines, gas-fixed
unit heaters, baseboard heating systems, water
heaters and water coolers, plumbing fixtures,
lighting systems (including all fluorescent and
mercury vapor fixtures), transformers, switches,
furnaces, bus ducts, controls, risers, facilities,
installations and sprinkling systems to provide fire
protection, security, heat, air conditioning,
ventilation, exhaust, electrical power, light,
telephone, storm drainage, gas, plumbing,
refrigeration, sewer and water thereto, all cable
television fixtures and antenna, elevators,
escalators, incinerators, disposals, rest room
fixtures and other fixtures required for the
operation, maintenance and/or ownership of the
Building and Land (excluding Seller's trade fixtures
and personal property ("SELLER'S PROPERTY")),
equipment, motors and machinery located in or upon
the Building and required for the operation,
maintenance and/or ownership of the Building and
Land, and other improvements now or hereafter on the
Land.
INTANGIBLE PROPERTY: All intangible property now or on the Closing Date
owned by Seller in connection with the Real Property or
the Personal Property including without limitation all
of Seller's right, title and interest in and to all
environmental reports, soil reports, utility
arrangements, warranties, guarantees, indemnities,
claims, licenses, applications, permits, governmental
approvals, plans, drawings, specifications, surveys,
maps, engineering reports and other technical
descriptions, books and records, licenses,
authorizations, applications, permits and all other
Approvals, insurance proceeds and condemnation awards,
Seller's right, title and interest in all agreements
and contracts relating to the Real Property or the
Personal Property, or any part thereof (but not
Seller's obligations under any Rejected Contracts (as
hereinafter defined)), and all other intangible rights
used in connection with or relating to
(3)
the Real Property or the Personal Property or any
part thereof, but excluding such items used solely
for the conduct of Seller's business, such as (but
not limited to) trademarks, trade names and
copyrights and excluding any of Seller's obligations
under any Existing Contracts.
LAND: That certain land located in the City of Carlsbad, San
Diego County, California consisting of approximately
1.8 acres and described in EXHIBIT A hereto, together
with all rights and interests appurtenant thereto,
including, without limitation, any water and mineral
rights, development rights, air rights, easements and
all rights of Seller in and to any alleys, passages or
other rights-of-way.
LEASES: Any and all leases, occupancy agreements, licenses or
other agreements to occupy all or any portion of the
Property.
LETTER OF CREDIT: A letter of credit in the face amount of Two Hundred
Seventy-Five Thousand Dollars ($275,000) issued by an
issuer, and otherwise in the form required by the
Closing Lease.
PERSONAL PROPERTY: Other than Seller's Property, all personal property
owned, now or on the Closing Date, by Seller and used
in conjunction with the operation, maintenance and/or,
ownership of, and located on, the Real Property,
including, without limitation, all landscaping, plants
and lawn equipment; all tools and supplies (whether
stored on or off the Real Property), maintenance
equipment, materials and supplies used in the operation
of the Real Property or Personal Property; but
excluding all furniture, furnishings, art work,
sculptures and paintings; all equipment and machinery
not otherwise included within the definition of the
Improvements, office equipment and supplies.
PROPERTY: The Real Property, the Personal Property, the Approved
Contracts (as defined in SECTION 3), and the Intangible
Property.
(4)
PURCHASE PRICE: Two Million Nine Hundred Twenty-Five Thousand Dollars
($2,925,000).
REAL PROPERTY: The Land and the Improvements.
SECURITY DEPOSIT: The security deposit in the amount of Twenty-Five
Thousand One Hundred Thirty Seven Dollars ($25,137)
required pursuant to the Closing Lease.
SELLER: I-PAC Manufacturing, Inc., a California corporation.
SELLER'S ADDRESS: I-PAC Manufacturing, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxx
Chief Executive Officer
Facsimile Number: (000) 000-0000
SELLER'S DELIVERY DATE: The date on which Seller shall have delivered to Buyer
all of the Documents and the Document Certification (as
such terms are defined in SECTION 2 below).
SELLER'S PROPERTY: Defined in the definition of "Improvements".
TITLE COMPANY: Commonwealth Land Title Company
000 Xxxx Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xx. Xxx Xxxxxxx
Facsimile Number: (000) 000-0000
WORKING DAY: Any day that is not a Saturday or Sunday or a holiday
in the state in which the Real Property is located.
1. DEPOSIT AND PAYMENT OF PURCHASE PRICE. Within three (3) Working
Days after the Effective Date, Buyer shall deposit with Escrow Holder, at
Escrow Holder's office, by check or by wire transfer, funds in the amount of
the Deposit as a deposit on account of the Purchase Price. Immediately upon
Escrow Holder's receipt of the Deposit, Escrow Holder shall place the Deposit
in an interest-bearing account, the interest to accrue to Buyer (any
subsequent references herein to the Deposit shall be deemed to include any
interest accrued thereon).
(5)
If the transactions contemplated hereby close as provided herein, the
Deposit shall be paid to Seller and shall be credited toward the Purchase
Price. If this Agreement is terminated pursuant to the terms hereof or if the
transactions do not close where such termination or such failure to close is
a result of any reason other than default by Buyer, Escrow Holder shall
promptly return the Deposit to Buyer. If the Closing fails to occur due to a
default by Buyer hereunder (all of the conditions to Buyer's obligations to
close having been satisfied or waived), then Seller shall have the right to
terminate this Agreement and to receive and retain the Deposit in accordance
with the provisions of SECTION 10.B of this Agreement.
2. DELIVERY OF MATERIALS FOR REVIEW. Prior to, or concurrently with,
the execution by Seller of this Agreement, Seller shall deliver the materials
listed on EXHIBIT B (collectively, the "DOCUMENTS") to Buyer for its review,
and upon such delivery shall certify to Buyer that the Documents delivered to
Buyer constitute true, accurate and complete copies of such Documents and
constitute all of the Documents required by this Section to be delivered by
Seller to Buyer (the "DOCUMENT CERTIFICATION").
Without limitation on the foregoing, Seller shall make any other documents,
files and information concerning the Property in Seller's possession or
control available for Buyer's inspection at Seller's general offices or such
other location as shall be mutually convenient to the parties.
3. CONTINGENCIES. Buyer's obligation under this Agreement to purchase
the Property and consummate the transactions contemplated hereby is subject
to and conditioned upon, among other things, the satisfaction or waiver by
Buyer, in its sole and absolute discretion and in the manner hereinafter
provided, of each of the contingencies (individually, a "CONTINGENCY", and
collectively, the "CONTINGENCIES") set forth in this SECTION 3 in each case
within the Contingency Period.
A. PROPERTY REVIEW. On or before the expiration of the
Contingency Period, Buyer shall have completed and shall be satisfied,
in Buyer's sole and absolute discretion, with Buyer's due diligence
review, investigation and analysis of the Property (the "DUE DILIGENCE
REVIEW"), which may include, but shall not necessarily be limited to,
Buyer's review, investigation and analysis of: (i) all of the
Documents; (ii) the physical condition of the Property; (iii) the
adequacy and availability at reasonable prices of all necessary
utilities; (iv) the adequacy and suitability of applicable zoning and
Approvals; (v) the Existing Contracts and the obligations from and to
the parties thereunder; (vi) market feasibility studies; and (viii)
such tests and inspections of the Property as Buyer may deem necessary
or desirable.
B. ENVIRONMENTAL AUDIT. On or before the expiration of the
Contingency Period, Buyer shall have completed to the satisfaction of
Buyer, in
(6)
its sole and absolute discretion, and at its expense, an environmental
audit and assessment of the Real Property (the "ENVIRONMENTAL AUDIT"),
including but not limited to the performance of such tests and
inspections as Buyer may deem necessary or desirable in order to
determine the presence or absence of any Hazardous Materials (as
hereinafter defined).
The foregoing Due Diligence Review and Environmental Audit Contingencies
are solely for Buyer's benefit and only Buyer may determine such
Contingencies to be satisfied or waived. Buyer shall have the Contingency
Period in which to satisfy or waive such Contingencies by delivering written
notice to Seller. A Contingency shall be deemed not to have been satisfied
or waived by Buyer unless prior to the expiration of the Contingency Period,
Buyer shall deliver to Seller a written notice to such effect (each such
notice being herein referred to as an "APPROVAL NOTICE").
If Buyer provides an Approval Notice for each of the Contingencies, then
the Contingencies shall be deemed satisfied or waived and the parties shall,
subject to the satisfaction of all other terms and conditions applicable to
the respective parties' obligations hereunder, be obligated to proceed to
Closing. If Buyer does not provide an Approval Notice with respect to any or
all of the Contingencies, then such Contingency(ies) shall be deemed not
satisfied or waived, and this Agreement shall automatically terminate and be
of no further force and effect without the further action of either party.
Upon any such termination, Escrow Holder shall return the Deposit to Buyer
and the parties shall have no obligation to proceed to Closing.
C. EXISTING CONTRACTS. With respect to the Existing Contracts only,
on or before expiration of the Contingency Period, Buyer shall furnish Seller
with a written notice of the contracts and agreements (the "APPROVED
CONTRACTS ") which Buyer has elected to assume at the Closing. All Existing
Contracts not included in any such notice shall be excluded from the Property
to be conveyed to Buyer and are herein respectively referred to as the
"REJECTED CONTRACTS". Prior to the Closing Date, Seller shall, at Seller's
sole cost and expense, terminate all Rejected Contracts and deliver to Buyer
evidence satisfactory to Buyer of Seller's termination of the Rejected
Contracts on or prior to Closing. If Buyer fails to give the notice described
in this paragraph within the Contingency Period, then Buyer shall be deemed
to have elected to terminate all of the Existing Contracts.
D. FORM OF CLOSING LEASE AND GUARANTY. On or before the fifth (5th)
Working Day after the Effective Date, which date may be extended by Buyer, in
its sole discretion, up to the tenth (10th) Working Day after the Effective
Date, Buyer and Seller shall amend this Agreement (the "FIRST AMENDMENT") to
include the form of Closing Lease as EXHIBIT D and the form of Guaranty as
EXHIBIT E. If Buyer and Seller cannot agree upon the form of the Closing
Lease and Guaranty within the time provided in this Section 3(D), then Buyer
shall have the right to terminate this Agreement by written notice to Seller.
If Buyer elects to
(7)
terminate this Agreement pursuant to this Section 3(D), Escrow Holder shall
return the Deposit to Buyer and the parties shall have no obligation to
proceed to Closing.
4. TITLE COMMITMENT; SURVEY; SEARCHES. Buyer's obligation to purchase
the Property and to consummate the transactions contemplated hereby shall
also be subject to and conditioned upon Buyer's having approved the condition
of title to the Property and a survey of the Real Property in the manner
provided for in this SECTION 4.
A. TITLE COMMITMENT. Buyer shall cause the Title Company to
deliver a commitment (the "TITLE COMMITMENT") for the Title Policy (as
defined in SECTION 5 hereof), issued by the Title Company showing
Seller as the owner of the Real Property, together with legible copies
of all documents ("EXCEPTION DOCUMENTS") referred to in Schedule B of
the Title Commitment.
B. SURVEY. Buyer may, at its expense, obtain a survey (the
"SURVEY") of the Real Property, by a surveyor acceptable to Buyer, in
a form acceptable to, and certified to, Buyer and the Title Company,
and any such surveyor shall be afforded reasonable access to the
Property.
C. SEARCHES. Buyer may obtain current UCC, tax lien and
judgment searches with respect to Seller in the appropriate records
located in San Diego County, California and searches of the
appropriate records of San Diego, California and for the State of
California for the Real Property and the Personal Property showing all
liens, security interests and adverse claims affecting the Seller's
interest in the Real Property and/or the Personal Property
(collectively, "SEARCHES").
D. PERMITTED/UNPERMITTED EXCEPTIONS. On or before the end of
the Contingency Period, Buyer shall provide Seller with written notice
("BUYER'S EXCEPTION NOTICE") setting forth a list of the matters set
forth or disclosed in the Title Commitment, Survey and/or Searches
that are acceptable to Buyer (herein referred to, together with the
Closing Lease, as "PERMITTED EXCEPTIONS") and a list of such matters
that are unacceptable to Buyer (herein referred to as "UNPERMITTED
EXCEPTIONS"); provided however, that each financial encumbrance such
as a mortgage, deed of trust, or other debt security, attachment,
judgment, lien for delinquent real estate taxes and delinquent
assessments, mechanic's or materialmen's lien, and each other lien or
encumbrance of a definite or ascertainable amount which may be removed
by the payment of money and which is outstanding against the Property,
or any part thereof, that is revealed or disclosed by the Title
Commitment and/or the Searches (herein such matters are referred to as
"FINANCIAL ENCUMBRANCES") shall automatically, and without any
requirement for Buyer to provide notice thereof to Seller, be deemed
an
(8)
Unpermitted Exception and Seller hereby covenants to remove all such
Financial Encumbrances on or before the Closing.
E. EXCEPTION CURE PERIOD. Except with respect to Financial
Encumbrances, which are governed by the last sentence of SUBSECTION
4.D., Seller shall have the right, but not the obligation, within five
(5) Working Days after receipt of the Buyer's Exception Notice
("SELLER'S ELECTION PERIOD"), to provide Buyer with written notice
that Seller has agreed to remove or otherwise remedy all Unpermitted
Exceptions set forth therein on or before the Closing Date. If Seller
provides Buyer with such written notice within Seller's Election
Period, Seller shall be obligated to remove or otherwise remedy all
Unpermitted Exceptions in a manner acceptable to Buyer on or before
the Closing Date, and Seller's failure to so remove or remedy all
Unpermitted Exceptions on or before the Closing Date shall constitute
a default by Seller hereunder.
F. TERMINATION OF AGREEMENT OR WAIVER OF DISAPPROVAL OF UNCURED
UNPERMITTED EXCEPTIONS. If Seller does not agree within Seller's
Election Period to remove all Unpermitted Exceptions on or before the
Closing Date as hereinbefore provided, Buyer shall have five (5)
Working Days to give Seller notice that Buyer waives its objections to
such Unpermitted Exceptions. If Buyer does not give such notice,
Buyer shall be deemed to have disapproved the Title Commitment, Survey
and/or Searches, as the case may be, which contain(s) or disclose(s)
the Unpermitted Exceptions, the condition set forth in this SECTION 4
shall be deemed to be unsatisfied and this Agreement shall
automatically terminate and be of no further force and effect. Upon
any such termination, Escrow Holder shall return the Deposit to Buyer
and the parties shall have no obligation to proceed to Closing. If
Buyer provides the foregoing notice of waiver within the aforesaid
five (5) Working Day period, then the condition set forth in this
SECTION 4 shall be deemed satisfied or waived and the parties shall,
subject to the satisfaction of all other terms and conditions
applicable to the respective parties' obligations hereunder, be
obligated to proceed to Closing. In the event Buyer shall expressly
waive in writing its objections to any Unpermitted Exceptions, the
term "PERMITTED EXCEPTIONS" as used herein in connection with the
status of title to be conveyed to Buyer or the Title Policy to be
delivered to Buyer shall mean and include all exceptions designated by
Buyer as Permitted Exceptions pursuant to SECTION 4.D. hereof, as well
as any Unpermitted Exceptions as to which Buyer has so waived its
objections.
G. EXTENSION OF CLOSING DATE. The Closing Date shall be
extended for such period of time as may be necessary in order to
afford the parties their
(9)
respective review, consideration and notice periods otherwise
contemplated in this SECTION 4.
H. APPROVED TITLE AND SURVEY. The condition of title as
approved by Buyer in accordance with this SECTION 4 is referred to
herein as the "APPROVED TITLE" and the Survey as approved by Buyer in
accordance with this SECTION 4 is referred to herein as the "APPROVED
SURVEY".
5. DEED; TITLE POLICY. Seller shall convey the Real Property to Buyer
by a grant deed in form and substance to be agreed upon between Buyer and
Seller (the "DEED"). As a condition to Buyer's obligation to consummate the
purchase of the Property and other transactions contemplated hereby, as of
Closing the Title Company shall be unconditionally committed to issue to
Buyer an ALTA Form B (revised 1970) extended coverage Owner's Title Insurance
Policy issued by the Title Company, dated the Closing Date and naming Buyer
(or its nominee or assignee, if applicable) as the insured, in the face
amount of the Purchase Price, showing Buyer (or its nominee or assignee, as
applicable) to be the owner in fee simple of the Real Property, subject to no
exceptions other than Permitted Exceptions, together with such endorsements
as required by Buyer, all in form and substance reasonably satisfactory to
Buyer (the "TITLE POLICY"). Seller shall, subject to the provisions of
SECTION 4 above, deliver to the Title Company such instruments, documents,
payments, indemnities, releases and agreements and shall perform such acts as
the Title Company shall reasonably require in order to issue the Title Policy.
6. PRORATIONS. Real property taxes and assessments, utility charges,
insurance premiums and charges payable under the Existing Contracts shall not
be prorated between Buyer and Seller in connection with the sale of the
Property contemplated by this Agreement since (A) Seller is responsible for
all such charges, as owner of the Property, prior to the Closing, and (B)
Seller shall remain responsible for all such charges, as the sole tenant of
the Property under the terms of the Closing Lease, from and after the
Closing. If Seller has made any deposit with any utility company, local
authority or third party in connection with services to be provided to the
Property, such deposits shall remain the property of Seller.
7. CLOSING.
A. CLOSING REQUIREMENTS. The consummation of the sale and
purchase of the Property (the "CLOSING") shall be effected through a
closing escrow which shall be established by Seller and Buyer with the
Escrow Holder. All documents to be delivered at the Closing and all
payments to be made shall be delivered on or before the Closing Date
as provided herein, in escrow, pending the recording of the Deed
(following a datedown of title to the time of recording which does not
disclose any new matter affecting title to the Real Property which is
not acceptable to Buyer), and other instruments as are
(10)
required to be recorded to effect the transfer and conveyance of the
Property, upon which recording all instruments and funds shall then be
delivered out of escrow.
B. ADDITIONAL CONDITIONS TO CLOSING. It is a condition to
Buyer's obligations to proceed to Closing and to consummate the
transactions contemplated hereby, that, as of the Closing Date, (i)
all of the Seller's representations and warranties hereunder shall be
true and correct in all material respects and the closing certificate
delivered pursuant to SECTION 8.A.(VI) hereof shall not disclose any
qualifications or changes in Seller's representations and warranties
set forth in SECTION 11 hereof, which, in Buyer's sole discretion,
would have a material adverse effect on the use, operation, value,
marketability or financeability of the Property by Buyer; (ii) Seller
shall have performed all of its covenants hereunder; (iii) no
moratorium, statute, order, regulation, ordinance or judgment of any
court or governmental agency shall have been enacted, adopted, issued
or initiated that would materially and adversely affect the Property;
(iv) the Property shall be delivered to Buyer at Closing free and
clear of any occupants or rights to possession other than the rights
of Seller under the Closing Lease; (v) all Contingencies shall have
been satisfied or waived in accordance with SECTION 3 hereof; (vi) the
Title Company shall be unconditionally committed to issue the Title
Policy upon the recordation of the Deed; (vii) Seller shall have
delivered all other documents and other deliveries listed in SECTION
8.A. hereof; (viii) there shall not have occurred a material adverse
change in Seller's financial condition or in its ability to perform
its obligations under the Closing Lease; (ix) there shall not have
occurred a material adverse change in Guarantor's financial condition
or its ability to perform its obligations under the Guaranty; and (x)
all other conditions to Buyer's obligations to proceed to Closing
which are set forth in this Agreement shall have been satisfied or
waived in writing in the manner herein provided. If any condition to
Buyer's obligations hereunder is not fulfilled, including any
condition not set forth in this SUBSECTION 7.B., Buyer shall have no
obligation to proceed to Closing or to consummate the transactions
contemplated hereby. Nothing in this Agreement shall restrict Buyer's
rights and remedies in the event that the failure of any of the
foregoing conditions to be satisfied also constitutes a default by
Seller hereunder.
8. ESCROW.
A. SELLER'S CLOSING DELIVERIES. On or prior to the Closing
Date, Seller shall deliver to Escrow Holder the Security Deposit and
the following documents and materials, all of which shall be in form
and substance acceptable to Buyer:
(11)
(i) DEED; TRANSFER DECLARATIONS. The Deed, duly
executed, acknowledged and in recordable form, accompanied
by all necessary transfer tax declarations of Seller as may
be required under applicable law in order to permit the
recording of the Deed.
(ii) XXXX OF SALE. A duly executed xxxx of sale for
the Personal Property and Intangible Property, conveying to
Buyer all of the Personal Property and Intangible Property
free from all leases, liens and encumbrances other than any
Permitted Exceptions that may be applicable thereto (the
"XXXX OF SALE").
(iii) CLOSING LEASE. Two (2) originals of the Closing
Lease.
(iv) GUARANTY. Two (2) originals of the Guaranty.
(v) LETTER OF CREDIT. One original of the Letter of
Credit duly issued by the issuer.
(vi) ASSIGNMENT OF CONTRACTS. Two (2) originals of
an assignment of the Approved Contracts, duly executed and
acknowledged by Seller and to the extent required under the
terms of any Approved Contract, consented to by the other
party to such Contract (the "ASSIGNMENT OF CONTRACTS").
(vii) TITLE CLEARANCE DOCUMENTS. All statements,
releases, undertakings, affidavits, instruments and
indemnities duly executed by Seller required of Seller in
accordance with the provisions of SECTION 5 of this
Agreement.
(viii) CLOSING CERTIFICATE. A certificate duly
executed by Seller to the effect that as of the Closing
Date, all representations and warranties by Seller set forth
in this Agreement remain true and correct to the same extent
as if made on and as of the Closing Date and disclosing no
changes or qualifications objectionable to Buyer in its sole
discretion (the "CLOSING CERTIFICATE").
(ix) FIRPTA AFFIDAVIT. A non-foreign certification,
duly executed by Seller under penalty of perjury, certifying
that Seller is not a "foreign person", pursuant to Section
1445 (as may be amended) of the Internal Revenue Code of
1986, as amended
(12)
("SECTION 1445") and a California Form 590 (collectively, the
"FIRPTA AFFIDAVIT"). If Seller shall fail or be unable to deliver
the same, then Buyer shall have the right to withhold such portion
of the Purchase Price as may be necessary, in the opinion of Buyer
or its counsel, to comply with Section 1445 and applicable
California law.
(x) EVIDENCE OF AUTHORITY. Evidence of (a) Seller's
power and authority to enter into this Agreement, the
Closing Lease and the other documents contemplated herein
and to perform its obligations hereunder and thereunder; and
(b) Guarantor's power and authority to enter into the
Guaranty and to perform its obligations thereunder.
On or prior to the Closing Date, Seller shall deliver to Buyer
the following documents and materials, all of which shall be in form
and substance reasonably acceptable to Buyer:
(a) INSURANCE POLICIES AND CERTIFICATES. Copies of all
insurance policies and current insurance certificates
evidencing that all insurance policies required to be
maintained by the Closing Lease are in full force and effect
as therein required.
(b) DOCUMENTS. Originals of all Documents, if not
already delivered, or copies of same certified by Seller to
the extent originals do not exist.
(c) KEYS; MANUALS. To the extent in Seller's
possession, keys to all entrance doors in the Improvements,
properly tagged for identification, and all operating
manuals relating to operation of the equipment and systems
which are part of the Property.
(d) CLOSING STATEMENT. A duplicate counterpart of a
closing statement (the "CLOSING STATEMENT") prepared by
Escrow Holder, and signed by Seller, setting forth all
prorations and credits required hereunder, signed by Seller,
together with copies of the most recent tax bills.
(e) OTHER DOCUMENTS. Such additional documents and
instruments as may reasonably be requested by Buyer in order
to effectuate the transactions contemplated hereby.
(13)
B. BUYER'S DELIVERIES AT CLOSING. On the Closing Date, Buyer
shall deliver to Escrow Holder the Purchase Price for the Property as
provided in SECTION 1. On or prior to the Closing Date, Buyer shall
deliver to Escrow Holder two (2) duly executed counterparts of the
Assignment of Contracts, the Closing Lease and the Closing Statement
and such additional documents and instruments as may reasonably be
requested by Seller in order to effectuate the transactions
contemplated hereby.
C. ESCROW AGREEMENT. This Agreement shall constitute both an
agreement between Buyer and Seller and escrow instructions for Escrow
Holder. If Escrow Holder requires separate or additional escrow
instructions which it deems necessary for its protection, Seller and
Buyer hereby agree promptly upon request by Escrow Holder to execute
and deliver to Escrow Holder such separate or additional standard
escrow instructions of Escrow Holder (the "ADDITIONAL INSTRUCTIONS").
In the event of any conflict or inconsistency between this Agreement
and the Additional Instructions, this Agreement shall prevail and
govern, and the Additional Instructions shall so provide. The
Additional Instructions shall not modify or amend the provisions of
this Agreement unless otherwise agreed to in writing by Seller and
Buyer.
D. ACTIONS OF ESCROW HOLDER. On the Closing Date, provided
Buyer and Seller have satisfied (or waived in writing) the conditions
set forth in this Agreement, Escrow Holder shall take the following
actions in the order indicated below:
(i) Record the Deed in the Official Records of San
Diego County, California;
(ii) Deliver to Buyer a conformed copy of the
recorded Deed, the Xxxx of Sale, Closing Certificate and
FIRPTA Affidavit one fully executed original of the Closing
Lease, Guaranty and Assignment of Contracts and the original
Letter of Credit;
(iii) Deliver to Seller, in cash or current funds, all
sums due Seller pursuant to this Agreement and one original
of the fully executed Closing Lease and Assignment of
Contracts;
(iv) Cause the Title Company to issue the Title
Policy; and
(v) Deliver to Seller and Buyer a closing statement
which has been certified by Escrow Holder to be true and
correct.
(14)
E. PROCEDURES UPON FAILURE OF CONDITION. Except as otherwise
expressly provided herein, if any of the conditions set forth in this
Agreement is not timely satisfied or waived for a reason other than
the default of Buyer or Seller in the performance of their respective
obligations under this Agreement:
(i) This Agreement, the escrow and the respective
rights and obligations of Seller and Buyer hereunder shall
terminate;
(ii) Escrow Holder shall promptly return to Buyer all
funds of Buyer in its possession, including but not limited
to the Deposit, and to Seller and Buyer all documents
deposited by them respectively, which are then held by
Escrow Holder; and
(iii) Any escrow cancellation and title charges shall
be borne by Seller.
F. DISTRIBUTION OF FUNDS FOR THE SELLER. Seller hereby instructs
Escrow Holder that any proceeds due to Seller at the close of escrow should
be remitted to Imperial Bank as payment against any credit obligations due to
Imperial Bank by Seller at the close of escrow. Seller may not change this
instruction to escrow without the written consent of Imperial Bank or a zero
demand notice to escrow from Imperial Bank. The balance of said proceeds,
after payment to Imperial Bank, if any, shall be remitted to Seller at the
close of escrow. Buyer has no responsibilities or obligations with respect
to this SECTION 8(f).
9. CLOSING COSTS; PROPERTY COSTS. Seller shall pay (A) all recording
fees and transfer taxes payable in connection with the transfer of the
Property to Buyer and the recording of the Deed; (B) the cost of a CLTA
Owners Title Insurance Policy provided by the Title Company for the Property
(or "CLTA POLICY"); (C) one-half of all escrow fees and charges owing to
Escrow Holder; (D) the commission due Broker; and (E) all of the Seller's
legal fees and expenses and the cost of all opinions, certificates,
instruments, documents and papers Seller is required to deliver or to cause
to be delivered hereunder, and, without limitation, the cost of all
performances by Seller of its obligations hereunder.
Buyer shall pay (A) one-half of all escrow fees and charges owing to
Escrow Holder; (B) the difference in cost between the CLTA Policy and the
Title Policy and (C) all of Buyer's legal fees and expenses and the cost of
preparing all documents and papers Buyer is required to deliver or to cause
to be delivered hereunder, and, without limitation, the cost of all
performances by Buyer of its obligations hereunder.
(15)
10. REMEDIES.
A. SELLER'S SOLE REMEDY. If the closing of this transaction
fails to occur due to Buyer's default under this Agreement (all of the
conditions to Buyer's obligations to close having been satisfied or
waived), Seller's sole and exclusive remedy shall be to terminate the
escrow and receive and retain the Deposit in accordance with SECTION
10(B).
B. LIQUIDATED DAMAGES ON BUYER'S DEFAULT. BUYER AND SELLER
HEREBY ACKNOWLEDGE AND AGREE THAT, IN THE EVENT THE CLOSING FAILS TO
OCCUR DUE TO A BUYER DEFAULT (ALL OF THE CONDITIONS TO BUYER'S
OBLIGATIONS TO CLOSE HAVING BEEN SATISFIED OR WAIVED), SELLER WILL
SUFFER DAMAGES IN AN AMOUNT WHICH WILL, DUE TO THE SPECIAL NATURE OF
THE TRANSACTION CONTEMPLATED BY THIS AGREEMENT AND THE SPECIAL NATURE
OF THE NEGOTIATIONS WHICH PRECEDED THIS AGREEMENT, BE IMPRACTICAL OR
EXTREMELY DIFFICULT TO ASCERTAIN. IN ADDITION, BUYER WISHES TO HAVE A
LIMITATION PLACED UPON THE POTENTIAL LIABILITY OF BUYER TO SELLER IN
THE EVENT THE CLOSING FAILS TO OCCUR DUE TO A BUYER DEFAULT, AND
WISHES TO INDUCE SELLER TO WAIVE OTHER REMEDIES WHICH SELLER MAY HAVE
IN THE EVENT OF A BUYER DEFAULT. BUYER AND SELLER, AFTER DUE
NEGOTIATION, HEREBY ACKNOWLEDGE AND AGREE THAT THE AMOUNT OF THE
DEPOSIT REPRESENTS A REASONABLE ESTIMATE OF THE DAMAGES WHICH SELLER
WILL SUSTAIN IN THE EVENT OF SUCH BUYER DEFAULT. BUYER AND SELLER
HEREBY AGREE THAT SELLER MAY, IN THE EVENT THE CLOSING FAILS TO OCCUR
DUE TO A BUYER DEFAULT, TERMINATE THIS AGREEMENT AND CANCEL THE ESCROW
BY WRITTEN NOTICE TO BUYER AND ESCROW HOLDER, WHEREUPON ESCROW HOLDER
SHALL DELIVER THE DEPOSIT TO SELLER AND SELLER SHALL RECEIVE THE
DEPOSIT AS LIQUIDATED DAMAGES. SUCH RETENTION OF THE DEPOSIT BY
SELLER IS INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO SELLER PURSUANT
TO SECTIONS 1671, 1676 AND 1677 OF THE CALIFORNIA CIVIL CODE, AND
SHALL NOT BE DEEMED TO CONSTITUTE A FORFEITURE OR PENALTY WITHIN THE
MEANING OF SECTION 3275 OR SECTION 3369 OF THE CALIFORNIA CIVIL CODE,
OR ANY SIMILAR PROVISION. FOLLOWING TERMINATION OF THIS AGREEMENT,
CANCELLATION OF THE ESCROW AND THE DELIVERY TO AND RETENTION OF THE
DEPOSIT BY SELLER AS LIQUIDATED DAMAGES PURSUANT TO THIS SECTION
10(B), ALL OF
(16)
THE RIGHTS AND OBLIGATIONS OF BUYER AND SELLER UNDER THIS AGREEMENT
SHALL BE TERMINATED.
BUYER AND SELLER ACKNOWLEDGE THAT THEY HAVE READ AND UNDERSTAND
THE PROVISIONS OF THIS SECTION 10(B) AND BY THEIR INITIALS IMMEDIATELY
BELOW AGREE TO BE BOUND BY ITS TERMS.
BUYER: SELLER:
------------------ -----------------
(Initials) (Initials)
C. BUYER'S REMEDIES. In the event of a default by Seller hereunder,
the Deposit shall immediately be returned to Buyer, Seller shall pay all
escrow cancellation and title charges and Buyer may, at its option (i)
terminate this Agreement, (ii) specifically enforce the terms and
conditions of this Agreement, (iii) exercise any remedy available at law or
in equity, or (iv) avail itself of any combination of the foregoing.
11. SELLER'S REPRESENTATIONS AND WARRANTIES. As a material inducement
to the execution and delivery of this Agreement by Buyer and the performance
by Buyer of its duties and obligations hereunder, Seller does hereby
acknowledge, warrant, represent and agree to and with Buyer that as of the
Effective Date and as of the Closing Date:
A. DELIVERY OF WRITTEN MATERIALS. Seller has not made to Buyer
any misstatement of any material fact relating to the Property or this
Agreement, nor failed to deliver to Buyer any written materials in
Seller's possession or of which Seller has knowledge which contain
information that would have a material adverse impact on Buyer's
ability to use and operate the Property as it is currently being used
and operated or the marketability of the Property, and all written
materials delivered to Buyer (including, without limitation, all of
the Documents) are true, accurate and complete in all material
respects.
B. COMPLIANCE WITH LAWS. Seller has received no notice of and
to Seller's knowledge, there is no violation or alleged violation of
any legal requirement affecting the Property, including, without
limitation, any violation or alleged violation of any local, state or
federal environmental, zoning, handicap or fire law, ordinance, code,
regulation, rule or order, and specifically including, without
limitation, variances or special permits affecting the Property and
the Americans With Disabilities Act.
C. LITIGATION. Seller has received no notice of and there is
no pending or, to Seller's knowledge, threatened litigation or
governmental
(17)
proceeding affecting Seller, Guarantor, or the Property, that relates to
the Property, the validity or enforceability of this Agreement, the
Closing Lease, the Guaranty, or any instrument or document to be
delivered by Seller in connection with the transactions contemplated
hereby. Seller has received no notice of and there is no pending or, to
Seller's knowledge, threatened litigation or governmental proceeding
affecting (i) Seller (and not relating to the Property) which would have
a material adverse effect upon Seller's ability to perform its
obligations under this Agreement or the Closing Lease or (ii) Guarantor's
ability to perform its obligations under the Guaranty.
D. OTHER AGREEMENTS. There are no agreements, instruments,
documents or understandings, oral or written, with any person, entity
or governmental authority affecting the Property or which could give
rise to claims affecting the Property after the Closing Date, except
those disclosed and specifically set forth in writing by Seller to
Buyer during the Contingency Period.
E. GOVERNMENTAL ACTIONS. There is no pending or, to Seller's
knowledge, threatened or proposed (i) proceeding or governmental
action to modify the zoning classification of, or to condemn, or
purchase in lieu thereof, all or any part of the Property; (ii)
reassessment or special assessments or penalties or interest with
respect to real estate taxes or any other assessments applicable to
the Property, other than any reassessment that may result solely from
the sale of the Property to Buyer; (iii) proceeding before any court
or administrative agency, the adverse resolution of which would have a
materially adverse effect on the value or operations of the Property;
or (iv) rent controls, governmental moratoria or environmental
controls affecting the Property, or any other impediments that might
significantly interfere with the Buyer's use or disposition of the
Property or the value or operations of the Property and Seller has
received no notice of any of the above.
F. DUE AUTHORIZATION/SELLER. Seller is a California
corporation organized, validly existing and in good standing under the
laws of the State of California. Seller has full power to execute,
deliver and carry out the terms and provisions of this Agreement, the
Closing Lease and each of the other agreements, instruments and
documents herein required to be made or delivered by Seller pursuant
hereto, and has taken all necessary action in connection with the
execution, delivery and performance of this Agreement, the Closing
Lease and such other agreements, instruments and documents. The
individuals executing this Agreement, the Closing Lease and all other
agreements, instruments and documents herein required to be made or
delivered by Seller
(18)
pursuant hereto on behalf of Seller are and shall be duly authorized to
sign the same on Seller's behalf and to bind Seller thereto.
G. DUE AUTHORIZATION/GUARANTOR. Guarantor is a California
corporation organized, validly existing and in good standing under the
laws of the State of California. Guarantor has full power to execute,
deliver and carry out the terms and provisions of the Guaranty, and
has taken all necessary action in connection with the execution,
delivery and performance of the Guaranty. The individuals executing
the Guaranty on behalf of Guarantor are and shall be duly authorized
to sign the same on Guarantor's behalf and to bind Guarantor thereto.
H. ENFORCEABILITY/SELLER. This Agreement has been, and the
Closing Lease each and all of the other agreements, instruments and
documents herein required to be made or delivered by Seller pursuant
hereto have been, or on the Closing Date will have been, executed by
Seller and when so executed, are and shall be legal, valid, and
binding obligations of Seller enforceable against Seller in accordance
with their respective terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium, and other similar laws
affecting the rights of creditors generally and, as to enforceability,
the general principles of equity (regardless of whether enforcement is
sought in a proceeding in equity or at law).
I. ENFORCEABILITY/GUARANTOR. The Guaranty has been, or on the
Closing Date will have been, executed by Guarantor and when so
executed, are and shall be a legal, valid, and binding obligation of
Guarantor enforceable against Guarantor in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization,
moratorium, and other similar laws affecting the rights of creditors
generally and, as to enforceability, the general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity
or at law).
J. NO CONFLICT/SELLER. The execution and delivery of, and
consummation of the transactions contemplated by this Agreement, the
Closing Lease or any of the other agreements, instruments and
documents to be executed in connection herewith are not prohibited by,
and will not conflict with, constitute grounds for termination of, or
result in the breach of any of the agreement or instrument to which
Seller is now a party or by which it or the Property is bound, or any
order, rule or regulation of any court or other governmental agency or
official.
(19)
K. NO CONFLICT/GUARANTOR. The execution and delivery of, and
consummation of the transactions contemplated by the Guaranty are not
prohibited by, and will not conflict with, constitute grounds for
termination of, or result in the breach of any of the agreement or
instrument to which Guarantor is now a party or by which it is bound,
or any order, rule or regulation of any court or other governmental
agency or official.
L. ENVIRONMENTAL MATTERS. To Seller's knowledge (i) no
asbestos or PCB compounds were used in the construction of the
Improvements nor are any asbestos or PCB compounds located in, at or
upon the Property; (ii) the Property is not in violation of any
Environmental Law (as defined below); and (iii) there are no Hazardous
Materials (as defined below) present on the Property other than the
Excluded Materials (as defined below). During the time in which
Seller owned the Property, neither Seller nor, to Seller's knowledge,
any third party has placed, used, generated, stored, or disposed of
on, under or about the Property, or transported to or from it, any
Hazardous Material (as defined below) other than Excluded Materials.
Seller has received no notice from any governmental agency of any
investigation or proceeding by such agency concerning the presence or
alleged presence of Hazardous Materials on the Property. To Seller's
knowledge, there are no underground storage tanks located on the Real
Property. There are no present, pending or, to Seller's knowledge,
threatened actions or proceedings by any governmental agency or any
other entity regarding public health risks or the environmental
condition of the Property, or the disposal or presence of Hazardous
Material, or regarding any Environmental Law (collectively,
"ENVIRONMENTAL ACTIONS"), and Seller has not received any notice of
any such Environmental Actions. During Seller's period of ownership of
the Property there have been no Environmental Actions and, to Seller's
knowledge, prior to Seller's acquisition of the Property there were no
Environmental Actions. To Seller's knowledge, the Property
(including underlying groundwater), and the use and operation thereof,
have been and are currently in compliance with all Environmental Laws.
To Seller's knowledge, all governmental permits and licenses required
under Environmental Laws are in effect, and Seller is in compliance
therewith. To Seller's knowledge, there is no proceeding or inquiry by
any governmental agency or authority with respect to the presence of
Hazardous Materials on the Property or the migration thereof from or
to other property, and Seller has not received any notice of any such
proceeding.
The term "ENVIRONMENTAL LAWS" means all federal, state or local
laws, ordinances, requirements and regulations (including consent
decrees and administrative orders) relating to health, safety,
industrial hygiene, waste disposal, or the protection of the
environment, including, without limitation: the
(20)
federal Comprehensive Environmental Response, Compensation and Liability
Act of 1980, the federal Superfund Amendments and Reauthorization Act of
1986, the federal Resource Conservation and Recovery Act of 1976, the
federal Clean Air Act, the federal Water Pollution Control Act and
federal Clean Water Act of 1977, the federal Insecticide, Fungicide and
Rodenticide Act, the federal Pesticide Act of 1978, the federal Toxic
Substances Control Act, the federal Safe Drinking Water Act, the federal
Hazardous Materials Transportation Act, and all amendments thereto and
regulations adopted and publications promulgated pursuant thereto. The
term "HAZARDOUS MATERIALS" includes oil and petroleum products,
asbestos, polychlorinated biphenyls, radon and urea formaldehyde, and
all other materials classified as hazardous or toxic under any
Environmental Law. The term "EXCLUDED MATERIALS" means (a) ordinary
office supplies, (b) household cleaning supplies and (c) the materials
used by the tenants of the Property as of the date hereof in the
ordinary course of their business at the Property, in each case only so
long as the presence and use thereof does not violate any Environmental
Law and so long as such use is in accordance with the terms of the
applicable Lease.
M. BANKRUPTCY MATTERS. Neither Seller nor Guarantor has made a
general assignment for the benefit of creditors, filed any voluntary
petition in bankruptcy or suffered the filing of an involuntary
petition by its creditors, suffered the appointment of a receiver to
take possession of substantially all of its assets, suffered the
attachment or other judicial seizure of substantially all of its
assets, admitted its inability to pay its debts as they come due, or
made an offer of settlement, extension or composition to its creditors
generally.
N. INSURANCE. Seller carries fire and extended coverage
insurance with respect to the Property in the amount of the full
replacement value thereof and adequate liability insurance. All
insurance is in full force and effect. To Seller's knowledge, the
Property complies with all requirements of each such policy and Seller
has not received from any of the insurers thereunder any notice
requiring or suggesting that any work be performed at the Property.
O. APPROVALS. All Approvals necessary for the occupancy,
operation, maintenance and ownership of the Property are in full force
and effect and Seller has not received notice of any intention on the
part of the issuing authority to cancel, suspend or modify any of the
Approvals or to take any action or institute any proceeding to effect
such cancellation, suspension or modification. The Property is
operated and occupied in compliance with each of the Approvals.
(21)
P. LEASES. Except for that certain Communications Site Lease
Agreement (Building) by and between Nextel of California, Inc., a
Delaware corporation d/b/a Nextel Communications and Seller (the
"NEXTEL LEASE"), there are no Leases.
12. BUYER'S REPRESENTATIONS AND WARRANTIES. Buyer hereby makes the
following representations and warranties to Seller as of the Effective Date
and as of the Closing Date:
A. DUE AUTHORIZATION. Buyer is a limited partnership, validly
existing and in good standing under the laws of the State of Delaware.
Buyer has full power to execute, deliver and carry out the terms and
provisions of this Agreement and each of the other agreements,
instruments and documents herein required to be made or delivered by
Buyer pursuant hereto, and has taken all necessary action to authorize
the execution, delivery and performance of this Agreement and such
other agreements, instruments and documents. The individuals
executing this Agreement and all other agreements, instruments and
documents herein required to be made or delivered by Buyer pursuant
hereto on behalf of Buyer are and shall be duly authorized to sign the
same on Buyer's behalf and to bind Buyer thereto.
B. ENFORCEABILITY. This Agreement has been, and each and all
of the other agreements, instruments and documents herein required to
be made or delivered by Buyer pursuant hereto have been, or on the
Closing Date will have been, executed by Buyer or on behalf of Buyer,
and when so executed, are and shall be legal, valid, and binding
obligations of Buyer enforceable against Buyer in accordance with
their respective terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium, and other similar laws affecting the
rights of creditors generally and, as to enforceability, the general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
13. ACTIONS AFTER THE EFFECTIVE DATE. The parties covenant to do the
following through the Closing Date:
A. TITLE. Seller shall not make or permit any changes to the
Property or to the condition of title to the Property that would
change the Approved Title or the Approved Survey except with Buyer's
advance written consent, which consent may be withheld in Buyer's sole
discretion. In this regard, Seller shall not sell, assign or create
any right, title or interest in the Property, or any part thereof, or
create, or permit to exist, any lien,
(22)
encumbrance or charge thereon, without the prior consent of Buyer, which
consent may be withheld in Buyer's sole discretion.
B. MAINTENANCE AND OPERATION OF PROPERTY. Seller shall
maintain the Property in substantially its current condition, shall
maintain existing insurance coverage in full force and effect, and
shall operate and maintain the Property in compliance with all
applicable laws and regulations, shall not delay or defer any repair
or maintenance item, and shall pay all bills and obligations arising
from the Property as payment becomes due. Seller shall not make any
material alterations to or upon the Property, except with Buyer's
advance written consent, which consent may be withheld in Buyer's sole
discretion.
C. LEASES AND AGREEMENTS. Seller shall not amend or terminate
the Nextel Lease or any of the Approved Contracts, shall not make any
other agreement concerning the Property, including, without
limitation, any new leases of space in the Property, without Buyer's
advance written consent, which may be withheld in Buyer's sole
discretion, and shall perform all of its obligations under the
Approved Contracts and the Nextel Lease.
D. REPRESENTATIONS AND WARRANTIES. Each party shall use its
reasonable best efforts to prevent any act or omission that would
render any of its representations and warranties herein untrue or
misleading, and shall immediately notify the other party if such act
or omission occurs.
E. ENTRY. As of the Effective Date, at all times prior to the
Closing, Buyer and its agents, employees and contractors
(collectively, "PERMITTEES") may enter the Real Property for purposes
of performing Buyer's Due Diligence Review and Environmental Audit.
Buyer and its Permittees may enter upon the Land and Improvements,
including all leased areas, to perform such tests and inspections as
Buyer may deem necessary or desirable, including, without limitation,
conducting: soils, ground water, engineering and Hazardous Materials
tests; inspections of all roofs, foundations, walls and structural
components in the Improvements; inspections of all mechanical systems,
building materials, office spaces, utility areas, storage and
warehouse areas; operating expense, income and other financial
analyses and real estate tax analyses; inspections and audits of (and
making copies of) any and all books, records, correspondence, reports
and other files maintained by Seller relating to the Property; and
such other tests and inspections as Buyer, in its discretion, deems
necessary or desirable in connection with its Due Diligence Review
and/or Environmental Audit. Buyer shall repair any damage and
indemnify, defend and hold Seller harmless from any cost, claim or
expense arising directly from such entry by Buyer or its Permittees or
from the performance of any such
(23)
tests by Buyer or its Permittees, except that Buyer's agreements as set
forth in this sentence shall not extend to any condition that is
discovered by Buyer to be present on, under or about the Real Property.
F. APPLICATIONS. Following the Effective Date, Seller shall
not make application to any governmental entity for any Approvals or
any change in the zoning, affecting the Real Property, except in each
case with Buyer's advance written consent.
14. DAMAGE TO PROPERTY; TAKING.
A. TAKING. If the Property or any part thereof is taken or is
the subject of a notice of taking by eminent domain prior to the
Closing Date, Seller shall promptly notify Buyer. Within ten (10)
Working Days after such notice, Buyer shall give notice that it elects
to (a) terminate this Agreement, in which event Escrow Holder shall
return the Deposit to Buyer and the parties shall have no further
obligations hereunder, or (b) proceed to Closing, in which event
Seller shall pay over and assign to Buyer all awards recovered or
recoverable on account of such taking. If Buyer elects to proceed
under clause (b) above, Seller shall not compromise, settle, or adjust
any claims to such awards without Buyer's prior written consent.
B. DAMAGE. Risk of loss up to and including the Closing Date
shall be borne by Seller. In the event of any material damage to or
destruction of the Property or any portion thereof, Buyer may, at its
option, by notice to Seller given within ten (10) Working Days after
Seller notifies Buyer in writing of such damage or destruction (and if
necessary the Closing Date shall be extended, but not beyond the
Outside Closing Date, to give Buyer the full 10-day period to make
such election): (i) terminate this Agreement, in which event Escrow
Holder shall return the Deposit to Buyer and the parties shall have no
further obligations hereunder, or (ii) proceed under this Agreement
with no adjustment of the Purchase Price, receive any insurance
proceeds (including any rent loss insurance applicable to any period
on and after the Closing Date) due Seller as a result of such damage
or destruction and assume responsibility for such repair, and Buyer
shall receive a credit at Closing for any deductible, uninsured or
coinsured amount under said insurance policies. If Buyer elects (ii)
above, Seller will cooperate (at no material expense to Seller) with
Buyer in obtaining the insurance proceeds and such agreements from
Seller's insurers. If the Property is not materially damaged, then
Buyer shall not have the right to terminate this Agreement, but Seller
shall, at its cost, repair the damage before the Closing in a manner
reasonably satisfactory to Buyer or if repairs cannot be completed
before the Closing, credit Buyer at Closing for the reasonable cost to
(24)
complete the repair. "MATERIAL DAMAGE" and "MATERIALLY DAMAGED" means
damage (x) reasonably exceeding $250,000, or (y) that entitles any
tenant of the Property to terminate its lease, or (z) which, in
Buyer's reasonable estimation, will take longer than 90 days to
repair.
C. WAIVER. Failure of Buyer to timely provide a notice of
election in accordance with this SECTION 14, shall be deemed an
election by Buyer to terminate this Agreement. Seller and Buyer each
expressly waive the provisions of California Civil Section 1662 and
hereby agree that the provisions of this SECTION 14 shall govern the
parties' obligations in the event of any damage or destruction to the
Property or the taking of all or any part of the Real Property.
15. SURVIVAL. All representations and warranties by the respective
parties contained herein are intended to and shall remain true and correct as
of the Closing, shall be deemed to be material, and shall survive the
delivery of the Deed and transfer of title for a period of twelve (12)
months. Any covenants and conditions herein that must be operative after
delivery of the Deed to be effective shall be so operative and shall not be
deemed to have been merged in the Deed.
16. SUCCESSORS AND ASSIGNS. The terms, covenants and conditions herein
contained shall be binding upon and inure to the benefit of the successors
and assigns of the parties hereto. This Agreement and all rights of Buyer
hereunder may be assigned or transferred by Buyer to any of its affiliates,
in which event all instruments, documents and agreements required to be
delivered to the Buyer hereunder shall be delivered to, and run for the
benefit of such entity, and such entity (rather than Buyer) shall execute and
deliver any instruments, documents or agreements required to be executed and
delivered by Buyer hereunder.
17. NO THIRD PARTY BENEFITS. This Agreement is made for the sole
benefit of the Buyer and Seller and their respective successors and assigns,
and no other person shall have any right or remedy or other legal interest of
any kind under or by reason of this Agreement.
18. COUNTERPARTS. This Agreement may be executed in multiple
counterparts and shall be valid and binding with the same force and effect as
if all parties had executed the same Agreement.
19. ENTIRE AGREEMENT. This Agreement contains all of the covenants,
conditions and agreements between the parties and shall supersede all prior
correspondence, agreements and understandings, both verbal and written. The
parties intend that this Agreement constitutes the complete and exclusive
statement of its terms and that no extrinsic evidence may be introduced in
any proceeding involving this Agreement.
(25)
20. ATTORNEYS' FEES. In the event of any litigation regarding the
rights and obligations under this Agreement, the prevailing party shall be
entitled to reasonable attorneys, fees and court costs.
21. NOTICES. All notices required or permitted to be given pursuant to
the terms hereof shall be in writing and shall be delivered either by (a)
certified mail, return receipt requested, in which case notice shall be
deemed delivered five (5) Working Days after deposit, postage prepaid in the
U.S. mail, (b) a reputable messenger service or a nationally recognized
overnight courier, in which case notice shall be deemed delivered one (1)
Working Day after deposit with such messenger or courier, (c) facsimile or
other telecopy transmission (followed with "hard copy" sent by a nationally
recognized overnight courier or mail as aforesaid), in which case notice
shall be deemed delivered when the facsimile or other telecopy transmission
is received (as evidenced by the sender's electronic confirmation), or (d)
personal delivery with receipt acknowledged in writing, in which case notice
shall be deemed delivered when received. All such notices shall be addressed
to Seller at Seller's Address, with a copy to Sullivan, Hill, Xxxxx, Rez,
Xxxxx & LaBazzo 000 "X" Xxxxxx, Xxx Xxxxx, Xxxxxxxxxx, 00000, Attention:
Xxxxx X. Xxxx, Facsimile Number (000) 000-0000 to Buyer at Buyer's Address,
with a copy to Xxxxx, Xxxxx & Xxxxx, 000 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx, Xxx
Xxxxxxx, Xxxxxxxxxx 00000, Attention: Xxxxx Xxxxxx Xxxxxxx, Esq., Facsimile
Number: (000) 000-0000; and to Escrow Holder at Escrow Holder's Address.
The foregoing addresses may be changed by written notice to the other party
as provided herein.
22. CONSTRUCTION OF AGREEMENT. In construing this Agreement, all
headings and titles are for the convenience of the parties only and shall not
be considered a part of this Agreement. Whenever required by the context,
the singular shall include the plural and the masculine shall include the
feminine and vice versa. This Agreement shall not be construed as if
prepared by one of the parties, but rather according to its fair meaning as a
whole, as if both parties had prepared it. All Exhibits attached hereto are
incorporated in this Agreement by reference thereto.
23. TIME. Time is of the essence of every provision herein contained.
Whenever the date or deadline for any action to be taken is not a Working
Day, the relevant date or deadline shall be the next Working Day.
24. APPLICABLE LAW. This Agreement shall be governed by the internal
laws of the state in which the Real Property is located.
25. NO ORAL MODIFICATION OR WAIVER. This Agreement may not be changed
or amended orally, but only by an agreement in writing. No waiver shall be
effective hereunder unless given in writing, and waiver shall not be inferred
from any conduct of either party.
(26)
26. LIMITATION OF LIABILITY. In accordance with the Declaration of
Trust of Cabot Industrial Trust, a Maryland real estate investment trust, all
persons dealing with the trust shall look to the assets of the trust for the
enforcement of any claim against the trust, as neither the trustees,
officers, employees, partners nor shareholders of the trust assume any
personal liability for obligations entered into by or on behalf of the trust.
27. MARKETING OF PROPERTY. Unless and until this Agreement is duly
terminated pursuant to the terms hereof, Seller shall not enter into any
negotiations, understandings or agreements with any party other than Buyer
relating to the sale, transfer or other disposition of the Property or any
portion thereof and Seller and the Broker shall not offer the Property or any
portion thereof for sale to any other party.
28. BROKERAGE COMMISSION. On the Closing Date, Seller shall pay a real
estate commission to the Broker. Seller and Buyer each represent and warrant
to the other party that its sole contact with the other party or the Property
regarding this transaction has been directly with the other party or through
Broker. Seller and Buyer further represent and warrant to each other that no
other broker or finder can properly claim a right to a commission or finder's
fee based upon contacts between the claimant and the warranting party with
respect to the other party or the Property. Seller and Buyer shall
indemnify, defend and hold the other party harmless from and against any
loss, cost or expense, including, but not limited to, attorneys' fees and
court costs, resulting from any claim for a fee or commission by any broker
or finder in connection with the Property, and this Agreement resulting from
the indemnifying party's actions.
29. INDEMNITY. Seller hereby agrees to indemnify Buyer and its
successors, assigns, and the affiliates, directors, officers, employees and
partners of any of them, and hold each of them harmless from any and all
claims, liabilities, damages, and penalties and any and all loss, cost, or
expense incurred by Buyer incident to, resulting from, or in any way arising
out of any tort claim or breach of contract claim or other claim for money
due and owing in connection with the ownership or operation of the Property
but only to the extent that such claim arises from circumstances, acts or
omissions which occurred prior to the Closing. Buyer hereby agrees to
indemnify Seller and its successors, assigns, and the affiliates, directors,
officers, employees and partners of any of them and hold each of them
harmless from any and all claims, liabilities, damages, and penalties and any
and all loss, costs, or expense incurred by the Seller incident to, resulting
from, or in any way arising out of any tort claim or breach of contract claim
or other claim for money due and owing in connection with the ownership or
operation of the Property but only to the extent that such claim arises from
circumstances, acts or omissions which occurred after the Closing. Each of
the parties hereto further agrees, upon notice from the other, to contest any
demand, claim, suit, or action against which each party has hereinabove
agreed to indemnify and hold the other and all such other parties harmless,
and to defend any action that may be brought in connection with any such
demand, claim, suit, or action, or with respect to which each party has
hereinabove
(27)
agreed to hold the other and all such other parties harmless, and to bear all
costs and expenses of such contest and defense. The indemnities set forth
herein shall be deemed to be material and shall survive the delivery of the
Deed and transfer of title.
30. INFORMATION AND AUDIT COOPERATION. At Buyer's request, at any time
before or after the Closing, Seller shall provide to Buyer's designated
independent auditor access to the books and records of the Property, and all
related information regarding the period for which Buyer is required to have
the Property audited under the regulations of the Securities and Exchange
Commission, and Seller shall provide to such auditor a representation letter
regarding the books and records of the Property, in substantially the form of
EXHIBIT C attached hereto, in connection with the normal course of auditing
the Property in accordance with generally accepted auditing standards. Buyer
agrees to indemnify and hold harmless Seller from any claim, damage, loss, or
liability to which Seller is at any time subjected by any person who is not a
party to this Agreement as a result of Seller's compliance with this
paragraph, except to the extent any such claim, damage, loss or liability
arises from Seller's fraud or intentional misrepresentation.
31. 1031 EXCHANGE. Buyer may consummate the purchase of the Property
as part of a so-called like kind exchange (the "Exchange") pursuant to
Section 1031 of the Internal Revenue Code of 1986, as amended (the "Code"),
provided that: (i) the Closing shall not be delayed or affected by reason of
the Exchange nor shall the consummation or accomplishment of the Exchange be
a condition precedent or condition subsequent to Buyer's obligations under
this Agreement; (ii) Buyer shall effect the Exchange through an assignment of
this Agreement, or its rights under this Agreement, to a qualified
intermediary; (iii) Seller shall not be required to take an assignment of the
purchase agreement for the relinquished property or be required to acquire or
hold title to any real property for purposes of consummating the Exchange;
and (iv) Buyer shall pay any additional costs that would not otherwise have
been incurred by Buyer or Seller had Buyer not consummated its purchase
through the Exchange. Seller shall not, by this agreement or acquiescence to
the Exchange, (1) have its rights under this Agreement affected or diminished
in any manner, or (2) be responsible for compliance with or be deemed to have
warranted to Buyer that the Exchange in fact complies with Section 1031 of
the Code.
(28)
IN WITNESS WHEREOF, the parties hereto have executed one or more copies
of this Agreement as a sealed instrument the day and year first above written.
SELLER:
I-PAC MANUFACTURING, INC.,
a California corporation
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
BUYER:
CABOT INDUSTRIAL PROPERTIES, L.P.,
a Delaware limited partnership
By: Cabot Industrial Trust,
a Maryland real estate investment
trust its general partner
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
(29)
EXHIBIT A
LEGAL DESCRIPTION OF THE LAND
XXX 00 XX XXXXXXXX XXXXX XX. 00-00 XXXX XX. 0, XX THE CITY OF CARLSBAD,
COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO THE MAP THEREOF NO.
11288, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY.
EXCEPTING THEREFROM 50% OF ALL OIL, MINERAL, GAS, AND OTHER HYDROCARBON
SUBSTANCES BELOW A DEPTH OF 500 FEET UNDER THE REAL PROPERTY, WITHOUT RIGHT
OF SURFACE ENTRY, AS RESERVED IN DEED BY CARLSBAD PROPERTIES, A PARTNERSHIP
RECORDED JULY 5, 1978 AS FILE/PAGE NO. 78-279136 OF OFFICIAL RECORDS.
(30)
EXHIBIT B
DOCUMENTS
1. OPERATING STATEMENTS. Operating statements of the Property for the 3 years
preceding the date of this Agreement and the current year-to-date
("OPERATING STATEMENTS").
2. MANAGEMENT AND/OR LEASING AGREEMENTS. Copies of any management and/or
leasing agreements under which the Property is managed and/or leased.
3. TAX STATEMENTS. Copies or a summary of ad valorem tax statements for the
current or most recently available tax period and for the prior 36 months
including the Property's tax identification number(s); and latest value
renditions.
4. INSURANCE. Copies of Seller's certificate of insurance for the Property,
all insurance policies, a loss history, a list of any current claims
relating to the Property, and any notices received by insurance carriers.
5. BUDGET. Seller's most recent budget for the Property, including the
forthcoming year, if applicable
6. SERVICE CONTRACTS. A list together with copies of all security,
maintenance, service, supply, equipment rental and other contracts related
to the operation of the Property ("SERVICE CONTRACTS").
7. PROCEEDINGS. Copies of any documents or materials relating to any current
litigation, investigation, condemnation, or other proceeding pending or
threatened against Seller or affecting the Property.
8. TANGIBLE PERSONAL PROPERTY. A current inventory of all fixtures (other
than the Seller's Property).
9. MAINTENANCE RECORDS. All maintenance work orders for the prior 12 months.
10. LIST OF CAPITAL IMPROVEMENTS. A list of all capital improvements performed
on the Property within the prior 24 months.
11. REPORTS. Any environmental, geotechnical, soil, engineering and drainage
reports, assessments, audits and surveys.
(31)
12. AS-BUILT SURVEY; TITLE POLICY. All existing as-built surveys of the
Property; and all existing title policies related to the Property.
13. SITE PLANS. All site plans relating to the Property.
14. AS-BUILT PLANS AND SPECIFICATIONS. All as-built construction,
architectural, mechanical, electrical, plumbing, landscaping and grading
plans and specifications relating to the Property.
15. PERMITS AND WARRANTIES. Copies of all warranties and guaranties, permits,
certificates of occupancy, licenses and other approvals.
16. GENERAL. Any other documents or information pertaining to the Property in
Contributor's possession or control or in the possession or control of
Contributor's agents or independent contractors.
17. FINANCIAL STATEMENTS. Copies of financial statements reflecting the
operation of the Property for the prior 2 calendar years, including
statements of cash flow and year-end balance sheets, and statements of
income, expense, accounts payable and accounts receivable for each such
year, each prepared in accordance with generally accepted accounting
principles consistently applied, and fairly presenting the financial
position of Contributor with respect to the Property at the end of each
such year and the results of the operations thereof for such year and
copies of any financial statements reflecting the operation of the Property
for the three years prior to that to the extent that Seller has copies of
such statements in its possession or control.
(32)
EXHIBIT C
AUDIT LETTER
(Date)
(To Buyer's Auditors)
------------------------------
------------------------------
------------------------------
RE:
Dear Sirs:
We are writing at your request to confirm our understanding that the
audit of the statement of operating income for the year ended ,
199 , was made on behalf of Cabot Industrial Trust for the purpose of
expressing an opinion as to whether the statement of operating income
presents fairly, in all material respects, the results of operations of
[Name of Project] in conformity with generally accepted accounting
principles. These representations are made exclusively to [Auditor] and not
to the buyer of the Project or any other third party. In connection with
your , 199 audit we confirm, to the best of our knowledge and
belief, with respect to our daily operations and without independent inquiry
or investigation, the following representations made during your audits:
1. We have made available to you all financial records and related data
concerning this Project, which are in our possession.
2. We are not aware of any:
(a) Irregularities involving any member of management or employees that
could have a materially adverse effect on the statement of operating
income.
(b) Notices of violations of laws or regulations, the effects of which
should be considered for disclosure in the financial statements or as
a basis for recording a loss contingency.
(33)
(c) Material liabilities, gain or loss contingencies or other transactions
(including oral and written guarantees) that are required to be but
have not been accrued or disclosed).
(d) Material events that have occurred subsequent to , 199
that would require material adjustment to the statement of operating
income.
3. The Company has complied with all material aspects of contractual
agreements relating to the Project (e.g. management contracts) that would
have a material affect on the statement of operating in the event of
noncompliance.
4. All significant payments to affiliated companies of the undersigned have
been properly recorded or disclosed in the financial statements.
[ ]
-------------------------------------
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
(34)
EXHIBIT D
CLOSING LEASE
[TO BE ATTACHED PURSUANT TO THE
FIRST AMENDMENT]
(35)
EXHIBIT E
GUARANTY
[TO BE ATTACHED PURSUANT TO THE
FIRST AMENDMENT]
(36)
TABLE OF CONTENTS
PAGE
----
A. DEFINED TERMS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(1)
1. DEPOSIT AND PAYMENT OF PURCHASE PRICE. . . . . . . . . . . . . . . . . .(5)
2. DELIVERY OF MATERIALS FOR REVIEW . . . . . . . . . . . . . . . . . . . .(6)
3. CONTINGENCIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(6)
4. TITLE COMMITMENT; SURVEY; SEARCHES . . . . . . . . . . . . . . . . . . .(7)
5. DEED; TITLE POLICY . . . . . . . . . . . . . . . . . . . . . . . . . . (10)
6. PRORATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (10)
7. CLOSING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (10)
8. ESCROW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (11)
9. CLOSING COSTS; PROPERTY COSTS. . . . . . . . . . . . . . . . . . . . . (15)
10. REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (15)
11. SELLER'S REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . . (17)
12. BUYER'S REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . (21)
13. ACTIONS AFTER THE EFFECTIVE DATE . . . . . . . . . . . . . . . . . . . (22)
14. DAMAGE TO PROPERTY; TAKING . . . . . . . . . . . . . . . . . . . . . . (23)
15. SURVIVAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (24)
16. SUCCESSORS AND ASSIGNS . . . . . . . . . . . . . . . . . . . . . . . . (25)
17. NO THIRD PARTY BENEFITS. . . . . . . . . . . . . . . . . . . . . . . . (25)
18. COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (25)
(i)
TABLE OF CONTENTS
(CONTINUED)
PAGE
----
19. ENTIRE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . (25)
20. ATTORNEYS' FEES. . . . . . . . . . . . . . . . . . . . . . . . . . . . (25)
21. NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (25)
22. CONSTRUCTION OF AGREEMENT. . . . . . . . . . . . . . . . . . . . . . . (26)
23. TIME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (26)
24. APPLICABLE LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . (26)
25. NO ORAL MODIFICATION OR WAIVER . . . . . . . . . . . . . . . . . . . . (26)
26. LIMITATION OF LIABILITY. . . . . . . . . . . . . . . . . . . . . . . . (26)
27. MARKETING OF PROPERTY. . . . . . . . . . . . . . . . . . . . . . . . . (26)
28. BROKERAGE COMMISSION . . . . . . . . . . . . . . . . . . . . . . . . . (26)
29. INDEMNITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (27)
30. INFORMATION AND AUDIT COOPERATION. . . . . . . . . . . . . . . . . . . (27)
31. 1031 EXCHANGE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . (28)
(ii)
