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EXHIBIT 10.2
AGREEMENT FOR PURCHASE AND SALE
OF SACRAMENTO PROPERTIES
THIS AGREEMENT FOR PURCHASE AND SALE (this "Agreement") is made and entered
into as of November 24, 1997, by and between Xxxxxx Sacramento Associates, a
California general partnership ("Seller"), and Pacific Gulf Properties Inc., a
Maryland corporation ("Buyer").
RECITALS
A. Seller is the owner of certain improved real property consisting
generally of the business parks situated in Sacramento, California at 9912, 9940
and 0000 Xxxxxxxx Xxxx Xxxxx, commonly known as Xxxxxxx 00 Business Center, and
0000 Xxxxxxxx Xxxx Xxxxx, commonly known as Xxxxxxxx Business Center (each
separately, a "Property", and the Properties collectively and as more
specifically described below, the "Sacto Portfolio").
B. Buyer desires to purchase the Sacto Portfolio from Seller and Seller
desires to sell the Sacto Portfolio to Buyer, subject to the terms and
conditions contained in this Agreement.
AGREEMENT
NOW, THEREFORE, Buyer and Seller do hereby agree as follows:
ARTICLE I
BASIC DEFINITIONS
Closing Date: The term "Closing Date" shall mean the earliest of (a) the
date that is fifteen (15) days following the expiration or earlier termination
of the Inspection Period, (b) any earlier date approved in writing by Buyer and
Seller for the close of escrow with respect to the purchase and sale of the
Sacto Portfolio or (c) December 31, 1997.
Code. The term "Code" shall mean the Internal Revenue Code of 1986, as
amended, and the regulations promulgated thereunder.
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TABLE OF CONTENTS
ARTICLE I BASIC DEFINITIONS................................................. 1
ARTICLE II PURCHASE AND SALE................................................ 3
ARTICLE III CONDITIONS PRECEDENT............................................ 7
ARTICLE IV COVENANTS, WARRANTIES AND REPRESENTATIONS........................ 9
ARTICLE V DEPOSIT...........................................................14
ARTICLE VI ESCROW AND CLOSING...............................................15
ARTICLE VII MISCELLANEOUS...................................................19
EXHIBIT A DISCLOSURE STATEMENT
EXHIBIT B INSPECTION LETTER
EXHIBIT C LEGAL DESCRIPTION OF LAND
EXHIBIT D LIST OF TENANT LEASES
EXHIBIT E LIST OF CONTRACTS
EXHIBIT F FORM OF GRANT DEED
EXHIBIT G FORM OF XXXX OF SALE
EXHIBIT H FORM OF ASSIGNMENT AND ASSUMPTION OF INTANGIBLE PROPERTY
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Contract Period. The term "Contract Period" shall mean the period from the
date of this Agreement through and including the Closing Date.
Contracts. The term "Contracts" shall mean all maintenance, service and
other operating contracts, equipment leases and other arrangements or agreements
to which Seller is a party affecting the ownership, repair, maintenance,
management, leasing or operation of the Sacto Portfolio.
Disclosure Statement. The term "Disclosure Statement" shall mean the
statement attached to this Agreement as Exhibit A.
Escrow Company. The term "Escrow Company" shall mean Commonwealth Land
Title Insurance Company, 00 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000; Attn:
Xx. Xxxxxxxx Xxxxxx (telephone no. 000-000-0000).
Improvements. The term "Improvements" shall mean all buildings, structures
and other improvements located on the Land.
Inspection Letter. The term "Inspection Letter" shall mean a letter in the
form attached as Exhibit B to this Agreement, to be delivered by Buyer to Seller
on or prior to the close of the Inspection Period pursuant to Section 2.5 below.
Inspection Period. The term "Inspection Period" shall mean the period
commencing on the date of this Agreement, and expiring at 5:00 p.m. Pacific Time
on December 3, 1997, provided that the Inspection Period may end earlier at
Buyer's election upon delivery by Buyer to Seller of the Inspection Letter
(representing the conclusive waiver by Buyer of any further Inspection Period).
Intangible Property. The term "Intangible Property" shall mean Seller's
rights and interests, if any, in: (a) the Tenant Leases, (b) the Contracts; (c)
any and all transferable or assignable permits, building plans and
specifications, certificates of occupancy, operating permits, sign permits,
development rights and approvals, certificates, licenses, warranties and
guarantees, trade names, service marks, engineering, soils, pest control and
other reports relating to the Sacto Portfolio, tenant lists, advertising
materials, and telephone exchange numbers identified with the Sacto Portfolio;
and (d) all other transferable intangible property, miscellaneous rights,
benefits or privileges of any kind or character with respect to the Sacto
Portfolio, including, without limitation, the right to use the names "Highway 50
Business Center," "Xxxxxxxx Business Center" and any other trade name now used
in connection with any Property.
Land. The term "Land" shall mean, collectively, the several parcels of land
described on Exhibit C to this Agreement, together with all of Seller's rights,
if any (including mineral, air and water rights), privileges and easements
appurtenant to or used in connection with the beneficial use and enjoyment of
said parcels of land, and all of
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Seller's right, title and interest, if any, in and to all roads, easements,
rights of way and alleys adjoining or servicing said parcels of land.
Sacto Portfolio. The term "Sacto Portfolio" shall mean all of Seller's
right, title and interest in and to the Real Property, the Personal Property and
the Intangible Property.
Personal Property. The term "Personal Property" shall mean all furniture,
furnishings, trade fixtures, building systems and equipment (including, without
limitation, HVAC, security and life safety systems) and other tangible personal
property owned by Seller that is located at and used in connection with the
operation of the Real Property.
Property. The term "Property" shall have the meaning set forth in Recital A
above.
Real Property. The term "Real Property" shall mean, collectively, the Land
and the Improvements.
Seller's Knowledge. The term "Seller's knowledge" shall have the meaning
set forth in Section 4.1 below.
Tenant Leases. The term "Tenant Leases" shall mean all leases, rental
agreements or other agreements (including all amendments or modifications
thereto and guaranties thereof) to which Seller is a party or the
successor-in-interest of a party which entitle any person to the occupancy or
use of any portion of the Real Property.
Title Company. The term "Title Company" shall mean Commonwealth Land Title
Company, 00 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000; Attn: Xx. Xxxxxxxx
Xxxxxx (telephone no. 000-000-0000).
ARTICLE 11
PURCHASE AND SALE
Section 2.1 Purchase and Sale. Seller agrees to sell the Sacto Portfolio to
Buyer, and Buyer agrees to purchase the Sacto Portfolio upon all of the terms,
covenants and conditions set forth in this Agreement.
Section 2.2 Purchase Price. The aggregate purchase price for the Sacto
Portfolio (the "Purchase Price") shall be the sum of Eight Million Seven Hundred
Thousand Dollars ($8,700,000). The entire amount of the Purchase Price (less the
Deposit delivered pursuant to Article V below) shall be payable by Buyer to
Seller in cash on the Closing Date through the escrow described in Section 6.1
below.
Section 2.3 Buyer's Review and Seller's Disclaimer.
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(a) Subject to the provisions of subsection 2.3(c) below, during the
Inspection Period Buyer shall be permitted to make a complete review and
inspection of the physical, legal, economic and environmental condition of the
Sacto Portfolio, including, without limitation, any Tenant Leases and Contracts,
books and records maintained by Seller or its agents relating to the Sacto
Portfolio, boundary and other survey-related issues relating to the Real
Property, pest control matters, soil condition, asbestos, PCB, hazardous waste,
toxic substance or other environmental matters, compliance with building,
health, safety, land use and zoning laws, regulations and orders, plans and
specifications, structural, life safety, HVAC and other building system and
engineering characteristics, traffic patterns and all other information
pertaining to the Sacto Portfolio. Without representation or warranty, except as
expressly set forth in Section 4.1 below, Seller shall cooperate in Buyer's
review and provide Buyer with the opportunity to review books and records
maintained by Seller or its agents relating to the Sacto Portfolio, leases,
financial reports, surveys and other third-party inspection reports and similar
non-proprietary or confidential materials in Seller's possession relating to the
Sacto Portfolio (the "Seller's Records"). In addition, Seller shall exercise
reasonable efforts to obtain 3 days prior to the close of the Inspection Period
any tenant estoppel certificates and subordination agreements that Buyer and its
lender may reasonably request. Buyer acknowledges (i) that Seller played no role
in the development or construction of any of the Properties comprising the Sacto
Portfolio, (ii) that Buyer has entered into this Agreement with the intention of
making and relying upon its own investigation of the physical, environmental,
economic and legal condition of the Sacto Portfolio, and (iii) that Buyer is not
relying upon any representations and warranties, other than those specifically
set forth in Section 4.1 below, made by Seller or anyone acting or claiming to
act on Seller's behalf concerning the Sacto Portfolio. Buyer further
acknowledges that it has not received from Seller any accounting, tax, legal,
architectural, engineering, property management or other advice with respect to
this transaction and is relying solely upon the advice of its own accounting,
tax, legal, architectural, engineering, property management and other advisors.
Buyer specifically undertakes and assumes all risks associated with the matters
disclosed by Seller on the Disclosure Statement. Subject to the provisions of
Section 4.1 of this Agreement, Buyer shall purchase the Sacto Portfolio in its
"as is" condition on the Closing Date and assumes the risk that adverse
physical, environmental, economic or legal conditions may not have been revealed
by its investigation. Without limiting the generality of the foregoing, if
Seller has not already done so, then within three (3) days after the date of
this Agreement, Seller shall deliver or cause to be delivered to Buyer, or
otherwise make available for review by Buyer at the applicable property
manager's offices in Sacramento, California, to the extent available from
Seller's Records, and in the possession or control of Seller, the following:
(i) Survey. Any existing, most recent survey of the Real Property.
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(ii) Tax Bills. Copies of the most recent property tax bills and
assessments of the Property.
(iii) Leases. Copies of all Tenant Leases and tenant files.
(iv) Contracts. Copies of all Contracts.
(v) All third party generated reports relating to the condition of the
Sacto Portfolio, including environmental reports, environmental audits, soils
reports, physical and engineering reports, building and improvement plans, and
structural calculations.
(vi) Overating Statements. All income and expense statements, year-end
financial and monthly operating statements and maintenance records for the
three (3) most recent calendar years prior to the Closing Date and, to the
extent available, the current calendar year to date. Buyer shall have the right,
during the Inspection Period, to audit Seller's Records for these time periods,
following reasonable notice and during normal business hours.
(vii) Rent Roll. A current rent roll, together with a rent delinquency
report (the "Rent Roll").
(viii) Permits All government permits and approvals relating to the
Sacto Portfolio (the "Permits").
(b) Except with respect to any claims arising out of any breach of this
Agreement, including, without limitation, covenants, representations or
warranties set forth in Section 4.1 below, Buyer, for itself and its agents,
affiliates, successors and assigns, hereby releases and forever discharges
Seller, ITS agents, affiliates, successors and assigns from any and all rights,
claims and demands at law or in equity, whether known or unknown at the time of
this Agreement, which Buyer has or may have in the future, arising out of the
physical, environmental, economic or legal condition of the Sacto Portfolio (or
any individual Property), including, without limitation, any claim for
indemnification or contribution arising under the Comprehensive Environmental
Response, Compensation, and Liability Act (42 U.S.C. Section 9601, et. seq.) or
any similar federal, state or local statute, rule or ordinance relating to
liability of property owners for environmental matters.
Buyer hereby specifically acknowledges that Buyer has carefully reviewed
this subsection and discussed its import with legal counsel and that the
provisions of this subsection are a material part of this Agreement.
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Buyer
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(c) Seller shall cause its agents to cooperate reasonably with Buyer to
facilitate Buyer's exercise of the rights of review and inspection set forth in
subsection (a) above, and Buyer acknowledges and agrees that its exercise of
such rights shall be subject to the following limitations: (i) any entry onto
the Real Property by Buyer, its agents or representatives, shall be during
normal business hours, following reasonable prior notice to Seller and delivery
to Seller of satisfactory evidence of Buyer's general liability insurance, and,
at Seller's discretion, accompanied by a representative of Seller; (ii) Buyer
shall not conduct any drilling, test borings or other disturbance of the Real
Property for review of soils, compaction, environmental, structural or other
conditions without Seller's prior written consent; (iii) any discussions or
'interviews with any tenants of the Real Property or their personnel shall be
conducted in the presence of Seller or its representatives; (iv) Buyer shall
exercise reasonable diligence not to disturb the use or occupancy of any
occupant of any Property; and (v) Buyer shall indemnify, defend and hold Seller
harmless from all loss, cost, and expense resulting from any entry or
inspections performed by Buyer, its agents or representatives. The provisions of
Section 2.3(c)(v) shall survive any termination of this Agreement, but only for
a period of 24 months after such termination.
Section 2.4 Permitted Title Exceptions. Seller has previously obtained from
Title Company and delivered to Buyer for its review a current preliminary title
report with respect to each Property (collectively, the "Title Reports"),
together with all documents and information pertaining to the exceptions to
title listed in the Title Reports. Buyer shall, at its expense, obtain during
the Inspection Period any surveys of the Real Property desired by Buyer or
required by Title Company as a condition to the issuance of the Title Policies
described in Section 3.1(a)(iii) below (collectively, the "Surveys"). Seller
shall have no obligation to pay the fees or costs of the Surveys. The foregoing
obligation of Buyer shall survive any termination of this Agreement. Buyer may
advise Seller in writing and in reasonable detail, preferably not later than ten
business days prior to the close of the Inspection Period, what exceptions to
title, if any, listed in the then-current Title Reports or disclosed on the
Surveys are not acceptable to Buyer (the "Title Objections"). Buyer shall not,
however, unreasonably express disapproval of any exceptions to title and, prior
to notifying Seller of any Title Objections, shall endeavor in good faith to
cause Title Company to modify and update the Title Reports to reflect requested
corrections and revisions. Seller shall have the remaining period of the
Inspection Period, if any, to give Buyer notice that (a) Seller will remove any
Title Objections from title (or afford the Title Company necessary information
or certifications to permit it to insure over such exceptions), or (b) Seller
elects not to cause such exceptions to be removed. Seller's failure to provide
notice to Buyer prior to the expiration of the Inspection Period as to any Title
Objection shall be deemed an election by Seller not to remove the Title
Objection. If Seller so notifies or is deemed to have notified Buyer that Seller
shall not remove any or all of the Title Objections, Buyer shall have until the
close of the Inspection Period to determine whether (i) to proceed with the
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purchase and take the Sacto Portfolio subject to such exceptions or (ii) to
terminate this Agreement. Buyer's delivery of the Inspection Letter shall
constitute Buyer's conclusive agreement to accept the Sacto Portfolio subject to
the Permitted Exceptions. "Permitted Exceptions" shall include and refer to (x)
any and all exceptions to title disclosed by the Title Reports or the Surveys,
excepting solely Title Objections timely identified by Buyer which Seller has
notified Buyer pursuant to this Section that Seller is willing to remove, and
(y) any other exceptions to title approved by or resulting from the acts,
omissions or status of Buyer. Anything contained herein to the contrary
notwithstanding and notwithstanding any approval or deemed approval given by
Buyer hereunder, except for real estate taxes not yet due or payable, Seller
shall cause all mortgages, deeds of trust and other monetary encumbrances,
including without limitation all mechanics' liens, to be released and reconveyed
from the Property on or prior to the Closing Date. Nothing contained in this
paragraph shall be understood to require Buyer to make any decision with respect
to the condition of title to any Property prior to the expiration of the
Inspection Period, nor to require Seller to respond to any notice from Buyer of
Title Objections.
Section 2.5 Inspection Letter. At any time on or prior to the close of the
Inspection Period and if and when Buyer has completed to its satisfaction the
inspection and review contemplated by Sections 2.3 and 2.4 hereof, Buyer shall
deliver to Seller an executed Inspection Letter in the form attached hereto as
Exhibit B. Buyer's delivery of the executed Inspection Letter shall (i) confirm
satisfaction of the conditions precedent described in Sections 3.1(a)(i) and 3.
1(a)(ii) below, (ii) represent the conclusive waiver by Buyer of any further
Inspection Period, (iii) constitute Buyer's conclusive agreement to accept the
Sacto Portfolio subject to any Permitted Exceptions and (iv) constitute Buyer's
conclusive agreement to accept or waive any matters disclosed to Buyer in
writing prior to the close of the Inspection Period.
Section 2.6 Adequate Consideration. Notwithstanding anything in this
Agreement to the contrary, to induce Buyer to enter into this Agreement and to
expend the time and resources necessary to evaluate the Sacto Portfolio and
possibly forego other opportunities while doing so, Seller hereby grants to
Buyer the rights to terminate this Agreement that are expressly provided in this
Agreement. Such expenditures of time and resources and possible loss of
opportunity by Buyer constitute adequate consideration for Seller's remaining
bound by this Agreement, notwithstanding such termination rights in Buyer.
ARTICLE III
CONDITIONS PRECEDENT
Section 3.1 Conditions.
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(a) Notwithstanding anything in this Agreement to the contrary, Buyer's
obligation to purchase the Sacto Portfolio shall be subject to and contingent
upon the satisfaction or waiver of the following conditions precedent:
(i) Buyer's inspection and approval, within the Inspection Period, of
all physical, environmental, economic and legal matters relating to the Sacto
Portfolio, pursuant to Sections 2.3 and 2.4 above;
(ii) Buyer's receipt and approval, within the Inspection Period, of
such tenant estoppel certificates and subordination agreements as Buyer and its
lender may deem necessary;
(iii) The willingness of Title Company to issue for each of the
Properties constituting the Sacto Portfolio, upon the sole condition of the
payment of its regularly scheduled premium, its American Land Title Association
extended coverage Owner's Policy of Title Insurance [1970 Form] (the "Title
Policy", or if separate policies are obtained for individual Properties, the
"Title Policies"), with such endorsements as may have been requested by Buyer
and agreed to by Title Company during the Inspection Period (collectively, the
"Endorsements"), with such Title Policy insuring Buyer in the amount of the
Purchase Price (or, in the case of individual policies, in the amount of the
portion of the Purchase Price allocated to the applicable Property), that fee
simple title to the Real Property is vested of record in Buyer on the Closing
Date subject only to the printed conditions and exceptions of such policy and
the Permitted Exceptions; and
(iv) Seller's performance or tender of performance of all material
obligations under this Agreement and the material truth and accuracy of Seller's
express representations and warranties as of the date of this Agreement, as
updated under the provision of Section 4.5 hereof.
(b) Notwithstanding anything in this Agreement to the contrary, Seller's
obligation to sell the Sacto Portfolio shall be subject to and contingent upon
the satisfaction or waiver of the following conditions precedent:
(i) Buyer's performance or tender of performance of all material
obligations under this Agreement and the material truth and accuracy of Buyer's
express representations and warranties as of the date of this Agreement and as
of the Closing Date; and
(ii) The satisfaction or Buyer's written waiver of the conditions set
forth in subparagraphs (a)(i), (ii), (iii) and (iv) above.
Section 3.2 Portfolio Acquisition. Except as expressly provided in Section
7.1 below, the satisfaction or Buyer's waiver of the conditions precedent to
Buyer's obligation to purchase the Sacto Portfolio shall be determined with
respect to the
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Sacto Portfolio as a whole, rather than with respect to any individual Property,
and Buyer shall not have the right to acquire less than all of the Properties.
Section 3.3 Failure or Waiver of Conditions Precedent. In the event any of
the conditions set forth in Section 3.1 are not fulfilled or waived, the party
benefited by such condition may, by written notice to the other party, terminate
this Agreement, whereupon all rights and obligations hereunder of each party
shall be at an end. Either party may, at its election, at any time or times on
or before the date specified for the satisfaction of the condition, waive in
writing the benefit of any of the conditions set forth in Section 3.1(a) and
3.1(b) above. Notwithstanding the foregoing, Buyer's failure to deliver to
Seller on or prior to the close of the Inspection Period an executed Inspection
Letter in the form attached as Exhibit B, without modification or qualification
in any manner whatsoever, shall be deemed a failure of the condition set forth
in Section 3.1(a)(i) above. In the event this Agreement is terminated as a
result of the failure of any condition set forth in Section 3.l(a), Seller shall
return the full amount of the Deposit to Buyer. In any event, Buyer's consent to
the close of escrow pursuant to this Agreement shall waive any remaining
unfulfilled conditions.
ARTICLE IV
COVENANTS, WARRANTIES AND REPRESENTATIONS
Section 4.1 Seller's Warranties and Representations. Seller hereby
makes the following representations and warranties to Buyer as of the date of
this Agreement; provided that each of such representations and warranties shall
be deemed to be modified by any contrary or qualifying information contained in
any reports, schedules or other informational materials delivered or made
available to Buyer on or before the date of this Agreement or set forth in the
Disclosure Statement:
(a) Seller has full power and lawful authority to enter into and
carry out the terms and provisions of this Agreement and to execute and deliver
all documents which are contemplated by this Agreement, and all actions of
Seller necessary to confer such power and authority upon the persons executing
this Agreement (and all documents which are contemplated by this Agreement) on
behalf of Seller have been taken;
(b) To Seller's knowledge, the Tenant Leases listed on the attached
Exhibit D constitute all of the leases and rental agreements presently in effect
with respect to the Real Property;
(c) To Seller's knowledge, the copies of the Tenant Leases which
Seller has delivered or made available to Buyer pursuant to this Agreement are
true, correct and complete in all material respects;
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(d) To Seller's knowledge, the Rent Roll, including the rent delinquency
report, is complete and accurate. To Seller's knowledge, Seller has not received
written notice (i) of any default by the tenant or Seller under any of the
Tenant Leases, or (ii) that any tenant intends to terminate its Tenant Lease
prior to the expiration of its scheduled term;
(e) To Seller's knowledge, Seller has received no written notice from any
governmental authority that any of the improvements located on the Real Property
are presently in violation of any applicable building codes, zoning or land use
laws, or other law, order, ordinance, rule or regulation affecting the Real
Property (collectively, "Applicable Laws");
(f) To Seller's knowledge, (i) the Contracts listed on the attached Exhibit
E constitute all of the service and equipment contracts affecting the Sacto
Portfolio which may be binding upon Buyer following the Closing Date, (ii) the
copies of all such Contracts which Seller has delivered or made available to
Buyer pursuant to this Agreement are true, correct and complete in all material
respects; and (iii) there exists no material default by Seller or any other
party to any Contract;
(g) To Seller's knowledge, there are no pending condemnation proceedings
against the Real Property, and Seller has received no written notice from any
governmental authorities that any such proceedings are threatened;
(h) To Seller's knowledge, there is no pending litigation, and Seller has
received no written notice of any threatened litigation, (i) affecting any of
the Sacto Portfolio (other than litigation arising in the ordinary course of the
operation of the Properties and fully covered by insurance, all of which
ordinary course and fully insured litigation, to Seller's knowledge, is set
forth on the Disclosure Statement) or (ii) against Seller which would materially
and adversely affect Seller's capacity to perform under this Agreement,
(i) Seller is not a "foreign person" within the meaning of Section
1445(f)(3)) of the Code; and
(j) To Seller's knowledge, there are no underground or other storage tanks
situated on the Real Property, and Seller has received no written notice of the
existence of any Hazardous Materials at the Real Property in violation of
Applicable Laws. For purposes of this Agreement, "Hazardous Materials" shall
mean inflammable explosives, radioactive materials, asbestos, polychlorinated
biphenyls, hazardous materials, hazardous wastes, hazardous or toxic substances,
oil, or related materials, which are listed in the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, the Resource
Conservation and Recovery Act, the Clean Water Act, the Clean Air Act, the Toxic
Substances Control Act, the Safe Drinking Water Act or California's
Xxxxxxxxx-Xxxxxxx-Xxxxxx Hazardous Substance Account Act,
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Hazardous Waste Control Law, Safe Drinking Water and Toxic Enforcement Act of
1986, or in the regulations adopted and publications promulgated pursuant
thereto, or in any other federal, state or local environmental law, ordinance,
rule or regulation.
As used herein, the term "Seller's knowledge" or words of similar effect shall
mean the current actual, subjective knowledge of Xx. Xxxxxxx Xxxxxxxx and Xx.
Xxxxx Xxxxxxxxx after inquiry of the property managers of each Property. Buyer
acknowledges, however, that such property managers may fail to respond or
respond inaccurately to such inquiry and that Seller shall bear no
responsibility based upon such non response or inaccurate response. Neither Xx.
Xxxxxxxx, Xx. Xxxxxxxxx nor any property manager or any party other than Seller
shall bear responsibility for any breach of representation. Seller, however,
represents and warrants that Xx. Xxxxxxxx and Xx. Xxxxxxxxx are the individuals
within Seller's investment advisory organization with principal administrative
and oversight responsibility, respectively, for the disposition of the Sacto
Portfolio and the asset management of the Sacto Portfolio.
Section 4.2 Seller's Covenants. Seller hereby covenants and agrees as
follows:
(a) during the Contract Period, Seller shall ensure that the Sacto
Portfolio is operated and maintained in a manner consistent with past practices
and maintain reasonable and customary levels and coverages of insurance and
Seller shall not create or acquiesce in the creation of liens or exceptions to
title other than the Permitted Exceptions or voluntarily take any action (other
than as may be permitted pursuant to subparagraph (b) of this Section 4.2) to
render any of the representations or warranties of Seller set forth in Section
4.1 materially incorrect; and
(b) during the Contract Period, Seller will not execute or modify any
Tenant Leases or Contracts, (i) without promptly notifying Buyer thereof and
providing Buyer with copies of the relevant contract documents, and (ii) as to
any Tenant Lease or Contract (or modification thereof) executed during the
period between the expiration of the Inspection Period and the Closing Date,
without Buyer's prior approval, which approval shall not be unreasonably
withheld and shall be deemed given if Buyer should fail to approve or disapprove
any such matter in writing within 5 days following Seller's request for such
action.
(c) Seller shall terminate on or before the Closing Date, at no cost or
expense to Buyer, any and all Contracts that are not approved by Buyer prior to
the expiration of the Inspection Period. In particular, Buyer will not retain
the existing management agents of Seller for the Sacto Portfolio, and,
accordingly, on the Closing Date, Seller shall (i) cause all management
agreements respecting the Sacto Portfolio to be terminated, and deliver evidence
of such termination to Buyer, and (ii) remove all management personnel from the
Real Property.
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Section 4.3 Buyer's Warranties and Representations. Buyer hereby represents
and warrants to Seller that (a) Buyer has and as of the Closing Date shall have,
full power and lawful authority to enter into and carry out the terms and
conditions of this Agreement and to execute and deliver all documents which are
contemplated by this Agreement, (b) all actions necessary to confer such power
and authority upon the persons executing this Agreement and all documents which
are contemplated by this Agreement to be executed on behalf of Buyer or its
assignee have been taken, and (c) Buyer has received no written notice of any
threatened or pending litigation which would materially and adversely affect
Buyer's capacity to perform under this Agreement.
Section 4.4 Limitations. The parties agree that (a) Seller's
indemnification obligations, warranties and representations contained in this
Agreement and in any document executed by Seller pursuant to this Agreement
shall survive Buyer's purchase of the Sacto Portfolio only for a period of 12
months after the Closing Date (the "Limitation Period"), (b) Seller shall be
liable solely for claims arising out of such representations and warranties if
such claims have reached an aggregate $20,000 (i.e., Seller shall be liable for
the first dollar of such claims if the aggregate reaches the $20,000 figure),
(c) Seller's aggregate liability for claims arising out of such representations
and warranties shall not exceed $400,000, and (d) Buyer shall provide actual
written notice to Seller of any breach of such warranties or representations and
shall allow Seller 30 days within which to cure such breach, or, if such breach
cannot reasonably be cured within 30 days, an additional reasonable time period,
so long as such cure has been commenced within such 30 days and thereafter is
diligently pursued to completion. If Seller fails to cure such breach after
actual written notice and within such cure period, Buyer's sole remedy shall be
an action at law for damages as a consequence thereof, which must be commenced,
if at all, within the Limitation Period; provided however, that if within the
Limitation Period Buyer gives Seller written notice of such a breach and Seller
refuses to cure or commences to cure and thereafter terminates such cure effort,
Buyer shall have an additional 30 days from the date Buyer receives written
notice from Seller of such refusal or termination within which to commence an
action at law for damages as a consequence of Seller's failure to cure, in which
case any representation or warranty that is expressly set forth in the notice
delivered pursuant to clause (c) immediately above and is material to such
litigation shall survive until all liabilities arising out of the alleged breach
have been finally determined. The Limitation Period referred to herein shall
apply to known as well as unknown breaches of such warranties or
representations. EXCEPT AS EXPRESSLY SET FORTH IN SECTION 4.1 OF THIS AGREEMENT,
BUYER ACKNOWLEDGES THAT BUYER IS ACQUIRING THE SACTO PORTFOLIO SOLELY IN
RELIANCE ON BUYER'S OWN INVESTIGATION AND "AS IS," "WHERE IS" AND WITH ALL
FAULTS AND DEFECTS, LATENT OR OTHERWISE. BUYER EXPRESSLY ACKNOWLEDGES THAT, IN
CONSIDERATION OF THE AGREEMENT OF SELLER TO PERFORM AS SET FORTH IN THIS
AGREEMENT, SELLER MAKES AND HAS MADE NO REPRESENTATIONS OR WARRANTIES, EXPRESS
OR IMPLIED, OR ARISING BY
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OPERATION OF LAW, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTY AS TO TITLE, LAND
USE CLASSIFICATION OR ENTITLEMENT, ENVIRONMENTAL OR OTHER CONDITION,
MERCHANTABILITY OF FITNESS FOR ANY PARTICULAR USE OR PURPOSE, WITH RESPECT TO
THE SACTO PORTFOLIO OR ANY MATTER RELATED THERETO, EXCEPT AS EXPRESSLY OTHERWISE
SET FORTH IN SECTION 4.1 HEREOF. IF BUYER OBTAINS ANY KNOWLEDGE, WHETHER
PURSUANT TO THE PROVISIONS OF THIS AGREEMENT OR OTHERWISE, PRIOR TO THE CLOSING
DATE, THAT REASONABLY INDICATES THAT ANY WARRANTY SET FORTH HEREIN HAS BEEN
BREACHED, ANY REPRESENTATION SET FORTH HEREIN IS NOT ACCURATE, OR THAT THERE ARE
ANY PHYSICAL, TITLE OR OTHER DEFECTS IN OR ADVERSE CONDITIONS RELATING TO ANY
PROPERTY, YET BUYER ELECTS TO CLOSE THE TRANSACTION CONTEMPLATED BY THIS
AGREEMENT WITH RESPECT TO SUCH PROPERTY (NOTWITHSTANDING SUCH KNOWLEDGE), SELLER
SHALL HAVE NO LIABILITY FOR ANY SUCH BREACH, INACCURACY, DEFECT OR ADVERSE
CONDITION, AND BUYER SHALL BE DEEMED TO HAVE WAIVED SUCH BREACH, INACCURACY,
DEFECT OR ADVERSE CONDITION.
Section 4.5 Seller's Certificate. Seller shall deliver to Buyer on the
Closing Date a certificate (the "Seller's Certificate") updating the
representations and warranties of Seller set forth in Section 4.1 through the
Closing Date; provided, however, that if Seller becomes aware during the
Contract Period of any matters which make any of such representations or
warranties untrue, Seller shall disclose such matters in the Seller's
Certificate. In the event the Seller's Certificate discloses any matters which
make any of Seller's representations or warranties untrue as of the date of such
Certificate in any respect or in the event that Buyer otherwise becomes aware
during the Contract Period of any matters which make any of Seller's
representations or warranties materially untrue in any material respect, Seller
shall bear no liability for such matters (provided that Seller has not breached
an express covenant set forth in this Agreement), but Buyer shall have the right
to elect in writing on or before the Closing Date, (a) to waive such matters and
complete the purchase of the Sacto Portfolio in accordance with the terms of
this Agreement, or (b) as to any matters disclosed or discovered following the
expiration of the Inspection Period, to terminate this Agreement. Buyer's
delivery of the Inspection Letter shall constitute Buyer's conclusive agreement
to accept or waive any such matters disclosed to Buyer in writing prior to the
close of the Inspection Period.
Section 4.6. Indemnifications. Subject to the foregoing limitations and the
provisions of Sections 6.3, 6.4 and 7.12:
(a) Seller shall indemnify and defend Buyer against and hold Buyer harmless
from any and all claims, liabilities, losses, damage, costs and expenses,
including, without limitation, all reasonable attorneys' fees, asserted against
or suffered
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by Buyer resulting from (i) any breach by Seller of this Agreement, (ii) the
untruth, inaccuracy or breach of any of the representations and warranties made
by Seller pursuant to this Agreement and (iii) any liability or obligation
arising in connection with the Sacto Portfolio accruing prior to the Closing
Date. The survival of Seller's obligations under this Section 4.6(a) shall be
governed by Section 4.4 above.
(b) Buyer shall indemnify and defend Seller against and hold Seller
harmless from any claim, loss, damage, or expense, including any reasonable
attorneys' fees, asserted against or suffered by Seller resulting from (i) any
breach by Buyer of this Agreement, (ii) the untruth, inaccuracy or breach of any
of the representations or warranties made by Buyer pursuant to this Agreement
and (iii) any liability or obligation arising in connection with the Sacto
Portfolio accruing following the Closing Date. Buyer's obligations under this
Section 4.6(b) shall survive the Closing Date for a period of twelve (12)
months, but not thereafter.
ARTICLE V
DEPOSIT
Upon execution of this Agreement, Buyer shall deliver to Escrow Company,
for deposit into the escrow described in Section 6.1 below, an amount equal to
$100,000 (the "Initial Deposit"). At the close of the Inspection Period, if
Buyer has not then elected to terminate this Agreement as provided herein, Buyer
shall deliver to Title Company, for deposit into the escrow described in Section
6.1 below, the additional sum of $100,000 (which amount, together with the
Initial Deposit and any interest that may accrue thereon in escrow, referred to
herein as the "Deposit"). In the event that this transaction is consummated as
contemplated by this Agreement, then the entire amount of the Deposit shall be
credited against the Purchase Price. The entire amount of the Deposit shall be
returned immediately to Buyer in the event of the failure of any of the
conditions precedent set forth in Section 3.l(a) above or in the event that (a)
the conditions precedent set forth in Section 3.l(b) shall have been satisfied
or waived, (b) Buyer shall have performed fully or tendered performance of its
obligations hereunder and (c) Seller shall be unable or fail to perform its
obligations under this Agreement. IN ALL OTHER EVENTS, THE ENTIRE AMOUNT OF THE
DEPOSIT SHALL BE RETAINED BY SELLER AS LIQUIDATED DAMAGES. BUYER AND SELLER
HEREBY ACKNOWLEDGE AND AGREE THAT SELLER'S DAMAGES IN THE EVENT OF SUCH A BREACH
OF THIS AGREEMENT BY BUYER WOULD BE DIFFICULT OR IMPOSSIBLE TO DETERMINE, THAT
THE AMOUNT OF THE DEPOSIT IS THE PARTIES' BEST AND MOST ACCURATE ESTIMATE OF THE
DAMAGES SELLER WOULD SUFFER IN THE EVENT THE TRANSACTION PROVIDED FOR IN THIS
AGREEMENT FAILS TO CLOSE, AND THAT SUCH ESTIMATE IS REASONABLE UNDER THE
CIRCUMSTANCES EXISTING ON THE DATE OF THIS AGREEMENT. BUYER AND SELLER AGREE
THAT SELLER'S
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RIGHT TO RETAIN THE DEPOSIT SHALL BE THE SOLE REMEDY OF SELLER AT LAW IN THE
EVENT OF A BREACH OF THIS AGREEMENT BY BUYER. THE FOREGOING SHALL NOT BE
UNDERSTOOD TO LIMIT BUYER'S OBLIGATIONS TO SELLER UNDER THE PROVISIONS OF
SECTION 2.3(c)(v) OF THIS AGREEMENT OR BUYER'S OBLIGATION TO REIMBURSE SELLER
FOR ATTORNEYS' FEES UNDER THE PROVISIONS OF SECTION 7.9 OF THIS AGREEMENT TO THE
EXTENT INCURRED TO SECURE THE RELEASE OF THE DEPOSIT TO SELLER.
ACCEPTED AND AGREED TO:
---------------------------------- ---------------------------------
Seller Buyer
ARTICLE VI
ESCROW AND CLOSING
Section 6.1 Escrow Arrangements. An escrow for the purchase and sale
contemplated by this Agreement has been opened by Buyer and Seller with Escrow
Company. At least one business day prior to the Closing Date, Seller and Buyer
shall each deliver escrow instructions to Escrow Company consistent with this
Article VI, and designating Escrow Company as the "Reporting Person" for the
transaction pursuant to Section 6045(e) of the Code. In addition, the parties
shall deposit in escrow, at least one business day prior to the Closing Date
(unless otherwise provided below in this Section 6.1) the funds and documents
described below:
(a) Seller shall deposit (or cause to be deposited):
(i) a duly executed and acknowledged grant deed pertaining to the Real
Property portion of each of the Properties constituting the Sacto Portfolio,
each in the form attached to this Agreement as Exhibit F (collectively, the
"Deeds");
(ii) a duly executed xxxx of sale pertaining to the Personal Property
portion of each of the Properties constituting the Sacto Portfolio, each in the
form attached to this Agreement as Exhibit G (collectively, the "Bills of
Sale");
(iii) a duly executed counterpart assignment and assumption pertaining
to the Intangible Property portion of each of the Properties constituting the
Sacto Portfolio, each in the form attached to this Agreement as Exhibit H
(collectively, the "Assignments and Assumption of Intangible Property");
(iv) the duly executed Seller's Certificate described in Section 4.1;
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(v) a certificate from Seller certifying the information required by
Section 18660 of the California Revenue and Taxation Code and the regulations
issued thereunder to establish that the transaction contemplated by this
Agreement is exempt from the tax withholding requirements of such provisions
(the "California Certificate"); and
(vi) a certificate from Seller certifying the information required by
Section 1445 of the Code to establish, for the purposes of avoiding Buyer's tax
withholding obligations, that Seller is not a "foreign person" as defined in
Section 1445(f)(3) of the Code (the "FIRPTA Certificate").
In addition, Seller shall deliver to Buyer on the Closing Date, outside of
escrow, to the extent in Seller's possession or control, the originals of all
Tenant Leases and tenant files and all keys to the Property.
(b) Buyer shall deposit:
(i) at or before 11:30 a.m. (Pacific Time) on the Closing Date,
immediately available funds sufficient to pay the balance of the Purchase Price,
plus sufficient additional cash to pay Buyer's share of all escrow costs and
closing expenses;
(ii) a duly executed counterpart for each of the Assignments and
Assumption of Intangible Property; and
(iii) a certificate duly executed by Buyer in favor of Seller
confirming the waivers and acknowledgments set forth in Sections 2.3(a) and (b)
above.
Section 6.2 Closing. Escrow Company shall close escrow on the Closing Date
by:
(a) recording the Deeds;
(b) causing Title Company to issue the Title Policies to Buyer;
(c) delivering to Buyer the Bills of Sale, the Seller's Certificate, the
FIRPTA Certificate, the California Certificate, and a counterpart for each of
the Assignments and Assumption of Intangible Property executed by Seller; and
(d) delivering to Seller (i) a counterpart for each of the Assignments and
Assumption of Intangible Property executed by Buyer, (ii) the certificate
described in Section 6.l(b)(iii) above, and (iii) funds in the amount of the
Purchase Price, as adjusted for credits, prorations and closing costs in
accordance with this Article VI.
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Section 6.3 Prorations.
(a) Real estate taxes and assessments, personal property taxes, if any,
rental income and all other items of income and expense with respect to the
Sacto Portfolio shall be prorated between Seller and Buyer as of the Closing
Date. Income and expenses shall be prorated on the basis of a 30-day month and
on a cash basis (except for items of income and expense that are payable less
frequently than monthly, which shall be prorated on an accrual basis). All such
items attributable to the period prior to the Closing Date shall be credited to
Seller; all such items attributable to the period on and following the Closing
Date shall be credited to Buyer. Buyer shall be credited in escrow with (a) any
portion of rental agreement or lease deposits in Seller's possession with
respect to the Sacto Portfolio which are refundable to the tenants and (b) rent
prepaid beyond the Closing Date. Buyer shall not be entitled to any interest on
rental agreement or lease deposits or prepaid rent accrued on or before the
Closing Date, except to the extent any such amount of interest is refundable or
payable to any tenant under a Lease. Seller shall be credited in escrow with any
refundable deposits or bonds held by any utility, governmental agency or service
contractor with respect to the Sacto Portfolio, to the extent such deposits or
bonds are assigned to and accepted by Buyer on the Closing Date. In addition,
Seller shall be credited in escrow with any leasing commissions, free rental
periods or tenant improvement or other allowances paid or endured by Seller
during the portion of the Contract Period after the expiration of the Inspection
Period to the extent such relate to Tenant Leases executed after the expiration
of the Inspection Period and are equitably allocable to that portion of the
stabilized term (i.e. the term following the tenant's entry into occupancy and
commencement of unabated rental obligations) of any such Tenant Lease of the
Sacto Portfolio following the Closing Date. To the extent approved by Buyer or
applicable under any Tenant Lease with respect to any extension term or
expansion of premises that is exercised after the expiration of the Inspection
Period, Buyer shall assume all obligations for any such leasing commissions,
free rental periods or tenant improvement or other allowances payable following
the Closing Date. Buyer shall be credited in escrow with any leasing
commissions, free rental periods or tenant improvements or other allowances to
be paid or endured by Buyer on or after the Closing Date with respect to the
current term of any Tenant Lease executed, or any extension term or expansion of
premises exercised, in each case, prior to the expiration of the Inspection
Period, and Seller shall pay on or before the Closing Date all such items
payable prior to the Closing Date.
(b) Buyer and Seller shall cooperate to produce prior to the Closing Date a
schedule of prorations to be made on and after the Closing Date as complete and
accurate as reasonably possible. With respect to taxes or other expenses payable
or reimbursable by the tenants of the Sacto Portfolio, the amounts prorated
between Buyer and Seller shall be the net amounts (if any) not subject to
payment or reimbursement by or to the tenants. All prorations which can be
liquidated accurately or reasonably estimated as of the Closing Date shall be
made in escrow on the Closing Date. All other
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prorations, and adjustments to initial estimated prorations, shall be made by
the parties with due diligence and cooperation within 30 days following the
Closing Date, or such later time as may be required to obtain necessary
information for proration, by immediate cash payment to the party yielding a net
credit from such prorations from the other party.
(c) Buyer shall, consistent with reasonable business judgment, exert its
best efforts to collect for Seller following the Closing Date all rental income
which is delinquent on the Closing Date; provided, however, that Buyer shall not
be required to commence legal proceedings to collect such rents. Notwithstanding
the foregoing proviso, Seller reserves the right to pursue any remedy Seller may
have against any tenant with respect to such delinquent rents; provided,
however, that Buyer shall not incur any cost, expense or liability in connection
therewith, and provided further that Seller shall not commence any legal or
equitable proceedings in the nature of an unlawful detainer, eviction or other
proceeding which would have the effect of interfering with any tenant's quiet
enjoyment of its leased premises or result in a lien or encumbrance on such
leased premises. Any sums collected on account of rents after the Closing Date
shall be successively applied to the payment of (i) rent due and payable in the
months succeeding the month in which the closing occurs, (ii) rent due and
payable in the month in which the closing occurs, and (iii) rent due and payable
in the months preceding the month in which the closing occurs.
Section 6.4 Other Closing Costs.
(a) Buyer shall pay (i) any sales or use taxes determined to be payable in
connection with this transaction, (ii) all fees and expenses of Buyer's legal
counsel and other third party consultants engaged by or on behalf of Buyer in
connection with this transaction, (iii) any excess portion of the premium for
any Title Policy beyond that which would have been required had the Title Policy
been a CLTA standard coverage policy of title insurance without any
endorsements, (iv) 50% of any Sacramento city documentary transfer tax and (v)
50% of any escrow charges or other fees or costs charged by or reimbursable to
Escrow Company or Title Company and recording fees.
(b) Seller shall pay (i) all fees and expenses of Seller's legal counsel
and other third party consultants engaged by or on behalf of Seller in
connection with this transaction, (ii) any Sacramento County documentary
transfer tax, (iii) 50% of any Sacramento city documentary transfer tax, (iii)
50% of any escrow charges or other fees or costs charged by or reimbursable to
Escrow Company or Title Company and recording fees, (iv) the premium for any
Title Policy that would have been charged had such Title Policy been a CLTA
standard coverage owners' policy of title insurance without any endorsements and
(v) any prepayment fee or other charge in connection with the payoff of any
monetary encumbrance.
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(c) Any costs and expenses of closing that are not expressly identified in
subparagraph (a) or (b) above shall be allocated between the parties in
accordance with prevailing custom in the county in which the Property to which
the costs and expenses are attributable is located, or if such costs and
expenses are not attributable to any particular Property, then such costs or
expenses shall be allocated equally between Buyer and Seller.
Section 6.5 Further Documentation. Promptly after the close of escrow,
Buyer and Seller shall deliver to each tenant of the Real Property written
notice advising the tenant of the sale of the Real Property by Seller to Buyer,
and otherwise complying with the provisions of California Civil Code
Section1950.7(d)(1). Each such notice shall be delivered in the manner set forth
in such Section of the Civil Code. At or following the close of escrow, Buyer
and Seller each shall execute any certificate or other instruments required by
law or local custom or otherwise reasonably requested by the other party to
effect the transaction contemplated by this Agreement.
ARTICLE VII
MISCELLANEOUS
Section 7.1 Cooperation in Exchange. Buyer acknowledges and agrees that
Seller may assign its interest in this Agreement to an exchange facilitator for
the purpose of completing an exchange of the Real Property in a transaction
which will qualify for treatment as a tax deferred exchange pursuant to the
provisions of Section 1031 of the Internal Revenue Code of 1986 and applicable
state revenue and taxation code sections (a "1031 Exchange"). Buyer agrees to
cooperate with the Seller in implementing any such assignment and 1031 Exchange
provided that such cooperation shall not entail any additional expense to Buyer
or cause Buyer any liability whatsoever beyond its existing obligations under
this Agreement. No such assignment by Seller shall relieve it from any of its
obligations hereunder, nor shall Seller's ability to consummate a tax deferred
exchange be a condition to the performance of Seller's obligations under this
Agreement.
Section 7.2 Damage or Destruction.
(a) Buyer shall be bound to purchase each of the Properties within the
Sacto Portfolio for the Purchase Price as required by the terms of this
Agreement without regard to the occurrence or effect of any damage to or
destruction of any of the Properties or condemnation of any Property by right of
eminent domain, provided that the occurrence of any damage or destruction
involves repair costs of $250,000 or less, and any condemnation does not affect
a material portion for each affected Property. If Buyer is so bound to purchase
a Property notwithstanding the occurrence of damage, destruction or
condemnation, then upon the close of escrow: (A) in the event of damage covered
by insurance or an immaterial condemnation, Buyer shall receive a credit against
the
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Purchase Price in the amount (net of collection costs and costs of repair
reasonably incurred by Seller and not then reimbursed) of any insurance proceeds
or condemnation award collected and retained by Seller as a result of any such
damage or destruction or condemnation plus (in the case of damage) the amount of
the deductible portion of Seller's insurance policy, and Seller shall assign to
Buyer all rights to such net insurance proceeds or condemnation awards as shall
not have been collected prior to the close of escrow; and (B) in the event of
damage not covered by insurance, Buyer shall receive a credit (not to exceed
$250,000 for each affected Property) in the amount of the estimated cost to
repair the damage.
(b) In the event that any Property suffers damage or destruction
or condemnation prior to the Closing Date that involves repair costs in excess
of $250,000 or, in the case of condemnation, a material portion of the affected
Property, then either Buyer or Seller may elect to terminate this Agreement by
giving written notice of such election to the other party promptly following
the event of damage or destruction.
Section 7.3 Brokerage-Commissions and Finder's Fees.
(a) Each party to this Agreement warrants to the other that, except as
otherwise provided in subparagraph (b) below, no person or entity can properly
claim a right to a real estate commission, real estate finder's fee, real estate
acquisition fee or other real estate brokerage-type compensation (collectively,
"Real Estate Compensation") based upon the acts of that party with respect to
the transaction contemplated by this Agreement. Each party hereby agrees to
indemnify and defend the other against and to hold the other harmless from any
and all loss, cost, liability or expense (including but not limited to
attorneys' fees and returned commissions) resulting from any claim for Real
Estate Compensation by any person or entity based upon such acts.
(b) The parties hereby acknowledge that CB Commercial ("Broker") has acted
as a broker in connection with this transaction. Seller shall be responsible for
paying any commission due to Broker in connection with this transaction pursuant
to their separate written agreement.
Section 7.4 Successors and Assigns. Buyer may not assign any of Buyer's
rights or duties hereunder without the prior written consent of Seller. No
assignment by Buyer shall relieve Buyer of its obligations under this Agreement.
Subject to the limitations on assignment expressed in this Section 7.3, this
Agreement shall be binding upon, and inure to the benefit of, Buyer and Seller
and their respective successors and assigns.
Section 7.5 Notices. All notices or other communications required or
provided to be sent by either party shall be in writing and shall be sent by
United States Postal Service, postage prepaid, registered or certified mail,
return receipt requested, by
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any nationally known overnight delivery service, by courier, in person or by
telecopy, with an electronic confirmation of receipt. All notices shall be
deemed to have been given forty-eight (48) hours following deposit in the United
States Postal Service or upon personal delivery if sent by overnight delivery
service, telecopy, courier or personally delivered; provided, however, that any
notice or other communication delivered other than during normal business hours
shall be deemed delivered on the next following business day. All notices shall
be addressed to the party at the address or telecopier number below:
To Seller:
c/o AEW Capital Management, L.P.
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: General Counsel
Telecopy No.: (000) 000-0000
Telephone No.: (000) 000-0000
with a copy to: Xx. Xxxxxxx Xxxxxxxx
AEW Capital Management, L.P.
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telecopy No.: (000) 000-0000
Telephone No.: (000) 000-0000
with a copy to: Xxxxxx Xxxxxx White & XxXxxxxxx
000 Xxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx Xxxxx, Esq.
Telecopy No.: (000) 000-0000
Telephone No.: (000) 000-0000
To Buyer: Pacific Gulf Properties Inc.
0000 Xxx Xxxxxx, 0xx Xxxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attn: Xx. Xxxxxx X. Xxxxx
Telecopy No.: (000) 000-0000
Telephone No.: (000) 000-0000
with a copy to: Xxxx X. Xxxx, Esq.
Xxx, Castle & Xxxxxxxxx LLP
0000 Xxxxxxx Xxxx Xxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telecopy No.: (000) 000-0000
Telephone No.: (000) 000-0000
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Any address, telecopy number or name specified above may be changed by notice
given to the addressee by the other party in accordance with this Section 7.4.
The inability to deliver because of a changed address or telecopy number of
which no notice was given, or rejection or other refusal to accept any notice,
shall be deemed to be the receipt of the notice as of the date of such inability
to deliver or rejection or refusal to accept. Any notice to be given by any
party hereto may be given by the counsel for such party.
Section 7.6 Time. Time is of the essence of every provision contained in
this Agreement.
Section 7.7 Possession. The rights of possession of the Real Property
(subject to the Tenant Leases and the Permitted Exceptions) shall be delivered
by Seller to Buyer on the Closing Date.
Section 7.8 Incorporation by Reference. All of the exhibits attached to
this Agreement or referred to herein and all documents in the nature of such
exhibits, when executed, are by this reference incorporated in and made a part
of this Agreement.
Section 7.9 No Deductions or Off-Sets. Buyer acknowledges that the Purchase
Price to be paid for the Sacto Portfolio pursuant to this Agreement is a net
amount and shall not be subject to any off-sets or deductions.
Section 7.10 Attorneys' Fees. In the event any dispute between Buyer and
Seller should result in litigation, the prevailing party shall be reimbursed for
all reasonable costs incurred in connection with such litigation, including,
without limitation, reasonable attorneys' fees, court costs and fees of experts.
Section 7.11 Construction. The parties acknowledge that each party and its
counsel have reviewed and revised this Agreement and that the normal rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Agreement or
any amendments or exhibits hereto.
Section 7.12 Governing Law. This Agreement shall be construed and
interpreted in accordance with and shall be governed and enforced in all
respects according to the laws of the State of California.
Section 7.13 Damages. Buyer agrees that any liability of Seller under any
claim brought prior to the Closing Date pursuant to this Agreement or any
document or instrument delivered simultaneously or in connection with, or
pursuant to this Agreement, shall be limited solely to its interest in the Sacto
Portfolio, and no other assets of Seller shall be subject to levy or execution.
With respect to any such claim brought following the Closing Date, any liability
of Seller shall be limited solely to the assets of Seller. In
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no event shall Buyer seek satisfaction for any such obligation from any of
Seller's trustees, beneficiaries, shareholders, officers, directors, employees,
agents, legal representatives or successors or assigns (or from any of their
trustees, beneficiaries, shareholders, officers, directors, employees, agents,
legal representatives, successors or assigns), nor shall any such person or
entity have any personal liability for any such obligations of Seller.
Section 7.14 Confidentiality. The parties hereby acknowledge and agree
that, prior to the Closing Date, the existence of this Agreement, the terms and
conditions set forth herein, and any materials delivered in connection with this
transaction are to be kept strictly confidential. Accordingly, except (a) for
the Title and Escrow Companies, (b) in connection with the enforcement of any
rights hereunder, (c) for the delivery and recordation of instruments, notices
or other documents to implement this Agreement, and (d) as may in good faith be
believed to be required by law or court order, neither party shall, without the
prior written consent of the other, release, publish or otherwise distribute
(and shall not authorize or permit any other person or entity to release,
publish or otherwise distribute) any information concerning this Agreement or
the transaction contemplated herein, or any materials so delivered, to any
person or entity other than Buyer's prospective lenders, such party's legal,
accounting and financial advisors, Seller's property managers and Buyer's due
diligence consultants, each of whom shall agree to hold such information or
materials strictly confidential as if such persons were bound by the provisions
of this Section 7.13. Following the Closing Date, either party may make
reasonable and customary announcements and press releases regarding the
transaction.
Section 7.15 Counterparts. This Agreement may be executed in one or more
counterparts. All counterparts so executed shall constitute one contract,
binding on all parties, even though all parties are not signatory to the same
counterpart.
Section 7.16 Entire Agreement. This Agreement and the attached exhibits,
which are by this reference incorporated herein, and all documents in the nature
of such
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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exhibits, when executed, contain the entire understanding of the parties and
supersede any and all other written or oral understanding.
IN WITNESS WHEREOF, Seller and Buyer have executed this Agreement as of the
day and year first written above.
SELLER:
XXXXXX SACRAMENTO ASSOCIATES, a California general partnership
By: METROPOLITAN LIFE INSURANCE COMPANY, a New York corporation
(successor by merger to New England Mutual Life Insurance
Company, a Massachusetts corporation), on behalf of its
Developmental Properties Account ("DPA"), Managing Partner
By: AEW Real Estate Advisors, Inc., a Massachusetts corporation
(formerly known as Xxxxxx Real Estate Advisors, Inc.), its asset
manager and advisor hereunto duly authorized
By:
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Name:
Title:
BUYER:
Pacific Gulf Properties Inc., a Maryland corporation
By:
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Name:
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Its:
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By:
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Name:
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Its:
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EXHIBIT A
DISCLOSURE STATEMENT
Any additions to the attached form of Disclosure
Statement to be provided by 5:00 P.M. Los Angeles
time on November 26, 1997.
27
EXHIBIT A
DISCLOSURE STATEMENT
All capitalized terms used herein but not otherwise defined shall have the
meanings given them in the Agreement.
1. Matters disclosed by the environmental reports and audits and the
structural reports and other physical inspection reports delivered to Buyer
prior to the end of the Inspection Period or included in the materials
delivered to or made available to Buyer pursuant to Section 2.3 of the
Agreement.
2. The applicable Personal Property and the improvements, located on the Real
Property, and their structural components, the building systems and other
mechanical systems, and the parking and loading areas are, and have been,
subject to normal wear and tear and obsolescence as the result of the age
of such items.
3. All the matters set forth on this Disclosure Statement are limited to
Seller's Knowledge. Seller does not make any representations or warranties,
other than as expressly set forth in Section 4.1 of the Agreement,
regarding the scope or content of the matters referenced in this Disclosure
Statement. Neither the foregoing list nor the materials referred to therein
are intended to be an exhaustive enumeration of issues relevant to the
Sacto Portfolio, nor are they intended to fully inform you of any
particular issue or its ramifications. Rather this Disclosure Statement is
presented to you pursuant to Section 4.1 of the Agreement and is merely
intended to assist you with your investigation of the Sacto Portfolio by
flagging for you those matters which, to Seller's Knowledge, may affect the
Sacto Portfolio or Seller's warranties and representations set forth in
Section 4.1 of the Agreement.
28
EXHIBIT B
INSPECTION LETTER
_________, 1997
Xxxxxx Sacramento Associates
x/x XXX Xxxxxxx Xxxxxxxxxx, X.X.
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: General Counsel
Re: Agreement for Purchase and Sale of the Sacramento Properties,
dated November _, 1997 (the "Purchase Agreement") between Xxxxxx
Sacramento Associates ("Seller") and Pacific Gulf Properties Inc.
("Buyer")
Gentlemen & Ladies:
This letter constitutes the Inspection Letter contemplated by the
above-referenced Purchase Agreement and is delivered to confirm the satisfaction
of the conditions precedent described in Sections 3.1(a)(i) and 3.1(a)(ii) of
the Purchase Agreement.
Buyer hereby expressly confirms to Seller (and to its officers,
directors, shareholders, trustees and beneficiaries and their respective
agents, employees, successors and assigns) that Buyer has completed to its
satisfaction the inspection and review contemplated by Sections 2.3 and 2.4 of
the Purchase Agreement. Buyer, moreover, hereby ratifies and affirms all of the
acknowledgments, waivers and releases set forth in Section 2.3.
Accordingly, based on its inspection and review of the Sacto
Portfolio, Buyer is prepared to proceed with the purchase of the Sacto Portfolio
in accordance with the terms of the Purchase Agreement subject only to the
satisfaction of the conditions described in Sections 3.1(a)(iii) and 3.1(a)(iv)
of the Purchase Agreement.
Very truly yours,
Pacific Gulf Properties Inc.
By:
-------------------------------
Its
----------------------------
29
EXHIBIT C
LEGAL DESCRIPTION OF LAND
PARCEL ONE:
All that portion of Parcel "C" as shown on the parcel map entitled "Folsom
Industrial Park being a portion of Rancho Rio de los Americanos in projected
Township 8 North, Range 6 East, M.D.M.", recorded in the office of the County
Recorder of Sacramento County on April 29, 1976 in Book 26 of Parcel Maps, at
Page 3, described as follows:
COMMENCING at the Southeasterly corner of said Parcel "C", thence South 57
degrees 34'12" West along the Southerly line of said Parcel "C" 1.05 feet;
thence South 58 degrees 43'14" West 298.95 feet to the point of beginning,
thence South 58 degrees 43'14" West continuing along the Southerly line of said
Parcel "C" 199.12 feet; thence South 57 degrees 34'12" West 100.88 feet; thence
North 32 degrees 25'48" West 315.00 feet; thence North 57 degrees 34'13" East
187.77 feet; thence along the arc of a curve to the left, with a radius of
530.00 feet and a central angle of 12 degrees 13'14" the chord of which bears
North 51 degrees 27'34" East 112.83 feet; thence South 32 degrees 25'48" East
331.01 feet to the point of beginning, and being the same as Parcel 11,
described in that certain "Certificate of Compliance", recorded in Book
77-09-08, Page 1302 of Official Records.
Assessor's Parcel Number: 068-0160-058-0000
PARCEL TWO:
Parcels 14 thru 19, as shown on the Parcel Map entitled "All that portion of
Parcel C as shown on the Parcel Map entitled Folsom Industrial Park, filed in
Book 26 of Parcel Maps, Page 3", recorded in Book 52 of Parcel Maps, at page 15,
records of said County.
EXCEPTING FROM the above described Parcels 1, 2, 3 and 4, one-half of all
mineral rights in and to the herein described land, as reserved in deed from the
Federal Land Bank of Berkeley to Xxxxxx X. Xxxxxxxxx, et ux, recorded January
10, 1941 in Book 862, Page 202 of Official Records. By Quitclaim Deed recorded
March 7, 1969, in Book 6903-07, Page 746 of Official Records, The Federal Land
Bank of Berkeley, a corporation, quitclaimed their interest "in, upon and to a
depth of 500 feet below the surface" of the herein described land.
Portion of Assessor's Parcel Number: 068-0530-020-0000
30
PARCEL THREE:
All that real property situated in the County of Sacramento, State of California
and being all of Parcel 3 as said Parcel is described in that certain Grant Deed
to the County of Sacramento, a political subdivision of the State of California,
recorded in Book 6611-21, Official Records, Pages 146 and 147, more particularly
described as follows:
All that portion of the subdivision designated "Wm. Xxxxxx No. 2, 156.56 A: of
Rancho Rio De Los Americanos, the official plat of which is recorded in the
office of the Recorder of Sacramento County in Book 1 of Maps, Map No. 2,
described as follows:
BEGINNING at a point located on the Northerly boundary of Xxxxx Vineyards, the
official plat of which is recorded in said Recorder's Office in Book 19 of Maps,
Map No. 29, from which the Northwest corner thereof bears North 89 degree 52'43"
West 29.98 feet, thence from said point of beginning, Northerly curving to the
right of an arc of 136.00 feet radius, said arc being subtended by a chord
bearing North 03 degrees 34'21" West 16.37 feet; thence North 89 degrees 52'48"
East 8.00 feet; thence North 00 degrees 07'12" West 1296.25 feet; thence North
00 degrees 12'10" East 496.03 feet; thence curving to the left on an arc of
85.93 feet radius, said arc being subtended by a chord bearing North 16 degrees
21'02" West 48.96 feet; thence North 32 degrees 54'15" West 40.05 feet to a
point located on the Southeasterly right of way line of the Southern Pacific
Railroad Company; thence along said right of way line South 57 degrees 11'57"
West 1.43 feet to the Northwesterly corner of that certain Parcel No. I
described in Deed to Xxxxxx and Donant, a partnership, recorded in said
Recorder's Office on August 9, 1956, in Book 3135, Page 90; thence along the
Westerly line of said parcel South 00 degrees 12'10" West 575.78 feet and South
00 degrees 07'12" East 1312.56 feet to the said Northwest corner of said Xxxxx
Vineyards; thence North 89 degrees 52'43" East 29.98 feet along the said
Northerly boundary of Xxxxx Vineyards to the point of beginning.
EXCEPTING THEREFROM all that portion of said Parcel 3 described hereinabove
lying North of the Easterly prolongation of the South line of Parcel 20 as said
Parcel is shown and so designated on that certain Parcel Map entitled "All that
portion of Parcel "C" as shown on Parcel Map entitled 'Folsom Industrial Park'
filed in Book 26 of Parcel Maps, Page 3 and being a portion of Rancho Rio De Los
Americanos 1 BM 2", filed in said Recorder's Office in Book 52 of Parcel Maps,
Page 15.
ALSO EXCEPTING THEREFROM all that portion of said Parcel 3 described hereinabove
lying South of the Easterly prolongation of the South line of Parcel 14 as said
Parcel is shown and so designated on said Parcel Map.
Balance of Assessor's Parcel Number: 068-0530-020-0000
-2-
31
EXHIBIT D
TENANT LIST
TENANT ADDRESS SUITE SQUARE FEET
------ ------- ----- -----------
1. Imbsen & Associates 0000 Xxxxxxxx Xxxx Xx. 130/2 11,566
2. Imbsen & Associates 9912 Business Park Dr. 145 3,232
3. Mercy Home Health 0000 Xxxxxxxx Xxxx Xx. 170/1 11,540
4. Product Development Corp. 0000 Xxxxxxxx Xxxx Xx. 180/1 1,920
5. Guerrilla Graphics 0000 Xxxxxxxx Xxxx Xx. 185/2 1,920
6. Landgraf, Gierke, et al 9912 Business Park Dr. 195/1 2,560
7. Xxxxxx Xxxxxxx 0000 Xxxxxxxx Xxxx Xx. 125/3 2,241
8. Xxxxx & Xxxxx, Inc. 0000 Xxxxxxxx Xxxx Xx. 140/2 1,560
9. Integrated Electronics 0000 Xxxxxxxx Xxxx Xx. 145/1 1,560
10. Monroe Systems for Bus 0000 Xxxxxxxx Xxxx Xx. 150/3 1,496
11. Innovative Imaging 0000 Xxxxxxxx Xxxx Xx. 155/1 1,496
12. Mercy Hospice 0000 Xxxxxxxx Xxxx Xx. 165/2 6,420
13. Xxxxxxx Chesaum 9940 Business Park Dr. 185/2 1,440
14. Assured Processing 0000 Xxxxxxxx Xxxx Xx. 100 3,378
15. Xxxxxxxxx Security 0000 Xxxxxxxx Xxxx Xx. 110/2 1,800
16. Marketing Works 0000 Xxxxxxxx Xxxx Xx. 120/1 2,400
17. Xxxxxx Xxxxx & Associates 0000 Xxxxxxxx Xxxx Xx. 140/1 1,643
18. Master Computer Systems 0000 Xxxxxxxx Xxxx Xx. 150/1 3,120
32
EXHIBIT E
VENDORS
WHO BLDG ADDRESS SERVICE DATE OF
AGREEMENT
Pestnet 9912, 9940, 9960 Business Park Dr. Pest Control 6/26/96
(sold to Terminex)
Progressive Bldg Maintenance 9912, 9940, 9960 Business Park Dr. Window Cleaning 2/6/97
Sares-Regis 9912, 9940, 9960 Business Park Dr. Property Manager 1/16/96
Xxxxxxx Landscape 9912, 9940, 9960 Business Park Dr. Landscape Service No contract
Sac-Val 9912, 9940, 9960 Business Park Dr. Trash Removal No contract
Xxxxxxxxx Security 9912, 9940, 9960 Business Park Dr. Security Patrol No contract
Sacramento Control System 9912, 9940, 9960 Business Park Dr. Fire/Life Monitoring No contract
Capitol Sweep Service 9912, 9940, 9960 Business Park Dr. Puking Lot Sweep No contract
Universal Building 9912, 9940, 9960 Business Park Dr. Janitorial No contract
Maintenance
Indoor Environmental 9912, 9940, 9960 Business Park Dr. HVAC No contract
Services
Xxxxxx Roofing 9912, 9940, 0000 Xxxxxxxx Xxxx Xx Roof Repairs No contract
Diversified Plumbing 9912, 9940, 9960 Business Park Dr. Plumbing Repairs No contract
Xxxx Xxxxxxx Painting 9912, 9940, 9960 Business Park Dr. Painting No contract
Xxxxx Sales 9912, 9940, 9960 Business Park Dr. Flooring Contractor No contract
Xxxxxxx House of Signs 9912, 9940, 9960 Business Park Dr. Signage No contract
Pride Industries 9912, 9940, 9960 Business Park Dr. Dayporter No contract
Reliable Glass 9912, 9940, 9960 Business Park Dr. Glass No contract
Delta Lighting Services 9912, 9940, 9960 Business Park Dr. Electrical No contract
Xxxxxxxx Space Planning 9912, 9940, 0000 Xxxxxxxx Xxxx Xx. Space Planner No contract
Van's Chem Dry 9912, 9940, 9960 Business Park Dr. Carpet Cleaning No contract
33
EXHIBIT F
FORM OF GRANT DEED
Assessor's Parcel No.
RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:
MAIL TAX STATEMENTS TO:
--------------------------------------------------------------------------------
FORM OF GRANT DEED
In accordance with Section 11932 of the California Revenue and Taxation Code,
the grantor has declared the amount of transfer tax which is due and payable by
a separate statement which is not being recorded with this Grant Deed.
FOR VALUABLE CONSIDERATION, the receipt and sufficiency of which are hereby
acknowledged, Xxxxxx Sacramento Associates, a ________________________, HEREBY
GRANTS to Pacific Gulf Properties Inc., a Maryland corporation, all that real
property in the City of ____________________________________________, County
of ________________, State of California, described as follows:
This conveyance is made subject to all liens and encumbrances of record.
Date:________,1997 GRANTOR:
Xxxxxx Sacramento Associates, a
________
By:
MAIL TAX STATEMENTS AS DIRECTED ABOVE
STATE OF CALIFORNIA )
) ss.
COUNTY OF )
34
On_______________________ before me, __________________________________________
(here insert name and title of the notary public), personally appeared ________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
WITNESS my hand and official seal.
Signature ___________________________________ (SEAL)
-2-
35
EXHIBIT G
FORM OF XXXX OF SALE
THIS XXXX OF SALE (this "Xxxx of Sale") is made this _________
day of ________________________________, 1997 by Xxxxxx Sacramento Associates
("Seller") in favor of Pacific Gulf Properties Inc. ("Buyer").
Seller and Buyer entered into that certain Agreement for Purchase
and Sale dated as of November _, 1997 (the "Agreement") respecting the sale of
certain real property, described on Exhibit C attached to the Agreement (the
"Real Property").
Under the Agreement, Seller is obligated to transfer to Buyer any
and all of its right, title and interest in and to any and all equipment,
appliances, tools, machinery, supplies, building materials and other personal
property of every kind and character owned by Seller and attached to,
appurtenant to, located in or used in connection with the operation of the
improvements ("Improvements") located on the Real Property (the "Personal
Property").
NOW, THEREFORE, for good and valuable consideration, the receipt of
which are hereby acknowledged, Seller does hereby absolutely and unconditionally
give, grant, bargain, sell, transfer, set over, assign, convey, release, confirm
and deliver to Buyer all of the Seller's right, title and interest in and to the
Personal Property, WITHOUT WARRANTY, EXPRESS OR IMPLIED, except for the
covenants, representations and warranties of the Seller with respect to the
Personal Property as set forth in the applicable provisions of the Agreement,
all of which are hereby deemed to be incorporated by reference the same as those
set forth in full herein.
Seller hereby covenants that Seller will, at any time and from time
to time upon written request therefor, execute and deliver to Buyer, Buyer's
successors, nominees or assigns, such documents as Buyer or they may reasonably
request in order to fully assign and transfer to and vest in Buyer or Buyer's
successors, nominees and assigns, and protect Buyer's or their right, title and
interest in and to all of the Personal Property and rights of Seller intended to
be transferred and assigned hereby, or to enable Buyer, Buyer's successors,
nominees and assigns to realize upon or otherwise enjoy such rights and
property.
All defined terms used herein shall have the same meaning as set
forth in the Agreement, and are hereby incorporated herein by reference.
This Xxxx of Sale shall be binding upon and inure to the benefit of
the successors, assigns, personal representatives, heirs and legatees of Buyer
and Seller,
36
This Xxxx of Sale shall be governed by, interpreted under, and
construed and enforceable in accordance with, the laws of the State of
California.
This Xxxx of Sale is intended to supplement the terms and
provisions of the Agreement and shall be construed as consistent therewith to
the greatest extent possible. This Xxxx of Sale shall not be deemed to modify or
amend the Agreement. In the event of an irreconcilable conflict between the
provisions of the Agreement and this Xxxx of Sale, the provisions of the
Agreement shall prevail.
IN WITNESS WHEREOF, Seller has executed this Xxxx of Sale as of
the date first set forth above.
SELLER:
Xxxxxx Sacramento Associates
By
---------------------------------------------
Its
--------------------------------------------
-2-
37
EXHIBIT H
FORM OF ASSIGNMENT AND ASSUMPTION OF INTANGIBLE PROPERTY
THIS ASSIGNMENT AND ASSUMPTION OF INTANGIBLE PROPERTY (this
"Assignment") is made this day of , 1997 by and between Xxxxxx
Sacramento Associates ("Assignor") and Pacific Gulf Properties Inc.
("Assignee").
Assignor and Assignee entered into that certain Agreement for
Purchase and Sale dated as of November , 1997 ("Agreement") respecting the sale
of certain real property described in Exhibit "C" attached to the Agreement (the
"Real Property") and the improvements located thereon (the "Improvements").
Under the Agreement, Assignor is obligated to assign to Assignee
any and all of its right, title and interest in and to the Intangible Property
(as defined in the Agreement), which Intangible Property includes:
(a) the Tenant Leases (as defined in the Agreement);
(b) certain service agreements, maintenance contracts,
warranties, guarantees, management contracts and bonds, together with all
supplements, amendments and modifications thereto, relating to the Real Property
(the "Service Contracts");
(c) any interest of Seller in the licenses, permits, certificates
of occupancy, approvals, dedications, subdivision maps and entitlement issued,
approved or granted by governmental authorities or otherwise in connection with
the Real Property, trade names, trademarks, and logos used by Assignor in the
operation and identification of the Improvements and/or the Real Property,
including, without limitation, the right to use the names "Highway 50 Business
Center," "Xxxxxxxx Business Center" and any other trade name now used in
connection with the Real Property, any and all development rights and other
intangible rights, titles, interests, privileges and appurtenances owned by
Assignor and in any way related to or used in connection with the Real Property
and its operation, and all licenses, consents, easements, rights of way and
approvals required from private parties to make use of utilities and to insure
vehicular and pedestrian ingress and egress to the Real Property and the
Improvements ("Licenses and Permits"); and
(d) all non-confidential books and records maintained by Seller
in connection with the operation of the Real Property, all preliminary, final
and proposed building plans and specifications (including "as built" drawings)
respecting Improvements, and all structural reviews, architectural drawings and
engineering, soils, seismic, geological and architectural reports, studies and
certificates and other documents pertaining to the Property which are within the
possession of, under the control of or reasonably available to Assignor and such
additional books, records, plans, specifications,
38
reports, studies and other documents maintained or prepared after the date of
the Agreement ("Records and Plans").
NOW, THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, Assignor hereby assigns,
sells, transfers, sets over and delivers unto Assignee all of Assignor's estate,
rights, title and interest in and to the Intangible Property and Assignee hereby
accepts such assignment, subject to the covenants, representations and
warranties of Seller (and all limitations thereof) with respect to the
Intangible Property as set forth in the applicable provisions of the Agreement,
all of which are hereby deemed to be incorporated by reference the same as those
set forth in full herein.
Assignor hereby covenants that Assignor will, at any time and
from time to time upon written request therefrom, execute and deliver to
Assignee, Assignee's successors, nominees and assigns, any new or confirmatory
instruments which Assignee, Assignee's successors, nominees, and assigns may
reasonably request in order to fully assign and transfer to and vest in
Assignee, or Assignee's successors, nominees and assigns, and protect Assignee's
or Assignee's successors, nominees and assigns right, title and interest in and
to the Intangible Property or to otherwise realize upon or enjoy such rights in
and to the Intangible Property.
Assignee hereby assumes the performance of all of the terms,
covenants and conditions imposed upon Assignor under the Intangible Property
(including the obligations of the landlord under the Tenant Leases) accruing or
arising on or after the date of this Agreement.
Subject to the limitations on Assignee's liability set forth in
the Agreement, Assignee hereby agrees to indemnify and hold harmless Assignor,
Assignor's agents and their respective successors and assigns from and against
any and all claims, losses, liabilities and expenses, including reasonable
attorneys' fees, suffered or incurred by Assignor by reason of any breach or
alleged breach by Assignee from and after the Closing Date (as defined in the
Agreement) of any of Assignee's obligations under the Tenant Leases, Service
Contracts, Licenses and Permits or Records and Plans.
Subject to the limitations on Assignor's liability set forth in
the Agreement, Assignor hereby agrees to indemnify and hold harmless Assignee,
Assignee's agents and their respective successors and assigns from and against
any and all claims, losses, liabilities and expenses, including reasonable
attorneys' fees, suffered or incurred by Assignee by reason of any breach or
alleged breach by Assignor prior to the Closing Date of any of Assignor's
obligations under the Tenant Leases, Service Contracts, Licenses and Permits or
Records and Plans.
In the event of the bringing of any action or suit by a party
hereto against another party hereunder by reason of any breach of any of the
covenants, conditions, agreements or provisions on the part of the other party
arising out of this Assignment,
39
then in that event the prevailing party shall be entitled to have and recover of
and from the other party all costs and expenses of the action or suit including
reasonable attorneys' fees, court costs and fees of experts.
All defined terms used herein shall have meanings given such terms
in the Agreement, and are hereby incorporated herein by reference.
This Assignment may be executed in counterparts, each of which
shall be deemed an original, but all of which, together, shall constitute on and
the same instrument.
This Assignment shall be binding upon and inure to the benefit of
the successors, assignees, personal representatives, heirs and legatees of all
of the respective parties hereto.
This Assignment shall be governed by, interpreted under, and
construed and enforceable in accordance with, the laws of the State of
California.
This Assignment is intended to supplement the terms and provisions
of the Agreement and shall be construed as consistent therewith to the greatest
extent possible. This Assignment shall not be deemed to modify or amend the
Agreement. In the event of an irreconcilable conflict between the provisions of
the Agreement and this Assignment, the provisions of the Agreement shall
prevail.
IN WITNESS WHEREOF, Assignor and Assignee have executed this
Assignment and Assumption of Intangible Property as of the date first written
above.
ASSIGNOR: Xxxxxx Sacramento Associates,
By:
---------------------------------------------
Its:
--------------------------------------
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
40
ASSIGNEE: Pacific Gulf Properties Inc., a Maryland corporation
By:
----------------------------------------
Its:
----------------------------------------
By:
----------------------------------------
Its:
----------------------------------------
