EXHIBIT 10.3
CONTRIBUTION/PURCHASE AGREEMENT
AND JOINT ESCROW INSTRUCTIONS
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TO: Chicago Title Insurance Company Escrow No.:______________________
0000 XXX Xxxxxxx, Xxxxx 000 Escrow Officer: Xxxxxx X. Xxxxxx
Xxxxxx, Xxxxx 00000-0000 Title Order No.:_________________
Attention: Xxxxxx X. Xxxxxx Title Officer:___________________
THIS CONTRIBUTION/PURCHASE AGREEMENT AND JOINT ESCROW INSTRUCTIONS
("Agreement") is made and entered into as of this 30th day of January, 1998 (the
"Effective Date"), by and between the Sellers (hereinafter identified), and
XXXXXXXX PROPERTIES ACQUISITION PARTNERS, L.P., a Delaware limited partnership
("Buyer"), with respect to the following with limited joinders by Xxxxxxxx
Properties Trust, a Maryland real estate investment trust ("Company") and
Xxxxxxxx Properties I, Inc., a Delaware corporation ("OP General Partner"):
R E C I T A L S :
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A. The term "Sellers" or "Seller" used throughout this Agreement
means the following persons:
1. Xxxxxx X. Xxxxxx and Xxxxxxx Xxxxx Xxxxxx, as Co-Trustees of
the X-X Xxxxxx Trust established March 15, 1984 by Xxxxxx X. Xxxxxx and
Xxxxxxx Xxxxx Xxxxxx, Trustors (the "D-D-Shiley Trust"), doing business as
Shadowridge Plaza, which owns that certain land located in the City of
Vista, County of San Diego, State of California, more particularly
described as "Property No. 1" on Exhibit "A" attached hereto and
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incorporated herein by this reference, together with all buildings located
thereon commonly known as Shadowridge Plaza ("Building No. 1").
2. Xxxxxx Xxxxxx Xxxxxx, as Trustee of the Xxxxxx Family Trust
(Trust B) dated July 14, 1972 (the "Xxxxxx Family Trust"), Trustee, who
owns that certain land located in the City of Irvine, County of Orange,
State of California, more particularly described as "Property No. 2" on
Exhibit "A", together with all buildings located thereon commonly known as
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Sorin BioMedical Buildings ("Building No. 2").
3. With respect to Shadowridge Business Center, a California
limited partnership, ("Shadowridge"), the D-D-Shiley Trust as to a 15%
general partner interest, F.M. (Xxxxx) Xxxxxxxx, Trustee of the F.M.
(Xxxxx) Xxxxxxxx Trust established September 17, 1985 ("Xxxxx") as to a
16.25% general partner interest, Newport National Corporation, a California
corporation ("NNC") as to a 2.5% general partner interest, Xxxxxx Xxxxxxxx
("Xxxx") as to a 3.125% general partner interest, Xxxxx Xxxxxxxx ("Xxxxx")
as to a 3.125% general partner interest, and Xxxxxx Xxxxxx Xxxxxx, as
Trustee of Xxxxxx Family Trust as to a 60% limited partner interest.
4. With respect to Xxxxxxx Way Associates, a California limited
partnership, Xxxxx as to a 50% general partner interest, the Xxxxxx Family
Trust as to a 33.333% limited partner interest, and Xxxxxxx Investment
Company, L.P., a California limited partnership ("Xxxxxxx") as to a 16.667%
limited partner interest.
5. With respect to Sycamore Investments, a California general
partnership, the Xxxxxx Family Trust as to an 80% general partner interest,
the D-D-Shiley Trust as to a 10% general partner interest, and Xxxxx as to
a 10% general partner interest.
6. With respect to Copperwood Leasing Company, a California
limited partnership, the D-D-Shiley Trust as to a 10% general partner
interest, Xxxxx as to a 24% general partner interest, NNC as to a 1%
general partner interest, the D-D-Shiley Trust as to a 27.5% limited
partner interest, and the Xxxxxx Family Trust as to a 37.5% limited partner
interest.
7. With respect to Palomar Venture, a California limited
partnership, Xxxxx as to a 4% general partner interest, NNC as to a 16%
general partner interest, the D-D-Shiley Trust as to a 10% general partner
interest, D. Xxxx Xxxxxx ("Xxxxxx") as to a 5% general partner interest,
and the Xxxxxx Family Trust as to a 65% limited partner interest.
8. With respect to Rancho Xxxxxxxx Associates, a California
general partnership, NNC as to a 37.5% general partner interest, the D-D-
Shiley Trust as to a 50% general partner interest, Xxxx as to a 6.25%
general partner interest, and Xxxxx as to a 6.25% general partner interest.
9. With respect to Eastside Associates, a California limited
partnership, Xxxxx as to an 8.5% general partner interest, NNC as to a 23%
general partner interest, Xxxx as to a 4.25% general partner interest,
Xxxxx as to a 4.25% general partner interest, the D-D-Shiley Trust as to a
20% general partner interest, and the Xxxxxx Family Trust as to a 40%
limited partner interest.
10. With respect to The Campus, LLC, a California limited
liability company, Xxxxx as to a 3.85% membership interest, NNC as to a
22.4% membership interest, the D-D-Shiley Trust as to a 65% membership
interest, Xxxx as to a 4.2% membership interest, and Xxxxx as to a 4.55%
membership interest.
11. As to La Terraza Associates, a California general
partnership, NNC as to a 40% general partner interest, and the Xxxxxx
Family Trust as to a 60% general partner interest.
Each of the persons, trusts and other entities identified above in
Paragraphs 1 through 11 are referred to herein from time to time collectively as
"Seller." The entities identified above in Paragraphs 3 through 11 are referred
to herein from time to time collectively
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as "Partnerships". The term "Seller" as used herein may from time to time mean
one owner with respect to the property that it owns. The Sellers identified as
D-D-Shiley Trust and the Xxxxxx Family Trust in Paragraphs 1 and 2 above are
referred to collectively from time to time herein as the "Xxxxxx Entities". The
Sellers identified in Paragraphs 3 through 11 as Bruce, Jeff, Scott, Dahlke,
Xxxxxxx and NNC are referred to collectively from time to time herein as the
"NNC Entities". The land identified herein as Properties No. 1 and 2 inclusive
are referred to collectively in this Agreement from time to time as the "Xxxxxx
Land." The improvements identified as Buildings No. 1 and 2 inclusive are
referred to collectively in this Agreement from time to time as the "Xxxxxx
Buildings." The Land owned by the Partnerships identified in Paragraphs 3
through 11, and described on Exhibit "A" attached hereto and incorporated
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herein, is referred to collectively in this Agreement from time to time as the
"Partnership Land". The Improvements owned by the Partnerships identified in
Paragraphs 3 through 11 are referred to collectively in this Agreement from time
to time as the "Partnership Buildings".
B. The Xxxxxx Entities desire to sell and convey to Buyer for cash
the following (collectively, the "Xxxxxx Interests"):
1. The "Xxxxxx Land", together with the Xxxxxx Buildings and all
associated parking garages and areas, and all other improvements located on
the Xxxxxx Land (collectively, the "Xxxxxx Improvements");
2. All of the Xxxxxx Entities' interest in all rights,
privileges, easements and appurtenances benefiting the Xxxxxx Land and/or
the Xxxxxx Improvements, including, without limitation, all mineral and
water rights and all easements, rights-of-way and other appurtenances used
or connected with the beneficial use or enjoyment of the Xxxxxx Land and/or
the Xxxxxx Improvements (the Xxxxxx Land, the Xxxxxx Improvements and all
such rights, privileges, easements and appurtenances are sometimes
collectively hereinafter referred to as the "Xxxxxx Real Property");
3. All of the Xxxxxx Entities' interest, as landlord, in and to
all leases, subleases, licenses and other occupancy agreements affecting
any portion of the Xxxxxx Real Property (collectively, the "Xxxxxx
Leases");
4. All personal property, equipment, supplies and fixtures
(collectively, the "Xxxxxx Personal Property") owned by the Xxxxxx
Entities, located at and used in the operation of the Xxxxxx Real Property
and described on Exhibit "A-1" attached hereto; and
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5. All of the Xxxxxx Entities' interest in any intangible
property appurtenant to the foregoing, including, without limitation,
contract rights, warranties, guaranties, licenses, permits, entitlements,
plans (including, without limitation, plans or permits relating to seismic
retrofitting), governmental approvals and certificates of occupancy which
benefit the Xxxxxx Real Property and/or the Xxxxxx Personal Property (the
"Xxxxxx Intangible Personal Property"). The Xxxxxx Real Property, the
Xxxxxx Personal Property, the Xxxxxx Entities' interest as landlord under
the Xxxxxx Leases, and
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the Xxxxxx Intangible Personal Property are collectively hereinafter
referred to as the "Xxxxxx Property."
6. All of the Xxxxxx Entities' rights, title and interest in and
to the Partnerships (the "Xxxxxx Partnership Interests").
C. The NNC Entities desire to contribute all of their right, title
and interests in and to the Partnerships (collectively the "NNC Interests") to
Buyer in exchange for cash or Units, and Buyer desires to acquire the NNC
Interests in the Partnerships from the NNC Entities upon the terms and
conditions hereinafter set forth.
D. Upon completion of the acquisition of the Xxxxxx Entities interests
in the Partnerships, and the NNC Entities interests in the Partnerships, Buyer
will own all of the outstanding Partnership interests and it is anticipated that
the Partnerships will concurrently therewith dissolve pursuant to state law. In
order to reflect the transfer of fee title from the Partnerships to Buyer upon
the dissolution of the Partnerships, the Partnerships shall deliver a grant deed
to Buyer conveying the Partnership Real Property (hereinafter defined) to Buyer.
Upon the dissolution of the Partnerships, the Buyer will receive the following:
1. The Partnership Land, together with the Partnership Buildings
and all associated parking garages and areas, and all other improvements
located on the Partnership Land (collectively, the "Partnership
Improvements");
2. All of the Partnerships' interest in all rights, privileges,
easements and appurtenances benefiting the Partnership Land and/or the
Improvements, including, without limitation, all mineral and water rights
and all easements, rights-of-way and other appurtenances used or connected
with the beneficial use or enjoyment of the Partnership Land and/or the
Partnership Improvements (the Partnership Land, the Partnership
Improvements and all such rights, privileges, easements and appurtenances
are sometimes collectively hereinafter referred to as the "Partnership Real
Property");
3. All of the Partnerships' interest, as landlord, in and to all
leases, subleases, licenses and other occupancy agreements affecting any
portion of the Partnership Real Property (collectively, the "Partnership
Leases");
4. All personal property, equipment, supplies and fixtures
(collectively, the "Partnership Personal Property") owned by the
Partnerships, located at and used in the operation of the Partnership Real
Property and described on Exhibit "A-1" attached hereto; and
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5. All of the Partnerships' interest in any intangible property
appurtenant to the foregoing, including, without limitation, contract
rights, warranties, guaranties, licenses, permits, entitlements, plans
(including, without limitation, plans or permits relating to seismic
retrofitting), governmental approvals and certificates of occupancy which
benefit the Partnership Real Property and/or the Partnership Personal
Property (the "Partnership Intangible Personal Property"). The Partnership
Real Property,
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the Partnership Personal Property, the Partnerships' interest as landlord
under the Partnership Leases, and the Partnership Intangible Personal
Property are collectively hereinafter referred to as the "Partnership
Property."
E. The Xxxxxx Improvements and the Partnership Improvements are
collectively referred to as the "Improvements"; the Xxxxxx Land and the
Partnership Land are collectively referred to as the "Land". The Partnership
Buildings and the Xxxxxx Buildings are collectively referred to as the
"Buildings". The Xxxxxx Real Property and the Partnership Real Property are
collectively referred to as the "Real Property". The Partnership Leases and the
Xxxxxx Leases are collectively referred to as the "Leases". The Partnership
Personal Property and the Xxxxxx Personal Property are collectively referred to
as the "Personal Property". The Xxxxxx Intangible Personal Property and the
Partnership Intangible Personal Property are collectively referred to as the
"Intangible Personal Property". The Real Property, the Personal Property, the
Seller's Interests as Landlord under the Leases and the Intangible Personal
Property are collectively referred to herein as the "Property".
A G R E E M E N T :
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NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Seller and Buyer agree
that the terms and conditions of this Agreement and the instructions to Chicago
Title Company ("Escrow Holder") with regard to the escrow ("Escrow") created
pursuant hereto are as follows:
1. Purchase and Sale of Xxxxxx Interests and Contribution of NNC
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Interests. The Xxxxxx Entities hereby agree to sell the Xxxxxx Interests to
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Buyer, and Buyer hereby agrees to purchase the Xxxxxx Interests from the Xxxxxx
Entities, upon the terms and conditions herein set forth. The NNC Entities
hereby agree to contribute the NNC Interests to Buyer and Buyer agrees to
acquire the NNC Interests for Units (as defined in Paragraph 24 hereof) and cash
from the Buyer upon the terms and conditions herein set forth.
2. Purchase Price.
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(a) General. Subject to adjustment as provided for in this
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Agreement, the contribution price ("Purchase Price") (i) for all of the
Property (other than Property No. 2) and the Partnerships (other than the
Property No. 7 Partnership Interests) shall be Fifty-Two Million Five
Hundred Thousand and 00/00 Dollars ($52,500,000.00) (ii) for Property No. 2
is Nine Million One Hundred and Twenty-Five Thousand and 00/00 Dollars
($9,125,000.00) and (iii) for the Property No. 7 Partnership Interests is
Six Million Three Hundred Seventy-Five Thousand and 00/00 dollars
($6,375,000).
(b) Adjustments. Buyer acknowledges that the Property owned by
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Palomar Venture ("Property No. 7") (commonly known as 5399 and 0000 Xxxxxxx
Xxxxxxx, Xxxxxxxx, Xxxxxxxxxx), is subject to a right of purchase by a
third party ("Third Party") pursuant to a right of first refusal. No later
than five (5) business days prior to the
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Close of Escrow, Seller shall notify Buyer, in writing, whether Property
No. 7 is no longer subject to the right of first refusal and is intended to
be conveyed to Buyer upon the Close of Escrow.
(i) If Seller notifies Buyer in writing that Property No. 7
is intended to be conveyed to Buyer as of the Close of Escrow, Seller
shall be required to provide to Buyer, together with such written
notice, documents evidencing that the Third Party's right of first
refusal relating to Property No. 7 has fully terminated, including,
but not limited to, a written termination waiver and release, executed
by the Third Party in a form acceptable to Buyer in its sole and
absolute discretion, waiving and releasing all such purchase rights
(collectively, the "Waiver Evidence"). If Buyer provides Seller with
written notice that it is satisfied with the Waiver Evidence, then the
Xxxxxx Partnership Interest and the NNC Interest relating to Property
No. 7 will be sold or contributed respectively, to Buyer upon the
Close of Escrow, and the Purchase Price shall include the Six Million
Three Hundred Seventy-Five Thousand and 00/100 Dollars ($6,375,000.00)
allocated to the Property No. 7 Partnership Interests. If Buyer is
not satisfied with the Waiver Evidence in its sole discretion, then
Buyer may at its sole option elect, prior to the Close of Escrow to
exclude the Xxxxxx Partnership Interest and the NNC Interest relating
to Property No. 7 from the Close of Escrow, and the Close of Escrow
for only Property No. 7 shall be delayed as provided for below.
(ii) If Seller notifies Buyer that Property No. 7 will not
be conveyed to Buyer as of the Close of Escrow, or if Buyer does not
approve of the Waiver Evidence and elects to exclude the Property No.
7 in its sole discretion from the Close of Escrow, then in either
case, the Close of Escrow shall occur on all of the Property other
than Property No. 7, and Buyer shall have the rights and Seller shall
have the obligations set forth in subparagraph (iii) below.
(iii) In the event Property No. 7 is excluded from the
Close of Escrow pursuant to Section (i) or (ii) above, and Seller
subsequently delivers the Waiver Evidence together with an updated
Estoppel Certificate from Third Party for its lease affecting Property
No. 7 (both of which shall be satisfactory to Buyer in its sole and
absolute discretion) to Buyer on or before sixty (60) days after the
Close of Escrow for the other Property, then the Close of Escrow for
Property No. 7 shall occur ten (10) business days after Buyer's
approval of the Waiver Evidence provided that all conditions for
Buyer's benefit to the conveyance of such Property No. 7 are satisfied
including, but not limited to, Paragraphs 7(a)(i), 7(a)(iv), 7(a)(v),
7(a)(vii), and 7(a)(viii) of the Agreement. However, in the event
Buyer does not receive the Waiver Evidence in a form satisfactory to
Buyer in its sole discretion on or before sixty (60) days after the
Close of Escrow for the other Properties, then Buyer shall not have
any further obligations under this Agreement in connection with
Property No. 7.
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3. Payment of Purchase Price. The Purchase Price for the Property shall
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be payable by Buyer as follows:
(a) Deposit. Two (2) business days after the Effective Date,
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Buyer shall deposit with Escrow Holder the sum of Two Hundred Fifty
Thousand and 00/00 Dollars ($250,000.00) (the "Deposit"). The Deposit
shall be nonrefundable to Buyer in the event this Agreement and the Escrow
are canceled unless (i) Buyer terminates this Agreement pursuant to
Paragraphs 7(a)(vii), 7(a)(viii) or 16 hereof or (ii) Buyer terminates this
Agreement because of a material breach by Seller of its obligations under
this Agreement including, but not limited to, Seller's failure to convey
the Property to Buyer as provided herein, and in which events the Deposit
and all accrued interest thereon shall be refunded to Buyer upon the
termination of this Agreement.
(b) Units.
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(i) An allocable portion of the Purchase Price for each
Partnership shall be paid to Seller by issuing Units or cash to the
NNC Entities based upon the portion of the Purchase Price for each
Partnership that is allocable to the interests of all of the partners
or members of the NNC Entities as set forth on Exhibit "L". The
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number of Units to be issued shall be set forth on Exhibit "M",
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attached hereto and incorporated herein, which shall provide and does
provide for Seller receiving a 5% premium (in addition to and not as a
reduction of the balance of the Purchase Price) (i.e., the Units
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issued shall have the value of one hundred five percent (105%) of the
amount of cash otherwise payable), with each Unit having a value equal
to Twenty-Seven and 59/00 Dollars ($27.59) which was determined as
being the average of the closing sales price of the common shares of
beneficial interest of the Company (the "Common Shares") on the New
York Stock Exchange for the 10 trading days from January 14, 1998
through January 28, 1998.
(ii) The portion of the Purchase Price allocable to the
Partnership interests of the Xxxxxx Entities and the Xxxxxx Property,
as set forth on Exhibit "L", shall be paid in cash.
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(iii) To the extent that Seller receives all or a portion
of the Purchase Price in the form of Units, the parties agree that
Seller's receipt of Units as contemplated by this Agreement shall be
reported, for federal income tax purposes, as a contribution by Seller
of all or a portion of the Property, as applicable, to the capital of
the Operating Partnership (as defined in Paragraph 24 hereof) in
exchange for the Units pursuant to Section 721 of the Internal Revenue
Code of 1986, as amended.
(c) Closing Funds. On the Close of Escrow, Buyer shall deposit
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or cause to be deposited with Escrow Holder, in Immediately Available
Funds, the balance of the cash portion of the Purchase Price (i.e., the
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Purchase Price less then amounts provided for in paragraphs (a) and (b)
above and elsewhere in this Agreement) plus or
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minus Buyer's share of closing costs, prorations and charges payable
pursuant to this Agreement.
4. Escrow.
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(a) Opening of Escrow. For purposes of this Agreement, the
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Escrow shall be deemed opened on the date Escrow Holder shall have received
a fully executed original or originally executed counterparts of this
Agreement from both Buyer and Seller (such date being referred to
hereinafter as the "Opening of Escrow").
(b) Close of Escrow. For purposes of this Agreement, subject to
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the terms of Paragraph 2(b) and Paragraph 4(c) of this Agreement, the
"Close of Escrow" shall be the date that all of the grant deeds, the forms
of which are attached hereto as Exhibit "B" (collectively, the "Grant
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Deeds"), conveying the Real Property, other than Property No. 2, to Buyer
(including the Grant Deeds from the Partnerships to Buyer), are recorded in
the Official Records of the county in which each respective parcel of Land
is located (the "Official Records"). Subject to the terms of Paragraph
2(b) of this Agreement, if all the Grant Deeds are not recorded on the same
day, then the Close of Escrow shall be on the day that the last Grand Deed
is so recorded. Unless extended in writing by Buyer and the Sellers, the
Close of Escrow shall occur on or before February 5, 1998 (the "Closing
Date"). The Sellers shall deliver possession of the Property to Buyer upon
the Close of Escrow, subject only to the "Approved Condition of Title" (as
defined in Paragraph 5 below).
(c) Close of Escrow for Property No. 2. For purposes of this
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Agreement, the "Close of Escrow" for Property No. 2 shall be the date that
the Grant Deed, the form of which is attached hereto as Exhibit "B",
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conveying Property No. 2 to Buyer, is recorded in the Official Records in
the County in which Property No. 2 is located. Unless extended in writing
by Buyer and Sellers, the Close of Escrow for Property No. 2 shall occur on
the date which is sixty (60) days after the Close of Escrow for the other
Properties (the "Property No. 2 Closing Date"). The Seller shall deliver
possession of Property No. 2 to Buyer upon the Close of Escrow for Property
No. 2, subject only to the Approved Condition of Title.
(d) Other. All references in this Agreement to "Close of Escrow"
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shall include the Close of Escrow for each respective Property to the
extent that the same occur after the Close of Escrow for the other
Properties, whether or not expressly stated (for example, each of the
conditions set forth in Paragraph 7 of this Agreement, which are to be
satisfied as of the Close of Escrow, shall be satisfied as of the
respective Close of Escrow for each property including Property No. 2 and
Property No. 7).
5. Condition of Title. It shall be a condition to the Close of Escrow for
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Buyer's benefit (which Buyer may waive in its sole and absolute discretion) that
title to the Real Property be conveyed to Buyer by the Xxxxxx Entities and the
Partnerships by the Grant Deed subject only to the following approved condition
of title ("Approved Condition of Title"):
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(a) a lien to secure payment of real estate taxes and
assessments, not delinquent;
(b) the lien of supplemental taxes assessed pursuant to Chapter
3.5 commencing with Section 75 of the California Revenue and Taxation Code
("Code") (but not any delinquent supplemental taxes);
(c) matters affecting the Real Property created by or with the
written consent of Buyer; and
(d) exceptions which are disclosed by the Title Report described
in Paragraph 7(a)(i) hereof and which are approved or deemed approved by
Buyer in accordance with such Paragraph 7(a)(i).
The Sellers covenant that, during the term of the Escrow, they will
not intentionally cause title to the Real Property to differ from the Approved
Condition of Title described in this Paragraph 5, provided that the Sellers
shall have no obligation to remove any liens or other encumbrances affecting
title to the Property except for liens evidencing monetary encumbrances (other
than nondelinquent real property taxes and assessments) which the Sellers shall
cause to be removed as of the Close of Escrow. Any liens, encumbrances,
encroachments, easements, restrictions, conditions, covenants, rights, rights-
of-way or other matters affecting the Approved Condition of Title which may
appear of record or be revealed after the date of the Title Report described in
Paragraph 7(a)(i) below shall also be subject to Buyer's approval as a condition
to the Close of Escrow for Buyer's benefit.
6. Title Policy. It shall be a condition to the Close of Escrow for
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Buyer's benefit (which Buyer may waive in its sole and absolute discretion) that
the "Title Company" (as defined in Paragraph 7(a)(i) hereof) is prepared to
issue its ALTA (Form B 1970) Owner's Extended Policy of Title Insurance ("Title
Policy") in the amount of the Purchase Price, showing title to the Real Property
vested in Buyer (or its assignee provided that any assignment shall not affect
the issuing of Units provided for in this Agreement), subject only to the
Approved Condition of Title and with such endorsements as are reasonably
requested by Buyer. If the Title Company does not commit to issue a Title
Policy for each Property by the Close of Escrow, Buyer may elect to terminate
this Agreement.
7. Conditions to Close of Escrow.
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(a) Conditions to Buyer's Obligations. The Close of Escrow and
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Buyer's obligation to consummate the transaction contemplated by this
Agreement are subject to the satisfaction of the following conditions (or
Buyer's written waiver thereof, it being agreed that Buyer may waive in
writing any or all of such conditions) for Buyer's benefit on or prior to
the dates designated below for the satisfaction of such conditions.
Whether or not Buyer terminates this Agreement and the Escrow due to the
nonsatisfaction of any such conditions, Buyer shall not be entitled to the
return of the Deposit and all interest accrued thereon except in accordance
with the provisions of Paragraph 3(a) above.
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(i) Title. Buyer shall have the right to review and approve
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or disapprove, in its reasonable discretion, the legal description of
the Land and any matters of title as disclosed by the following
documents ("Title Documents") to be delivered to Buyer at the Seller's
sole cost and expense: a CLTA title commitment issued by Chicago
Title Company (the "Title Company") with respect to each Property (the
"Title Report"), together with legible copies of the underlying
documents relating to the Schedule B exceptions set forth in such
title commitment. Buyer acknowledges that Seller has caused the Title
Company to deliver the Title Documents to Buyer. Buyer has obtained,
at its sole cost and expense, a survey of each Property. Buyer has
had until the Effective Date to give the Sellers and Escrow Holder
written notice ("Buyer's Title Notice") of Buyer's disapproval or
conditional approval of the legal description or any matters shown in
the Title Documents or the survey. The failure of Buyer to give
Buyer's Title Notice on or before the Effective Date shall be deemed
to constitute Buyer's approval of the legal description and all of the
Title Documents.
If Buyer disapproves or conditionally approves any matters
of title shown in the Title Documents, the Sellers shall give Buyer
written notice (which shall hereinafter be referred to as "Seller's
Title Notice"), within three (3) days of its receipt of Buyer's Title
Notice, of those matters of title disclosed on the Title Documents
that have not been approved by Buyer pursuant to this Paragraph
7(a)(i) which of the Sellers covenants and agrees to either eliminate
from the Title Policy as exceptions to title to the Property or to
ameliorate to Buyer's satisfaction by the Closing Date as a condition
to the Close of Escrow for Buyer's benefit. If the Sellers do not
elect in Seller's Title Notice to eliminate or ameliorate any
disapproved or conditionally approved matters as provided above, or if
Buyer disapproves, in Buyer's sole discretion, Seller's Title Notice,
then Buyer shall have the right, by a writing delivered to the Sellers
and Escrow Holder within two (2) days of Buyer's receipt of Seller's
Title Notice, to (A) waive its prior disapproval, in which event said
disapproved matter(s) shall be deemed approved, or (B) terminate this
Agreement and the Escrow created pursuant hereto, in which event the
Deposit shall be immediately delivered to Seller, and this Agreement,
the Escrow and the rights and obligations of the parties hereunder
shall terminate. If the Sellers fail to timely deliver Seller's Title
Notice, then the Sellers will be deemed to have elected not to
eliminate or ameliorate to Buyer's satisfaction any disapproved or
conditionally approved matters set forth in Buyer's Title Notice on or
before the Close of Escrow.
Notwithstanding anything to the contrary contained in this
Agreement, Buyer hereby disapproves all liens evidencing monetary
encumbrances (other than liens for non-delinquent real property taxes or
assessments), and the Sellers agree to cause all such liens to be
eliminated at the Sellers' sole cost and expense (including all prepayment
penalties and charges) prior to or concurrently with the Close of Escrow.
In the event any additional matters encumber the Property which are set
forth in any amendment or a supplement to the Title Documents
("Supplemental Title Documents"), Buyer shall give the Sellers and Escrow
Holder written notice ("Buyer's Supplemental Title Notice") of
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Buyer's disapproval or conditional approval of any matters shown on the
Supplemental Title Documents on or before the date which is three (3)
business days after Buyer's receipt of the Supplemental Title Documents.
The Sellers may elect to eliminate or ameliorate any disapproved or
conditionally approved matters relating to the Supplemental Title
Documents, and Buyer may elect to waive its prior disapproval of such
matters or terminate this Agreement in accordance with the time periods and
provisions set forth herein.
The parties acknowledge that the property located in Tucson,
Arizona owned by Eastside Associates is subject to a right of way easement
dated March 25, 1987 granted by Eastside Associates in favor of Tucson Gas
and Electric (the "Utility Company"), recorded April 1, 1987 in the
official records of Pima County, Arizona at Docket 8004, Page 868
(the "Easement"). Seller has discovered that the utility lines of the
Utility Company are not within the Easement, but are located in another
portion of the subject property. Notwithstanding anything in this
Agreement to the contrary, as an obligation which survives the Close of
Escrow, Seller, at its sole cost and expense, shall be responsible for
causing the Easement to be abandoned by the Utility Company in its present
location in a manner acceptable to Buyer in its reasonable discretion.
Such abandonment shall occur on or before ninety (90) days after the Close
of Escrow. Buyer agrees to cooperate with Seller in the granting of a new
easement, without any cost or expense to Buyer. In order to secure
Seller's performance of its obligation under this subparagraph to have the
Easement abandoned and a new easement recorded within ninety (90) days
after the Close of Escrow, the parties agree that Escrow Holder shall
retain as of the Close of Escrow, Twenty-Five Thousand Dollars ($25,000.00)
of the Purchase Price which shall be released in accordance with
instructions approved by Buyer, which instructions shall authorize the
disbursement of the $25,000.00 to Seller only in the event the abandonment
of the Easement is fully completed and a new easement, in a form reasonably
acceptable to Buyer, is recorded in a location approved by Buyer in its
reasonable discretion on or before ninety (90) days after the Close of
Escrow. Such escrow instructions shall also provide that if such matters
are not completed within such ninety (90) day period, the $25,000.00 shall
immediately be returned to Buyer without the need of further instructions.
(ii) Review and Approval of Documents and Materials. Seller
----------------------------------------------
has made available to Buyer at the offices of Newport National
Corporation in Carlsbad, California, (A) the documents, materials and
contracts respecting the Property set forth on Exhibit "A-2" attached
------- -----
hereto, or (B) such other documents in Seller's possession or control
which relate to the Property which Buyer shall reasonably request
(collectively, the "Documents and Materials"). Buyer may make copies
of the Documents and Materials, but Seller shall have no obligation to
provide Buyer with copies. Subject to the terms of Paragraph 25
hereof, Buyer shall have the right to review and approve or
disapprove, in its sole and absolute discretion, any or all of the
Documents and Materials for all of the Properties prior to the
Effective Date. The failure of Buyer to give Seller written notice of
its approval of all of the Documents and Materials on or before the
Effective Date shall be deemed to constitute Buyer's approval thereof.
-11-
(iii) Inspections and Studies. Prior to the Effective
-----------------------
Date, Buyer has had the right to approve or disapprove, in Buyer's
sole and absolute discretion, the results of any and all inspections,
investigations, tests and studies, including, without limitation,
investigations with regard to zoning, building codes and other
governmental regulations; architectural inspections; engineering
tests; soils, seismic and geologic reports; inspections of all or any
portion of the Improvements (including, without limitation,
structural, mechanical and electrical systems, roofs, pavement,
landscaping and public utilities); inspections, investigations, tests
and studies with respect to the environmental condition of the
Property; and any other physical inspections and/or investigations as
Buyer may elect to make or obtain. Subject to the terms of Paragraph
25 hereof, the failure of Buyer to give Seller written disapproval of
said results on or prior to the Effective Date shall be deemed to
constitute Buyer's approval thereof.
During the term of this Escrow, Buyer, its agents, consultants,
contractors and subcontractors shall have the right to enter upon the Real
Property (subject to the terms of the Leases) to conduct environmental
tests, inspect the Improvements, monitor and inspect the construction
activities at the Property, if any, and to conduct or make any and all
inspections and tests (including, without limitation, environmental
assessments of the Land, Buildings and Improvements and structural
assessments of the Buildings and Improvements) as may be necessary or
desirable in Buyer's discretion, provided that such inspections and tests
do not materially interfere with the tenants' use or enjoyment of the
Property. Prior to the exercise of the right of entry, and at all times
while Buyer or its agents are present upon the Real Property, Buyer shall
arrange for, keep and maintain in full force and effect a policy of
commercial general liability insurance with a per occurrence limit of not
less than $1,000,000 and an aggregate single limit of at least $1,000,000.
Buyer hereby indemnifies, agrees to defend, and holds Seller and the
Property harmless from and against any and all costs, losses, damages,
liabilities, liens, claims and expenses arising out of or resulting from
such entry by Buyer or its agents, consultants, contractors and
subcontractors. Buyer agrees to return the Property to substantially the
same condition in which the Property was prior to Buyer's making any
inspection.
(iv) Representations, Warranties and Covenants of Seller.
---------------------------------------------------
Seller shall have duly performed each and every covenant and agreement
to be performed by Seller pursuant to this Agreement as of the Close
of Escrow, and Seller's representations, warranties and covenants set
forth in Paragraph 14(a) hereof shall be true and correct in all
material respects as of the Close of Escrow.
(v) No Material Changes. As of the Close of Escrow, there
-------------------
shall have been no material adverse changes in the physical condition
of the Property from and after the Opening of Escrow.
(vi) Tenant Estoppel Certificates. No later than five (5)
----------------------------
business days prior to the Close of Escrow, Seller shall have obtained
and delivered to Buyer a tenant estoppel certificate disclosing no
material defaults or
-12-
material deferred maintenance under the Leases and otherwise
consistent with the Rent Roll for each Property ("Estoppel
Certificate"), substantially in the form attached hereto as Exhibit
-------
"C", duly executed by seventy-five percent (75%) of all tenants
---
occupying a premises which exceeds 2,300 rentable square feet (as
shown on the Rent Roll) and in all events from tenants occupying no
less than fifty percent (50%) of the rentable square footage of all
the Properties. Each Estoppel Certificate shall be dated not earlier
than sixty-five (65) days prior to Close of Escrow. Buyer's failure to
approve or disapprove the Estoppel Certificates (or any one of them),
as determined in Buyer's reasonable discretion, prior to the Close of
Escrow shall be deemed to constitute Buyer's approval thereof. Seller
shall use its commercially reasonable efforts to obtain the Estoppel
Certificates from the tenants and hereby grants Buyer the right to
communicate with any tenant under the Leases in connection with the
Estoppel Certificates. Such commercially reasonable efforts shall not
be construed to require Seller to threaten or initiate litigation,
grant any concession or pay any consideration.
(vii) Unit Recipient Certifications. No later than one (1)
-----------------------------
business day prior to the Close of Escrow, each Unit Recipient shall
deliver to Buyer a written statement wherein it shall represent,
warrant and covenant as follows:
(A) Unit Recipient is an "accredited investor" within
the meaning of Rule 501(a) promulgated under the Securities Act
of 1933, as amended (the "Securities Act"). Unit Recipient
understands the risks of, and other considerations relating to,
the acquisition of the Units. Unit Recipient, by reason of its
business and financial experience, together with the business and
financial experience of those persons, if any, retained by it to
represent or advise it with respect to its investment in the
Units, (i) has such knowledge, sophistication and experience in
financial and business matters and in making investment decisions
of this type, that it is capable of evaluating the merits and
risks of an investment in the Operating Partnership and of making
an informed investment decision, (ii) is capable of protecting
its own interests or has engaged representatives or advisors to
assist it in protecting its interests and (iii) is capable of
bearing the economic risk of such investment.
(B) The Units to be issued to each Unit Recipient will
be acquired by each Unit Recipient for its own account for
investment only and not with a view to, or with any intention of,
a distribution or resale thereof, in whole or in part, or the
grant of any participation therein until the Units are redeemed
for Common Stock of the Company following the lock-up period
specified in the Registration Rights Agreement in accordance with
the Partnership Agreement. Unit Recipient shall confirm that all
documents, records, and books pertaining to investment in the
Operating Partnership and requested by Unit Recipient have been
made available or delivered to Unit Recipient. Unit Recipient
has had an
-13-
opportunity to ask questions of and receive answers from the
Operating Partnership, or from a person or persons acting on the
Operating Partnership's behalf, concerning the terms and
conditions of the transaction contemplated by this Agreement and
its acquisition of Units. Unit Recipient has relied upon, and is
making its investment decisions, solely upon such information as
has been provided to Unit Recipient by the Operating Partnership.
Unit Recipient was not formed for the specific purpose of
acquiring an interest in the Operating Partnership.
(C) Unit Recipient acknowledges that (i) the Units to
be issued to Unit Recipient have not been registered under the
Securities Act or state securities laws by reason of a specific
exemption or exemptions from registration under the Securities
Act and applicable state securities laws, (ii) the Operating
Partnership's reliance on such exemptions is predicated in part
on the accuracy and completeness of the representations and
warranties of Unit Recipient referred to herein, and in the
Prospective Subscriber Questionnaires delivered to Buyer pursuant
to Paragraph 13(a)(ix) hereto, (iii) such Units, therefore,
cannot be resold unless registered under the Securities Act and
applicable state securities laws, or unless an exemption from
registration is available, (iv) there is no public market for
such Units, and (v) the Operating Partnership has no obligation
or intention to register such Units for resale under the
Securities Act or any state securities laws or to take any action
that would make available any exemption from the registration
requirements of such laws. Unit Recipient hereby acknowledges
that because of the restrictions on transfer or assignment of
such Units to be issued hereunder which are set forth in this
Agreement and in the Partnership Agreement, Unit Recipient may
have to bear the economic risk of the investment commitment
evidenced by this Agreement and any Units acquired hereby for an
indefinite period of time, and that, under the terms of the
Partnership Agreement of the Operating Partnership, as it will be
in effect on the Closing Date, Units will not be exchangeable at
the request of the holder thereof for cash or Common Shares of
the Company prior to the first (1st) anniversary of their
issuance.
(D) The address of Unit Recipient's residence or
principal place of business, as applicable, shall be set forth,
together with a statement as to whether such Unit Recipient has
any present intention of becoming a resident of any country,
state or jurisdiction other than the country and state in which
it present principal place of business or residence, as
applicable, is sited.
(viii) Offering of Units. There shall have been no change
-----------------
in any securities or related law, regulation or interpretation, nor
any change in any Unit Recipient's status as an "accredited investor"
under the Securities Act, that would render consummation of the
conveyance of any portion of the Property for Units as contemplated by
this Agreement a violation of any such laws, regulation or
-14-
interpretations thereof. The representations and warranties of each
Unit Recipient contained in this Agreement and in the Prospective
Subscriber Questionnaire shall be true and correct as of the Close of
Escrow.
(b) Conditions to Seller's Obligations. For the benefit of
----------------------------------
Seller, the Close of Escrow shall be conditioned upon both of the following
occurring prior to or concurrently with the Close of Escrow: (i) the
timely performance by Buyer of all of the obligations required by the terms
of this Agreement to be performed by Buyer (or Seller's waiver thereof, it
being agreed that Seller may waive such condition); and (ii) Buyer's
representations and warranties set forth in Paragraph 14(b) hereof shall be
true and correct in all material respects as of the Close of Escrow.
8. Deposits by Seller. At least one (1) business day prior to the Close
------------------
of Escrow for the respective Properties, Seller shall deposit or cause to be
deposited with Escrow Holder for each Property the following documents and
instruments (except for the items listed in subparagraphs (b), (d) and (i),
which Seller shall cause to be delivered to Buyer outside of the Escrow on or
before the Close of Escrow):
(a) Grant Deed. The Grant Deed conveying the Xxxxxx Real
----------
Property to Buyer, duly executed as appropriate by the Xxxxxx Entities,
acknowledged and in recordable form in the form attached hereto as
Exhibit "B";
------- ---
(b) Leases. The original Leases (and originals of all amendments
------
thereto) or correct copies of such documents to the extent originals are
not in Seller's possession;
(c) Tenant Lease Assignment. Tenant Lease Assignment
-----------------------
("Assignment of Leases"), duly executed by the Xxxxxx Entities, in the form
attached hereto as Exhibit "D", pursuant to which the Xxxxxx Entities shall
-----------
assign to Buyer all of the Xxxxxx Entities' right, title and interest in
and to the Xxxxxx Leases;
(d) Contracts. Any and all original management contracts,
---------
maintenance contracts, service contracts, reciprocal easement agreements,
if any, and any other contracts or agreements affecting or relating to the
leasing, ownership, operation, maintenance, construction or development of
the Property (collectively, the "Contracts") which may remain in effect
following the Close of Escrow and all warranties related thereto, if any,
which Buyer has approved and elected to assume in accordance with Paragraph
7(a) hereof, including, without limitation, any and all operating manuals
for all building systems and components to the extent the same are in
Seller's possession;
(e) Assignment of Contracts and Assumption Agreement. Assignment
------------------------------------------------
of Contracts and Assumption Agreement ("Assignment of Contracts"), duly
executed by the Xxxxxx Entities, in the form attached hereto as
Exhibit "E", pursuant to which the Xxxxxx Entities shall assign to Buyer
-----------
all of Xxxxxx Entities' right, title and interest in, under and to the
Contracts relating to the Xxxxxx Properties, and Buyer has approved and
elected to assume any and all warranties relative thereto;
-15-
(f) Xxxx of Sale. Xxxx of Sale ("Xxxx of Sale"), duly executed
------------
by the Xxxxxx Entities, in the form attached hereto as Exhibit "F",
-----------
conveying all of the Xxxxxx Entities' right, title and interest in and to
the Xxxxxx Personal Property;
(g) Tenant Letters. A letter signed by Seller, addressed to the
--------------
tenants advising the tenants of the sale herein to Buyer and directing that
all future rent payments and other charges are to be forwarded to Buyer at
an address to be supplied by Buyer;
(h) Transferor's Certification of Non-Foreign Status. The
------------------------------------------------
Transferor's Certification of Non-Foreign Status in the form attached
hereto as Exhibit "G", duly executed by Seller ("FIRPTA Certificate");
-----------
(i) Permits, Entitlements and the Like. Any and all original
----------------------------------
building and development permits, certificates of occupancy, utility will
serve letters, use permits and other governmental approvals and/or
entitlements relative to the Property, to the extent the same are in
Seller's possession;
(j) General Assignment. General Assignment ("General
------------------
Assignment"), duly executed by the Xxxxxx Entities, in the form attached
herein as Exhibit "H", conveying all of the Xxxxxx Entities' right, title
-----------
and interest in and to the Xxxxxx Intangible Personal Property; and
(k) UCC. A current certified UCC Report showing no financing
---
statements by Seller or Partnerships as debtor covering the Property
(Seller shall deliver copies of the same to Buyer no less than two (2) days
prior to the Close of Escrow).
(l) Limited Partner Signatures. A limited partner signature page
--------------------------
to the Partnership Agreement ("LP Signature Page") in substantially the
form attached hereto as Exhibit "N" executed by each Unit Recipient.
-----------
(m) Assignment of Partnership Interests. A Xxxx of Sale and
-----------------------------------
Assignment of Partnership or Limited Liability Company Interests
("Assignment of Interests") in the form attached hereto as Exhibit "Q",
-----------
duly executed by Seller.
(n) Partner's Guarantees. Partner's Guarantee, in the form
--------------------
attached hereto as "Exhibit "R" executed by the NNC Entities.
------------
(o) Evidence of Good Standing. Certificates of good standing (or
-------------------------
certificates of existence for each general partnership) issued by the
California Secretary of State, dated within thirty (30) days of the Close
of Escrow, for each of the Partnerships.
(p) Partnership Amendments. Documents necessary to convey, or
----------------------
reflect the conveyance of, the Xxxxxx Partnership Interests and the NNC
Interests (as defined in Recital "C" of this Agreement), including, but not
limited to, a Form LP-2 for the limited partnerships, a Statement of
Amendment for the general partnerships, duly executed by the appropriate
parties, for each of the Partnerships (collectively, the "Partnership
Amendments").
-16-
(q) Other Instruments. Such other instruments and documents as
-----------------
are described in Paragraph 21(b) herein.
(r) Opinion. If Xxxxxx is a Unit Recipient, an opinion of
-------
counsel for Xxxxxx in a form acceptable to Buyer and Buyer's counsel that
the offering and sale of Units to Unit Recipients is exempt from or
otherwise complies with all applicable state securities laws and
regulations including, but not limited to, applicable "roll-up" rules.
9. Deposits by Buyer. Buyer shall deposit or cause to be deposited with
-----------------
Escrow Holder the funds which are to be applied towards the payment of the
Purchase Price in the amounts and at the times designated in Paragraph 3 above
(as adjusted by the prorations and credits hereinafter provided). In addition,
Buyer shall deposit with Escrow Holder prior to the Close of Escrow the
following documents and instruments for each Property:
(a) Assignment of Lease. Counterpart of the Assignment of
-------------------
Leases, duly executed by Buyer;
(b) Assignment of Contracts. Counterpart of the Assignment of
-----------------------
Contracts, duly executed by Buyer;
(c) General Assignment. Counterpart of the General Assignment,
------------------
duly executed by Buyer; and
(d) Other Instruments. Such other instruments and documents as
-----------------
are described in Paragraph 21(b) herein.
(e) Dissolution of Partnerships. Documents reflecting the
---------------------------
dissolution of each of the Partnerships to be filed with the State of
California, or recorded in the Official Records, as appropriate.
(f) Partnership Grant Deeds. Grant Deeds from the Partnerships
-----------------------
to Buyer (collectively, the "Partnership Deeds").
10. Costs and Expenses.
------------------
(a) Title. The cost and expense of the CLTA standard portion of
-----
the Title Policy for all of the Properties shall be paid by the Sellers,
and Buyer shall pay for the portion of the Title Policy premium
attributable and/or payable for the ALTA extended coverage portion of the
Title Policy and all endorsements thereto. The escrow fee of Escrow Holder
shall be paid equally by the Sellers and Buyer. The Sellers shall pay all
transfer taxes payable in connection with the recordation of the Grant Deed
from the Xxxxxx Entities to Buyer and from each of the Partnerships to
Buyer and arising in connection with the transfer of the NNC Interests and
--------------------------------------------------------------------
the Xxxxxx Partnership Interests to Buyer. Buyer and the Sellers shall
-----------------------------------------
pay, respectively, the Escrow Holder's customary charges to buyers and
sellers for document drafting, recording and miscellaneous charges. If, as
a result of no fault of Buyer or the Sellers, Escrow fails to close, Buyer
and the Sellers shall share equally all of Escrow Holder's fees and
charges.
-17-
If Escrow fails to close due to the Fault of Buyer or Sellers, such party
at fault shall pay all of Escrow Holder's fees and charges, if any.
(b) Financing. The Sellers, at its sole cost and expense, shall
---------
pay for the costs associated with the releases of any deeds of trust,
mortgages and other financing encumbering the Property and any prepayment
premiums in connection with all the indebtedness secured by the same.
(c) Other. Seller shall pay for, and reimburse Buyer if paid by
-----
Buyer, all fees and expenses paid to the State of California or state
securities administrators in connection with perfecting any exemption from
applicable state securities laws and regulations.
(d) Partnerships. Seller shall pay for the cost of filing,
------------
recording, publishing notice and all other costs, expenses and fees
incurred in connection with the filing of the Partnership Amendments and
the dissolution of the Partnerships.
11. Prorations. The following prorations between Seller and Buyer shall
----------
be made by Escrow Holder computed as of the Close of Escrow:
(a) Taxes. Real and personal property taxes and assessments on
-----
the Property (including any supplemental taxes resulting from any new
construction in the Property) shall be prorated on the basis that Seller is
responsible for (i) all such taxes for the fiscal year of the applicable
taxing authorities occurring prior to the "Current Tax Period" (as
hereinafter defined) and (ii) that portion of such taxes for the Current
Tax Period determined on the basis of the number of days which have elapsed
from the first day of the Current Tax Period to the Close of Escrow,
inclusive, whether or not the same shall be payable prior to the Close of
Escrow. The phrase "Current Tax Period" refers to the fiscal year of the
applicable taxing authority in which the Close of Escrow occurs. In the
event that as of the Close of Escrow the actual tax bills for the year or
years in question are not available and the amount of taxes to be prorated
as aforesaid cannot be ascertained, then rates and assessed valuation of
the previous year, with known changes, shall be used, and when the actual
amount of taxes and assessments for the year or years in question shall be
determinable, then such taxes and assessments will be reprorated between
the parties to reflect the actual amount of such taxes and assessments.
Seller shall be responsible for, and shall indemnify, protect, defend (with
counsel chosen by Buyer) and hold harmless Buyer, the Partnerships and the
Real Property from and against any and all supplemental taxes, to the
extent that such taxes relate to any period occurring prior to the Close of
Escrow.
(b) Rentals. Rentals and other payments (including, without
-------
limitation, common area maintenance charges and payments for real property
taxes and insurance premiums) payable by tenants, licensees,
concessionaires and other occupants of the Property or any portion thereof
(collectively, the "Tenants") shall be prorated as of the Close of Escrow.
However, Buyer shall not be obligated to make any payment or give any
credit to Seller on account of, or by reason of, any rental or other
payments which are
-18-
unpaid as of the Close of Escrow, but shall be required merely to pay to
Seller, Seller's share of the same if, as and when received by Buyer. After
the Close of Escrow, all payments received by Buyer from the Tenants shall
be applied as follows: first, to the obligation or obligations of the
Tenants under the Leases accruing during the month in which the Close of
Escrow occurs; second, to any obligation or obligations of the Tenants
under the Leases attributable to any period occurring after the Close of
Escrow through the month in which payment is made and/or with respect to
obligations accruing after the Close of Escrow which are past due on the
date of receipt by Buyer; third, to all of Buyer's costs of collection
incurred with respect to the recovery of any such payments; and then, to
any amounts due Seller from such Tenants under the Leases for periods prior
to the Close of Escrow. Any rental payments received by Seller following
the Close of Escrow shall be paid over to Buyer within five (5) business
days of receipt and shall be applied in the manner described above. Seller
shall have no right whatsoever to initiate any action against any Tenant
for unlawful detainer or other right or action to dispossess such Tenant of
its leased premises with respect to any duties or obligations of such
Tenant under the Leases. Prior to closing Seller will distribute any funds
held in bank accounts to its respective partners and members in accordance
with their respective interests and will provide for the assumption by
Seller of all short term liabilities of the Partnerships.
(c) Security Deposits. Buyer shall be credited and Seller shall
-----------------
be charged with any security deposits and advanced rentals in the nature of
security deposits made by the Tenants under the Leases, except to the
extent such amounts have previously been applied to obligations of the
Tenants under the Leases and have been shown as having been so applied on
the Rent Roll for each Property attached hereto as Exhibit "J". Buyer
------- ---
shall also be credited and Seller shall be charged for all operating cost
pass-throughs paid by the Tenants and held by Seller in reserve for the
benefit of the Tenants for the repair and/or improvement of the Property.
Seller hereby agrees that it will not during the term of this Escrow or
upon the Close of Escrow apply any security deposits toward any delinquent
rental payments or any other amounts due under any Leases.
(d) Utilities. Gas, water, electricity, heat, fuel, sewer and
---------
other utilities and the operating expenses relating to the Real Property
shall be prorated as of the Close of Escrow to the extent such items are
not directly paid for by the Tenants under the Leases. If the parties are
unable to obtain final meter readings as of the date which is three (3)
business days prior to the Close of Escrow, such expenses shall be
estimated as of the Close of Escrow on the basis of the prior operating
history of the Real Property.
(e) Existing Lease Obligations. Subject to the treatment of
--------------------------
Special Lease Costs provided for below, Buyer shall be credited and Seller
shall be charged with operating costs (i.e., maintenance charges, taxes and
insurance), including, but not limited to maintenance obligations under the
Leases, tenant improvement costs and allowances, all leasing commissions
for leases entered into prior to the Close of Escrow (including all
commissions relating to any renewal or extension of a Lease or the leasing
of additional space exercised prior to the Close of Escrow) of the landlord
associated with the Leases existing prior to the Close of Escrow. Seller
shall have no obligation to Buyer for
-19-
expenses relating to lease renewals or expansions which are exercised by
tenants under the Leases after the Close of Escrow. Buyer shall be charged
and Seller credited for capital expenditures (repairs and replacements),
tenant improvement costs and leasing commissions (collectively, "Special
Lease Costs") relating to Leases and allocable to the period of time after
November 17, 1997, and prior to the Close of Escrow, to the extent actually
paid by Seller, as shown on Exhibit "U" attached; provided, however, the
------- ---
maximum amount of Special Lease Costs charged to Buyer shall not exceed
Twenty Thousand Six Hundred One and 26/100 Dollars ($20,601.26). Seller
shall be responsible for all other Special Lease Costs.
(f) Insurance. Buyer acknowledges that Buyer is not assuming any
---------
insurance policies currently maintained by Seller.
(g) Sales Tax and Other Tax Liability. Seller shall pay all
---------------------------------
federal, state, local and other taxes, duties, imposts, levies, fees and
other governmental exactions arising out of the transfer of the Xxxxxx
Partnership Interests or the NNC Interests to Buyer; provided, however,
this subparagraph (g) shall not require Seller to pay any income tax
obligations of Buyer.
Prior to the Close of Escrow, the parties shall agree upon all of the
prorations to be made and submit a statement to Escrow Holder setting forth the
same. In the event that any prorations, apportionments or computations made
under this Paragraph 11 shall require final adjustment (including any such
adjustment based on any post-closing, annual reconciliation of operating
expenses performed under the Leases), then the parties shall make the
appropriate adjustments promptly when accurate information becomes available and
either party hereto shall be entitled to an adjustment to correct the same. The
parties agree that they will estimate the proration of rents based on rental
payments received, and expenses incurred, prior to the end of business on
January 31, 1998, and that an appropriate adjustment shall be promptly made
following the Close of Escrow based on the rental payments received, and
expenses incurred, through the Close of Escrow. Provided that all such
information is available, all such adjustments shall be made within one hundred
and twenty (120) days after the Close of Escrow. Any corrected adjustment or
proration shall be paid in cash to the party entitled thereto. The provisions
of this Paragraph 11 shall survive the Close of Escrow and the recordation of
the Grant Deeds.
12. Escrow Disbursements and Other Actions. Upon the Close of Escrow,
--------------------------------------
Escrow Holder shall promptly undertake all of the following in the following
manner:
(a) Prorations. Prorate all matters referenced in Paragraph 11
----------
based upon the statement delivered into Escrow signed by the parties;
(b) Recording. Cause the Grant Deeds and the Partnership Grant
---------
Deeds and any other documents which the parties hereto may mutually direct,
to be recorded in the Official Records in the order directed by the
parties;
-20-
(c) Partnership Filings. File the Partnership Amendments and
-------------------
dissolution documents with the State of California or in the Official
Records, as appropriate, and otherwise satisfy any requirements relating to
the transfer of the Partnership Interests and the dissolution of the
Partnerships;
(d) Funds. Disburse from funds deposited by Buyer with Escrow
-----
Holder towards payment of all items (including, without limitation, the net
amount of the cash portion of the Purchase Price) chargeable to the account
of Buyer pursuant hereto in payment of such costs and disburse the balance
of such funds, if any, to Buyer;
(e) Documents to Seller. Deliver to Seller counterparts of the
-------------------
Assignment of Lease, the Assignment of Contracts and the General Assignment
executed by Buyer;
(f) Documents to Buyer. Deliver to Buyer originals of the Xxxx
------------------
of Sale, and the FIRPTA Certificate, and counterparts of the Assignment of
Leases, Assignment of Interests, Partner's Guaranties, the Assignment of
Contracts and the General Assignment appropriately executed by Seller, the
approved form of letter described in Paragraph 8(g) above addressed to the
Tenants advising such Tenants of this transaction and any other documents
which are to be delivered to Buyer hereunder;
(g) Title Policy. Direct the Title Company to issue the Title
------------
Policy to Buyer;
(h) Units. Concurrently with the Close of Escrow, Buyer shall
-----
deliver to the NNC Entities evidence of the issuance of the Units to the
NNC Entities in accordance with Exhibit "M"; and
----------------
(i) Registration Rights Agreements. At or prior to the Close of
------------------------------
Escrow, Buyer, the Company and the Unit Recipients will enter into the
Registration Rights Agreement (defined in Paragraph 24 hereof).
13. Covenants.
---------
(a) Seller. Seller hereby covenants with Buyer, as follows:
------
(i) New Contracts. From the Effective Date through the
-------------
Close of Escrow, Seller shall not and the Partnerships shall not,
without the prior written consent of Buyer, which Buyer may withhold
in its reasonable discretion, enter into any maintenance contract,
service contract, listing agreement or any other contract affecting or
relating to the Property or any portion thereof which will survive the
Close of Escrow or will otherwise affect the use, operation or
enjoyment of the Property after the Close of Escrow. Buyer's failure
to notify Seller within one (1) business day after receipt of Seller's
request for consent to such a contract whether or not Buyer consents
shall be deemed Buyer's consent.
-21-
(ii) Insurance. All insurance policies carried by Seller
---------
and the Partnerships with respect to the Property and in effect as of
the Effective Date shall remain continuously in full force and effect
from the Effective Date through the day upon which the Close of Escrow
occurs;
(iii) Amendments. From the Effective Date through the
----------
Close of Escrow, Seller and the Partnerships shall not amend, modify,
alter or supplement any Lease or any Contract which is approved by
Buyer pursuant to Paragraphs 7(a) or 13(a) hereof, or enter into any
new lease or contract or binding proposal for a new lease or contract,
without the prior written consent of Buyer which may be withheld in
Buyer's reasonable discretion. Buyer's failure to notify Seller
within three (3) business days after receipt of Seller's request for
consent to such a contract whether or not Buyer consents shall be
deemed Buyer's consent. Further, Seller shall terminate on or before
the Close of Escrow any Contract which Buyer disapproves in accordance
with Paragraph 7(a) hereof.
(iv) Operation. From the date of this Agreement until the
---------
Close of Escrow, Seller and the Partnerships shall operate, manage,
maintain and repair the Property consistent with Seller's and the
Partnership's existing business practices and subject to the terms of
Paragraph 11(e), shall satisfy and perform all obligations under the
Leases arising prior to the Close of Escrow. If Buyer approves, in
writing, any lease not listed on Exhibit "U", the amount of the
-----------
Special Lease Costs provided for in Paragraph 11(e) hereof shall be
increased by the amount of any additional Special Lease Costs
expressly set forth in Buyer's approval.
(v) No New Financing. After the date of this Agreement,
----------------
Seller and the Partnerships shall not alienate, lien, encumber or
otherwise transfer all or any portion of or interest in the Property
(other than to Buyer at the Close of Escrow). All Xxxxxx Personal
Property and Xxxxxx Intangible Personal Property shall be conveyed to
Buyer by Seller at the Close of Escrow free from any liens,
encumbrances or security interests of any kind or nature, and all
Partnership Personal Property and Partnership Intangible Property
shall be free from any liens, encumbrances or security interests of
any kind or nature as of the Close of Escrow;
(vi) Records. For a period of one (1) year following the
-------
Close of Escrow, Seller shall, upon Buyer's request and upon
reasonable prior notice, make all of Seller's non-proprietary records
with respect to the Property, which have not otherwise been turned
over to Buyer, available to Buyer for inspection, copying and audit by
Buyer's designated employees, accountants or consultants;
(vii) Materially Changed Condition. Seller shall, promptly
----------------------------
upon becoming aware of any such occurrence, notify Buyer in writing of
any material change in any condition with respect to the Property or
of any event or circumstance which makes any representation or
warranty of Seller to Buyer under
-22-
this Agreement untrue or misleading, and of any material covenant of
Seller under this Agreement which Seller will be incapable of
substantially performing (hereinafter, a "Materially Changed
Condition"). If Seller notifies Buyer of any Materially Changed
Condition, Buyer shall have two (2) business days following receipt of
written notice from Seller of such condition to review the events and
circumstances giving rise to such condition. If Buyer disapproves the
Materially Changed Condition (as determined in Buyer's reasonable
discretion), Buyer may terminate this Agreement. If Buyer does not
elect to terminate this Agreement and elects to consummate its
acquisition of the Property, it shall be deemed to have (i) waived any
claim regarding the Materially Changed Condition, (ii) accepted title
to and possession of the Property subject to the Materially Changed
Condition and (iii) amended this Agreement to reflect the Materially
Changed Condition.
(viii) Accounting Information. The parties acknowledge
----------------------
that Seller has provided to Buyer's representatives and independent
accounting firm access to financial and other information relating to
the Property in the possession of or otherwise available to Seller and
its affiliates from which Buyer's representatives and independent
accounting firm have prepared, at Buyer's expense, audited financial
statements for 1994, 1995 and 1996 in conformity with generally
accepted accounting principles and to enable them to prepare such
statements, reports or disclosures as Buyer may deem necessary or
advisable. All such information is being provided to Buyer without
any representation or warranty by Seller except that such information
was used by Seller in the ordinary course of its business. Seller
shall authorize and shall cause its management company to authorize
any attorneys who have represented Seller or its management company in
material litigation pertaining to or affecting the Property to
respond, at Seller's expense, to inquiries from Buyer's
representatives and independent accounting firm provided that any such
responses do not require an undertaking. If and to the extent Seller's
financial statements pertaining to the Property for any periods during
the years 1994, 1995 or 1996 have been audited, promptly after the
execution of this Agreement, Seller shall provide Buyer with copies of
such audited financial statements and shall cooperate with Buyer's
representatives and independent public accountants to enable them to
contact the auditors who prepared such audited financial statements
and to obtain, at Buyer's expense, a reissuance of such audited
financial statements. After the Close of Escrow, Seller shall
cooperate with, and promptly respond to reasonable requests from,
Buyer's accountants, including, but not limited to, audit letters
requesting information relating to matters prior to the Close of
Escrow, including, but not limited to, pending or threatened
litigation, claims and assessments; provided, however, information
provided by Seller to Buyer's accountants shall not constitute
additional representations and warranties of Seller.
(ix) Prospective Subscriber Questionnaire. Attached hereto
------------------------------------
as Exhibit "M" is a definitive list of all Unit Recipients to receive
-----------
Units at the Close of Escrow. Seller and each other Unit Recipient
shall deliver to the Operating
-23-
Partnership within no less than three (3) business days prior to the
Close of Escrow a completed and duly executed Prospective Subscriber
Questionnaire in substantially the form attached hereto as Exhibit
-------
"O", which Questionnaires shall confirm to the satisfaction of the
---
Operating Partnership that each Unit Recipient is an "accredited"
investor within the meaning of Rule 501(a) promulgated under the
Securities Act. Each Unit Recipient who is not an accredited investor,
including, but not limited to Xxxxxx, shall also deliver to the
Operating Partnership a supplement to such Questionnaire which shall
confirm to the satisfaction of the Operating Partnership such Unit
Recipient's investment sophistication in the form attached hereto as a
part of Exhibit "O". Seller and each Unit Recipient shall also deliver
-----------
to the Operating Partnership, upon the Operating Partnership's
reasonable request, such other information, certificates and materials
as the Operating Partnership may reasonably request in connection with
offering the Units without registration under the Securities Act and
the securities laws of applicable states and other jurisdictions.
(x) Depreciation and Amortization. In connection with the
-----------------------------
issuance of Units to any Unit Recipient, Seller shall deliver to
Buyer on or before the date which is forty-five (45) days after the
Close of Escrow at Seller's sole cost and expense, prepared as of the
date of this Agreement, depreciation and amortization schedules for
the assets constituting the Partnership Property, as kept for tax
purposes, showing original basis, accumulated depreciation or
amortization, original useful life of such assets, remaining useful
life of such assets and the date(s) when such assets were placed in
service.
(xi) Notifications. From the date of this Agreement until
-------------
the Close of Escrow, and then so long as any Unit Recipient holds any
Units, each such Unit Recipient shall notify the Operating Partnership
in writing promptly upon any change in the identity or number of its
partners or of its indirect partners as identified pursuant to this
Agreement, and shall provide the information called for in Paragraph
13(a)(ix) hereof with respect to any such change. In addition, so
long as any Unit Recipient holds any Units, without the prior written
consent of the Operating Partnership, each Unit Recipient shall not
(i) admit additional partners, (ii) permit the transfer of interests
in each Unit Recipient to a look-through entity (as hereinafter
defined) or (iii) permit any transfer of interests in such Unit
Recipients if, as a result of the admissions or transfers described in
(i) through (iii) the number of direct or indirect beneficial owners
in such Unit Recipients would increase. Each Unit Recipient shall use
their best efforts to secure the compliance of any look-through
entities that hold direct or indirect interests of such Unit
Recipients with the requirements of this Paragraph as if such
requirements applied directly to such entities. Each Unit Recipient
acknowledges that the provisions of this Paragraph are imposed to aid
the Operating Partnership in avoiding taxation as a corporation for
federal income tax purposes, agrees that monetary damages may be
insufficient to remedy the potential harm caused by any breach of the
provisions of this Paragraph, and agrees that injunctive relief,
including specific performance or another equitable
-24-
remedy would be an appropriate remedy. The provisions of this
Paragraph shall survive the recording of the Grant Deed and the Close
of Escrow. For purposes of this Agreement, a "look-through entity"
shall mean a partnership (or other entity treated as a partnership for
federal income tax purposes), S-corporation or grantor trust.
(xii) Partnership Agreement. Seller acknowledges that each
---------------------
Unit Recipient shall be bound by and subject to all terms of the
Partnership Agreement. At or prior to the Closing, Seller shall
------
deliver to the Operating Partnership a Limited Partner Signature Page
in substantially the form attached hereto as Exhibit "N" executed by
-----------
each Unit Recipient.
(xiii) No Marketing. Upon execution of this Agreement,
------------
Seller shall not market the Property for sale or enter into
discussions or negotiations with potential purchasers of the Property
unless this Agreement has been terminated pursuant to its terms.
(xiv) Basement Guarantee. The NNC Entities shall guarantee
------------------
certain indebtedness secured by the Operating Partnership Property.
The NNC Entities shall execute Partner's Guarantees ("Guarantees"), in
substantially the same form as attached hereto as Exhibit "R,"
------------
guaranteeing for the benefit of the applicable lenders the repayment
of certain indebtedness of Buyer in the amount shown on Exhibit "T".
-----------
Buyer agrees that it will not provide, nor grant its consent to any
other limited partners of Buyer requesting to provide, additional
guarantees for the portion of the indebtedness which is the subject of
the Guarantees. In addition, Buyer shall maintain indebtedness in a
minimum amount sufficient to allow the NNC Entities to guaranty
indebtedness which is no less than the aggregate amount of the
Guarantees.
(xv) Property No. 2 Hazardous Materials. Buyer and Seller
----------------------------------
acknowledge that Property No. 2 may contain certain Hazardous
Materials (as defined in Paragraph 14(a)(vi) hereof). If Buyer
acquires Property No. 2, the Xxxxxx Entities shall indemnify, protect,
defend (by counsel acceptable to Buyer) and hold harmless Buyer and
its partners, directors, officers, employees, members, shareholders,
lenders, tenants, agents, contractors and each of their respective
successors, assigns and assignees (individually and collectively,
"Buyer's Indemnitees") from and against any and all claims, judgments,
causes of action, damages, penalties, fines, taxes, costs,
liabilities, losses and expenses (including, without limitation,
reasonable attorneys' fees and court costs) arising at any time
before, on or after the Close of Escrow as a result (directly or
indirectly) of or arising from or in connection with, or caused in
whole or in part, directly or indirectly, by (a) Seller and/or any of
Seller's employees or agents breach of any Environmental Law (defined
in Paragraph 14(a)(vi) hereof); or (b) the presence of Hazardous
Materials on, in, under or about Property No. 2 as of the date of the
Close of Escrow. However, nothing in this subparagraph 13(a)(xv) shall
create any liability for Seller for any consequential damages or
claims based on any
-25-
diminution in value of Property No. 2 because of the existence of
Hazardous Materials. This indemnity shall include the cost of any
required or necessary investigation, repair, response, removal,
remediation, cleanup or detoxification, and the preparation and
implementation of any closure, monitoring or other required plans,
only to the extent such actions are required by applicable laws,
rules, regulations or orders and all sums paid in settlement of
claims, litigation, arbitration and administrative proceeding costs,
and expert, consultant and laboratory fees. The Xxxxxx Entities'
obligations pursuant to the foregoing indemnity shall survive the
Close of Escrow and the recording of the Grant Deed.
(b) Post Closing Restrictions. Buyer and the NNC Entities agree
--------------------------
to the terms and conditions set forth on Exhibit "S", attached hereto and
-----------
incorporated herein by this reference.:
14. Representations and Warranties.
------------------------------
(a) By Seller. In consideration of Buyer entering into this
---------
Agreement and as an inducement to Buyer to purchase the Property, Seller
makes the following representations and warranties (subject to the matters
disclosed on the Disclosure Statement attached hereto as Exhibit "K"
-----------
("Disclosure Statement")), each of which is material and is being relied
upon by Buyer (and the continued truth and accuracy of which shall
constitute a condition precedent to Buyer's obligations hereunder);
provided, however, the Xxxxxx Entities are not making and shall not be
liable for any inaccuracies in the representations or warranties set forth
in subparagraphs 14(a)(ii) through 14(a)(x) hereof. The Xxxxxx Entities
shall be deemed to be making the representations and warranties set forth
in subparagraphs 14(a)(i), 14(a)(xi) 14(a)(xiv), 14(a)(xv), 14(a)(xvi),
14(a)(xvii) and 14(a)(xix) as they relate to the Xxxxxx Partnership
Interests, and the NNC Entities shall be deemed to be making the
representations and warranties set forth in subparagraphs 14(a)(xi) through
14(a)(xx) as they relate to the NNC Interests.
(i) Representations Regarding Seller's Authority and
------------------------------------------------
Partnership's Good Standing.
---------------------------
(A) Each of the Sellers has the legal power, right and
authority to enter into this Agreement and the instruments
referenced herein, and to consummate the transaction contemplated
hereby;
(B) All requisite action (corporate, trust, partnership
or otherwise) has been taken by each of the Sellers in connection
with the entering into this Agreement, the instruments referenced
herein, and the consummation of the transaction contemplated
hereby. No consent of any partner, shareholder, trustee,
trustor, beneficiary, creditor, investor, judicial or
administrative body, governmental authority or other party is
required or, if required, has been obtained; and
-26-
(C) The individuals executing this Agreement and the
instruments referenced herein on behalf of each of the Sellers
and the members of each Seller have the legal power, right, and
actual authority to bind Seller to the terms and conditions
hereof and thereof.
(D) Each Partnership is a general partnership, limited
partnership, or limited liability company duly organized, validly
existing, and in good standing under the laws of the State of
California, with full power and authority to conduct its business
as it is now being conducted, to own or use the properties and
assets that it purports to own or use, and to perform all its
obligations. Each Partnership is duly qualified to do business
as a foreign general partnership, limited partnership or limited
liability company and is in good standing under the laws of each
state or other jurisdiction in which either the ownership or use
of the properties owned or used by it, or the nature of the
activities conducted by it, requires such qualification.
(ii) Threatened Actions. To Seller's actual knowledge,
------------------
there are no pending, and to Seller's actual knowledge no threatened,
actions, suits, arbitrations, claims or proceedings, at law, in equity
or otherwise, that would adversely affect, any of the Sellers, the
Partnerships, the Property or Seller's ability to perform its
obligations under this Agreement including, but not limited to,
judicial, municipal or administrative proceedings in eminent domain,
collection actions, claims relating to alleged building code
violations or health and safety violations, federal, state or local
agency actions regarding environmental matters, lease disputes, claims
relating to federal environmental protection agency or zoning
violations, or actions relating to personal injuries or property
damages alleged to have occurred at the Real Property or by reason of
the condition or use of or construction on the Real Property. Without
limiting the preceding terms of this Paragraph 14(a)(ii), the NNC
Entities hereby represent and warrant that, to the actual knowledge of
the NNC Entities, as of the date of this Agreement there are no
payments, assessments, fees or charges owing, and no outstanding
liabilities, obligations or commitments, in connection with any of the
items identified on Exhibit "W" attached hereto and incorporated
-----------
herein. The NNC Entities shall be deemed to have had actual knowledge
of any such matter if a reasonably prudent manager of commercial
property would have had knowledge of such matter regardless of whether
the NNC Entities actually had such knowledge.
(iii) No Contracts. Other than the Leases, the Contracts
------------
and the matters disclosed in the Title Report, there are no leases,
surface or subsurface use agreements, tenancy arrangements, service
contracts, management agreements, or other agreements, instruments or
encumbrances created by Seller, by any Partnership, or to Seller's
actual knowledge created by any other person or entity, which will be
in force or effect as of the Close of Escrow that grant to any person
whomsoever or any entity whatsoever any right, title, interest or
benefit in or to all or any part of the Property or any right relating
to the ownership, use, operation,
-27-
management, maintenance, enjoyment or repair of all or any part of the
Property, and no person or entity has any rights to acquire any of the
foregoing by virtue of the acts of Sellers or the Partnerships;
(iv) Compliance with Law. To Seller's actual knowledge, (A)
-------------------
neither Seller nor the Partnerships have received any written notice
and does not otherwise have knowledge of any violation of any
applicable laws, ordinances, rules, requirements, regulations and
building codes of any governmental agency, body or subdivision thereof
bearing on the Property; and (B) none of the Sellers or Partnerships
has violated or failed to comply in any material respect with any
statute, law, ordinance, regulation, rule, decree or order of any
foreign, federal, state or local government or any other governmental
department or agency, or any judgment, decree or order of any court.
(v) Documents True. To Seller's actual knowledge, all
--------------
documents delivered by Seller or made available to Buyer pursuant to
this Agreement are true, correct and complete copies of the versions
of such documents that are in Seller's possession;
(vi) Hazardous Wastes. Except as set forth on Exhibit "I"
---------------- -----------
or as disclosed in the phase I and phase II environmental assessments
prepared on behalf of Buyer, to Seller's actual knowledge: (1) the
Property or any portion thereof is not in violation of any
Environmental Law (as hereinafter defined); (2) neither Seller, any
Partnership nor any third party has used, generated, manufactured,
stored or disposed of on, under or about the Property or transported
to or from the Property any Hazardous Material in violation of any
Environmental Law; and (3) there is no asbestos (in any form) or
asbestos containing materials in any of the Improvements. For purposes
of this subparagraph, the term "Hazardous Material" shall mean any
substance, chemical, waste product or other material which is listed,
defined, or otherwise identified as "hazardous" or "toxic" or as a
"hazardous material" under any federal, state, local or administrative
agency ordinance or law, including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act,
42 U.S.C. (S)(S) 9601 et seq.; Resource Conservation and Recovery Act,
-- ---
42 U.S.C. (S)(S) 6901 et seq.; Federal Water Pollution Control Act, 33
-- ---
U.S.C. (S)(S) 1251 et seq.; Clean Air Act, 42 U.S.C. (S)(S) 7401 et
-- --- --
seq.; Hazardous Materials Transportation Act, 49 U.S.C. (S)(S) 1471 et
--- --
seq.; Toxic Substances Control Act, 15 U.S.C. (S)(S) 2601 et seq.;
--- -- ---
Refuse Act, 33 U.S.C. (S)(S) 407 et seq.; Emergency Planning and
-- ---
Community Xxxxx-Xx-Xxxx Xxx, 00 X.X.X. (X)(X) 00000 et seq.;
-- ---
Occupational Safety and Health Act, 29 U.S.C. (S)(S) 65 et seq., to
-- ---
the extent it includes the emission of any Hazardous Material and
includes any Hazardous Material for which hazard communication
standards have been established; California Hazardous Substance
Account Act, California Health & Safety Code (S)(S) 25300 et seq.;
-- ---
California Asbestos Notification Laws, California Health & Safety Code
(S)(S) 25915 et seq.; California Hazardous Waste Control Law,
-- ---
California Health & Safety Code (S)(S) 22100 et seq.; California
-- ---
Hazardous Materials Release Response Plans and Inventory Act,
-28-
California Health & Safety Code (S)(S) 25500 et seq., California Clean
-- ---
Air Act, California Health & Safety Code (S)(S) 39608 et seq.;
-- ---
California Toxic Pits Cleanup Act, California Health & Safety Code
(S)(S) 25208 et seq.; California Pipeline Safety Act, California
-- ---
Government Code (S)(S) 51010 et seq.; California Toxic Air
-- ---
Contaminants Law, California Health & Safe Code (S)(S) 39650 et seq.;
-- ---
California Xxxxxx-Cologne Water Quality Act, California Water Code
(S)(S) 13000 et seq.; California Toxic Injection Well Control Act,
-- ---
California Health & Safety Code (S)(S) 25159.10 et seq.; California
-- ---
Underground Storage Tank Act, California Health & Safety Code (S)(S)
25280 et seq.; California Occupational Carcinogens Control Act,
-- ---
California Labor Code (S)(S) 9000 et seq.; or any regulation, order,
-- ---
rule or requirement adopted thereunder; as well as any formaldehyde,
urea, polychlorinated biphenyls, petroleum, petroleum product or by-
product, crude oil, natural gas, natural gas liquids, liquefied
natural gas or synthetic gas usable for fuel or mixture thereof,
radon, asbestos and "source," "special nuclear" and "by-product"
material as defined in the Atomic Energy Act of 1985, 42 U.S.C. (S)(S)
3011 et seq. For purposes of this Agreement, the term "Environmental
-- ---
Laws" shall mean the statutes and ordinances set forth above and any
and all other federal, state or local law, ordinance or regulation
relating to industrial hygiene or to environmental conditions or
hazardous conditions.
(vii) Taxes. Seller has no actual knowledge, and Seller
-----
and the Partnerships have received no notice to the contrary, of any
special assessments or charges which have been levied against the
Property or which will result from work, activities or improvements
done to or for the benefit of the Property except as may be shown on
the Title Report. Seller has no actual knowledge, and Seller and the
Partnerships have received no notice to the contrary, of any intended
public improvements which will result in any charge being levied
against, or in the creation of any lien upon, the Property or any
portion thereof;
(viii) Roofs; Utilities; Building Systems. Except as
----------------------------------
expressly set forth in the reports prepared for Buyer by Building
Analytics which are further identified on Exhibit "K", Seller has no
-----------
actual knowledge that the roofs of the Improvements or any of the
utility facilities or the heating, air conditioning, plumbing or
ventilating systems serving the Property are inadequate or are not in
good operating condition nor that any of the same have been inadequate
or failed to be in good operating condition within the two (2) years
immediately preceding the Opening of Escrow;
(ix) Structural. Except as expressly set forth in the
----------
reports prepared for Buyer by Building Analytics which are further
identified on Exhibit "K", to Seller's actual knowledge, there are no
-----------
material defects or deficiencies in the integrity or condition of the
structural components of the Real Property;
(x) Leases. The Rent Roll for each Property attached hereto
------
as Exhibit "J" is a copy of the rent roll used by Seller and the
-----------
applicable Partnership
-29-
in the ordinary course of its business. To Seller's actual knowledge,
(1) each Rent Roll is true, accurate and complete and (2) the copies
of the Leases delivered to Buyer are true, correct and complete copies
of the Leases. The Leases are in full force and effect, without
default by any party and without any right of setoff, except as
expressly provided by the terms of the Leases or as disclosed to Buyer
in writing in an Estoppel Certificate or otherwise. As of the Close of
Escrow, all work to be performed by Seller and/or the applicable
Partnership pursuant to the Leases shall have been fully or
substantially completed, paid for and accepted by the respective
Tenants and all tenant improvement allowances and similar obligations
have been paid in full except as expressly set forth on Exhibit "U".
-----------
Except as indicated on Exhibit "U", to Seller's actual knowledge, no
-----------
leasing or other commissions or fees are due, or will become due, on
an absolute or contingent basis to any real estate brokers or agents
or anyone else in connection with the Real Property or any portion
thereof and no such commissions or fees will become due during the
term of any existing Lease or with respect to any renewal or extension
thereof or the leasing of additional space by any existing Tenant;
(xi) No Undisclosed Liabilities. The Xxxxxx Entities hereby
--------------------------
represent and warrant and the NNC Entities represent and warrant that
the Xxxxxx Partnership Interests and the NNC Interests, respectively,
are not subject to, or affected by any liabilities, obligations or
commitments of any nature (whether accrued, absolute, contingent or
otherwise and whether matured or unmatured) except for (1) liabilities
or obligations reflected in the Leases and; (2) liabilities or
obligations identified on Exhibit "K".
-----------
(xii) Taxes. The NNC Entities, but not the Xxxxxx
-----
Entities, hereby represent and warrant that the Partnerships have
filed or caused to be filed on a timely basis, since inception, all
Tax Returns (as hereinafter defined) that are or were required to be
filed by it or with respect to it or its businesses, either separately
or as a member of a group, pursuant to all applicable federal, state,
local or other administrative order, constitution, law, ordinance,
regulation or statue (collectively, "Legal Requirements"). The
Partners have paid, or made provision for the payment of, all taxes
that have or may have become due pursuant to those Tax Returns or
otherwise, or pursuant to any assessment received by the Partnerships.
The information contained in such Tax Returns is true and correct in
all material respects. Sellers shall be responsible, at Seller's sole
cost and expense, for filing or causing to be filed all Tax Returns
for the Partnerships for periods beginning prior to the Closing Date,
including but not limited to all returns required for the calendar
year 1998 prior to, or in connection with, the dissolution of the
Partnerships and for all other costs and expenses of the Partnerships
for calendar year 1998, including but not limited to franchise taxes.
For the purposes of this Agreement, a Tax Return means any return
(including any information return), report statement, schedule,
notice, form, or other document or information filed with or submitted
to, or required to be filed with or submitted to, any governmental
body in connection with the determination, assessment,
-30-
collection, or payment of any tax or in connection with the
administration, implementation, or enforcement of or compliance with
any Legal Requirement relating to any tax.
(xiii) Tax Allocations: Code Section 704(c). In
-------------------------------------
accordance with Section 704(c) of the Internal Revenue Code of 1986,
as amended ("Code") and the Regulations thereunder, income, gain,
loss, and deduction with respect to any Partnership Property
contributed to the capital of the Operating Partnership shall, solely
for tax purposes, be allocated among the partners of each Partnership
so as to take account of any variation between the adjusted basis of
such Partnership Property to the Operating Partnership for federal
income tax purposes and its allocable share of the Purchase Price
following dissolution of the applicable Partnership. Allocations
pursuant to this Paragraph 14(a)(xiii) are solely for purposes of
federal, state, and local taxes and shall not affect, or in any way be
taken into account in computing, any Partner's capital account or
share of profits, losses, other items, or distributions pursuant to
any provision of this Agreement. The allocations provided for in this
Paragraph 14(a)(xiii) shall be made pursuant to the traditional method
as set forth in the applicable Treasury regulations promulgated under
Section 704(c) of the Code.
(xiv) Ownership of Xxxxxx Partnership Interests and the NNC
-----------------------------------------------------
Interests. The Xxxxxx Entities and the NNC Entities each hereby
---------
represent and warrant as to their respective interests: (i) that each
of them is respectively, the record and beneficial owner of the Xxxxxx
Partnership Interests and the NNC Interests, (ii) that each of them
has good and marketable title to the respective Xxxxxx Partnership
Interests and the NNC Interests, and (iii) that each of them has the
absolute right, power and authority to sell, transfer and deliver
their respective Xxxxxx Partnership Interests and the NNC Interests to
Buyer, free and clear of all liens and encumbrances; (iv) that there
are no options, warrants, rights of first refusal, puts, calls,
commitments or other claims of ownership of any nature or any
character whatsoever relating to the Xxxxxx Partnership Interests and
the NNC Interests, except for certain rights of first refusal
contained within the partnership agreements of certain Partnerships
all of which have been waived by the respective holder thereof and
which shall have no force or effect as of the Close of Escrow; and (v)
that no notice to, declaration, filing or registration with, or
authorization, consent or approval of, or permit from, any domestic or
foreign governmental or regulatory body or authority, or any other
person or entity, is necessary in connection with the execution and
delivery of this Agreement by Seller and the respective partners or
members and the consummation by Seller and the respective partners or
members of the transactions contemplated by this Agreement.
(xv) No Conflict or Violation. The Xxxxxx Entities and the
------------------------
NNC Entities, each as to their respective interests, represent and
warrant that neither the execution and delivery of this Agreement by
Seller, nor the consummation by Seller of the transactions
contemplated hereby, nor compliance by Seller with any
-31-
of the provisions hereof will (i) violate, conflict with, or result in
a breach of any provisions of, or constitute a material default (or an
event which, with notice or lapse of time or both, would constitute a
material default) under, or result in the termination of, or
accelerate the performance required by, or result in a right of
termination or acceleration under, or result in the creation of any
encumbrance upon the Xxxxxx Partnership Interests or the NNC Interests
under, any of the terms, conditions or provisions of any agreement to
which Seller or the Partnerships are a party except for certain
indebtedness that will be repaid by Seller upon the Close of Escrow or
(ii) violate any judgment, ruling, order, writ, injunction, decree,
statute, rule or regulation applicable to Seller, or the Xxxxxx
Partnership Interests, the NNC Interests or any of the Properties.
(xvi) Status of Seller and Unit Recipients. None of the
------------------------------------
Sellers is a "foreign person" as defined in Section 1445 of the
Internal Revenue Code of 1986, as amended. Each of the Unit
Recipients is a resident of the State of California.
(xvii) Single Purpose Entities. Each Partnership is a
-----------------------
single purpose entity formed solely for the purpose of owning and
operating the Property owned by it and owns no other assets other than
the Property identified in this Agreement.
(xviii) Partnership Agreements and Financial Statements.
-----------------------------------------------
The NNC Entities have delivered to Buyer true, accurate and complete
copies of all of the organizational documents of each Partnership
which are identified in Exhibit "K" attached hereto. To Seller's
-----------
actual knowledge, the financial information of each Partnership
delivered to Buyer fairly and accurately present in all material
respects the assets, liabilities and financial position of each
Partnership as of the date thereof.
(xix) Ownership Interests. The ownership interests of the
-------------------
various Sellers set forth in Recital "A" to this Agreement are
accurate in all respects, and each of the Partnerships is the sole
holder of fee simple title to the respective Real Property identified
on Exhibit "A" as being owned by such Partnership.
-----------
(xx) Employees. The Partnerships have no employees and have
---------
never had any employees.
(xxi) Representations and Warranties at Closing. Subject
-----------------------------------------
to Seller's right to deliver its notice to Buyer of a Materially
Changed Condition as set forth in Paragraph 13(a)(vii) above, the
representations and warranties of Seller set forth in this Agreement
shall be deemed to be remade and restated by Seller in a certificate
on and as of the Close of Escrow.
-32-
As used herein, the term "Seller's actual knowledge" shall mean
the current actual knowledge of Xxxxx Xxxxxxxx, Xxxxxx Xxxxxxxx, and
Xxxxxxx Xxxxxxx, without any inquiry. Seller represents and warrants that
Xxxxxx Xxxxxxxx is the representative of Seller with principal
administrative and oversight responsibility for the Property and the
Partnerships. The parties agree that (i) Seller's warranties and
representations contained in Paragraphs 14(a)(ii) through 14(a)(x) of this
Agreement shall survive Buyer's purchase of the Property only for a period
of one (1) year) after each respective Close of Escrow (the "Limitation
Period"), and (ii) Buyer shall provide actual written notice to Seller of
any alleged breach of such warranties or representations and shall allow
Seller thirty (30) days within which to cure such alleged breach, or, if
such alleged breach cannot reasonably be cured within thirty (30) days, an
additional reasonable time period, so long as such cure has been commenced
within such thirty (30) days and diligently pursued. In no event is Seller
obligated to cure any alleged breach. If Seller fails or elects not to
cure such alleged breach after actual written notice and within such cure
period, Buyer's sole and exclusive remedy shall be an action at law for
damages, but in no event lost profits or punitive damages, 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
alleged breach and Seller commenced to cure and thereafter terminates such
cure effort, Buyer shall have an additional sixty (60) days from the date
that Seller notifies Buyer in writing that Seller has terminated its cure
effort within which to commence such an action.
Seller's representations and warranties set forth in Paragraph
14(a)(i) and 14(a)(xi) through 14(a)(xx) shall survive the Close of Escrow
and the recording of the Grant Deed without limitation to the extent that
Buyer incurs or is subject to any Damages (as hereinafter defined) because
Buyer acquired the Xxxxxx Partnership Interests or the NNC Interests which
would not have been incurred had Buyer directly acquired title to the Real
Property
(b) By Buyer. In consideration of Seller entering into this
--------
Agreement and as an inducement to Seller to sell the Property, and the
interests in the Partnerships, Buyer (and Company and OP General Partner,
by their joinder herein, solely as to the representations and warranties
relating to Company, OP General Partner and their respective operations)
makes the following representations and warranties, each of which is
material and is being relied upon by Seller (and the continued truth and
accuracy of which shall constitute a condition precedent to Seller's
obligations hereunder):
(i) Representations Regarding Buyer's Authority.
-------------------------------------------
(A) Buyer has the legal power, right and authority to
enter into this Agreement and the instruments referenced herein,
and to consummate the transaction contemplated hereby;
(B) All requisite action (corporate, trust, partnership
or otherwise) has been taken by Buyer in connection with the
entering into this Agreement, the instruments referenced herein,
and the consummation
-33-
of the transaction contemplated hereby. No consent of any
partner, shareholder, trustee, trustor, beneficiary, creditor,
investor, judicial or administrative body, governmental authority
or other party is required; and
(C) The individuals executing this Agreement and the
instruments referenced herein on behalf of Buyer and the partners
of Buyer, if any, have the legal power, right, and actual
authority to bind Buyer to the terms and conditions hereof and
thereof.
(ii) AS-IS. Except as expressly set forth in the Agreement,
-----
Buyer is acquiring the Property "AS IS" without any representation or
warranty of Seller, express, implied or statutory, as to the nature or
condition of or title to the Property or its fitness for Buyer's
intended use of same. Except as specifically set forth in this
Agreement, Buyer represents and warrants that it (i) is relying solely
upon its own inspections, investigations and analyses of the Property,
the Title Documents, Documents and Materials, and the Plans and
Reports (collectively, the "Property Documents") in entering into this
Agreement and consummating the transaction set forth herein, and (ii)
is not relying in any way upon any representations, statements,
agreements, warranties, studies, reports, descriptions, guidelines or
other information or material furnished by Seller or its
representatives whether oral or written, express or implied, of any
nature whatsoever regarding any such matters, including, without
limitation, the condition, value, nature, or quality of the Property,
including any constriction on the Property and any materials or
systems incorporated into the Property and seismic conditions or
topography, any income to be derived from the Property, compliance of
the Property or its operation with any law, ordinance, rule,
regulation, or the status of any permits or approvals relating to or
required in connection with the Property, latent defects in the
Property or improvements thereto, safety or building violations or
deficiencies in the Property or improvements thereto, if any, or any
other matter of a similar or dissimilar nature which may be of
relevance to Buyer and relating in any way to the Property or the
market in which it is located. Except as specifically set forth in
this Agreement, Buyer agrees and warrants to Seller that neither
Seller, nor any broker, nor any agent or representative of either of
them, has made any representation to Buyer inconsistent with the
foregoing nor as to any Hazardous Materials Laws, the existence of
Hazardous Materials on the Property or the Property Documents. Except
as specifically set forth in this Agreement, Seller is not making any
representation or warranty of any nature concerning the accuracy or
completeness of Seller's files or concerning the authenticity, source,
accuracy or completeness of the Property Documents. As to certain of
the materials made available to Buyer from Seller's files, including,
without limitation, the Property Documents, Buyer specifically
acknowledges that they may have been prepared by third parties with
whom Seller has no privity and Buyer acknowledges and agrees that
except as specifically set forth herein, no warranty or
representation, express or implied, has been made, nor shall any be
deemed to have been made, to Buyer either by Seller or by any third
parties that prepared the materials in question. Buyer waives any
-34-
claim of any nature against Seller for any information, conclusion,
projection or other statement of any nature contained in any of the
Property Documents if the same should prove not to be true, complete
or accurate for any reason. Buyer, by its execution of this Agreement,
acknowledges and agrees that a material inducement to Seller's
decision to sell the Property to Buyer at the Purchase Price provided
in this Agreement was Buyer's agreement to conduct its own feasibility
studies and purchase the Property in an "as-is" condition. Except as
relating to any matter covered by the terms of Paragraph 13(a)(xv)
hereof or relating to a breach of the representations and warranties
made by Seller, (A) no latent condition affecting the Property in any
way (including, without limitation, the presence or effects of any
Hazardous Materials or any violations of applicable law on the
Property), discovered after the Close of Escrow (collectively,
"Property Conditions"), shall give rise to any rights of damages,
specific performance, rescission or other claims by Buyer against
Seller, and (B) Buyer hereby assumes the risk of any and all
liabilities, claims, demands, suits, judgments, losses, damages,
expenses (including, without limitation, attorneys' fees and costs)
and other obligations arising out of the Property and hereby releases,
waives, discharges, covenants not to xxx Seller based solely upon the
same.
(iii) Securities Filings. Each of the Company and the
------------------
Operating Partnership has filed all required documents with the
Securities and Exchange Commission ("SEC") since January 1, 1997
including, without limitation, the Annual Report on Form 10-K for the
year ended December 31, 1996 of the Company and the Operating
Partnership (collectively, the "SEC Documents"). To the knowledge of
the Company and Operating Partnership (defined and limited for
purposes of Paragraphs 14(b)(iii) and (iv) as information contained in
any actual notice received by Company or the Operating Partnership or
information within the actual knowledge of Xxxxxxx X. Xxxxxxxx, Xxxxxx
X. August, Xxxx Xxxxx and Xxxx Xxxxxx, (i) as of their respective
dates, the SEC Documents complied in all material respects with the
requirements of the Securities Act or Exchange Act, as the case may
be, and, at the respective times they were filed, none of the SEC
Documents contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which
they were made, not misleading, (ii) the consolidated financial
statements (including any notes thereto) of the Company included in
the SEC Documents complied as to form in all material respects with
applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto, were prepared in
accordance with generally accepted accounting principles (except, in
the case of the unaudited statements, as permitted by Form 10-Q of the
SEC) applied on a consistent basis during the periods involved (except
as may be indicated therein or in the notes thereto) and fairly
presented in all material respects the consolidated financial position
of the Company as at the respective dates thereof and the consolidated
results of their operations and their consolidated cash flows for the
periods then ended (subject, in the case of unaudited statements, to
normal year-end audit
-35-
adjustments and to any other adjustments described therein), and (iii)
except as disclosed in the SEC Documents or as required by generally
accepted accounting principles, the Company has not, since September
30, 1997, made any material change in the accounting practices or
policies applied in the preparation of financial statements.
(iv) Absence of Certain Changes or Events. To the knowledge
------------------------------------
of Operating Partnership and Company, except as disclosed in SEC
Documents filed with the SEC prior to the date of this Agreement,
since September 30, 1997, (a) neither the Company nor the Operating
Partnership has sustained any loss or interference with its business
or properties from fire, flood, windstorm, accident or other calamity
(whether or not covered by insurance) that has had a material adverse
effect on the Company or the Operating Partnership, and (b) there has
been no event causing a material adverse effect on the Company or the
Operating Partnership, excluding any changes and effects resulting
from changes in economic, regulatory or political conditions or
changes in conditions generally applicable to the industry in which
the Company or the Operating Partnership is involved. The
representations and warranties of Buyer, the Company and the OP
General Partner set forth in this Agreement and in any document
executed by such parties pursuant to this Agreement shall survive
Buyer's purchase of the Property only for the Limitation Period.
Seller shall provide actual written notice to Buyer of any alleged
breach of such warranties or representations and shall allow Buyer
thirty (30) days within which to cure such alleged breach, or, if such
alleged breach cannot reasonably be cured within thirty (30) days, an
additional reasonable time period, so long as such cure has been
commenced within such thirty (30) days and diligently pursued. In no
event is Buyer obligated to cure any alleged breach. If Buyer fails
or elects not to cure such alleged breach after actual written notice
and within such cure period, Seller's sole and exclusive remedy shall
be an action at law for damages, but in no event lost profits or
punitive damages, which must be commenced, if at all, within the
Limitation Period; provided, however, that if within the Limitation
Period Seller gives Buyer written notice of such alleged breach and
Buyer commenced to cure and thereafter terminates such cure effort,
Seller shall have an additional sixty (60) days from the date that
Buyer notifies Seller in writing that Buyer has terminated its cure
effort within which to commence such an action.
(c) Indemnification.
---------------
(i) Seller's Indemnification. Notwithstanding anything in
------------------------
this Agreement to the contrary and without limiting either parties'
rights under this Agreement, the NNC Entities and the Xxxxxx Entities
respectively hereby agree to indemnify, defend, protect and hold
harmless Buyer and Buyer's Indemnitees (as defined in Paragraph
13(a)(xv) hereof) from and against any and all costs, losses,
liabilities, damages, lawsuits, deficiencies, claims and expenses,
including without limitation, interest, penalties, reasonable
attorneys' fees and all amounts paid in investigation, defense or
settlement of any of the foregoing (collectively,
-36-
"Damages"), incurred in connection with, arising out of, resulting
-------
from or incident to (i) any breach of any covenant or warranty, or the
inaccuracy of any representation, made by the NNC Entities or the
Xxxxxx Entities respectively in or pursuant to this Agreement as to
their respective representations, covenants or warranties, or (ii) any
claim by any person or entity initiated against Buyer arising from the
actions or inaction's of Seller, or any Partnership, prior to the
Close of Escrow.
(ii) Buyer's Indemnification of Seller. Notwithstanding
---------------------------------
anything in this Agreement to the contrary, Buyer shall indemnify,
defend, protect and hold harmless, each Seller and the directors,
officers, employees, members, shareholders and agents of NNC from and
against any and all Damages incurred in connection with, arising out
of, resulting from or incident to any breach of any covenant or
warranty, or the inaccuracy of any representation, made by Buyer in or
pursuant to this Agreement.
(iii) Initiation of Claims. If any party ("Indemnitee")
-------------------- ----------
hereto desires to make a claim against any other party ("Indemnitor")
----------
pursuant to the provisions of this Paragraph 14(c), then Indemnitee
shall notify Indemnitor of the claim, demand, action or right of
action which is the basis of such claim and the provision or
provisions of this Agreement alleged
to have been breached or to be inaccurate, and shall give the
Indemnitor a reasonable opportunity to participate in the defense
thereof. Indemnitee shall provide Indemnitor with all information
available to it regarding such claim, demand, action or right of
action (whether or not it involves a third party).
(iv) Survival of Indemnification Provisions. The
--------------------------------------
indemnification provision set forth in this Paragraph 14(c) shall
survive the Close of Escrow regardless of any investigation made by
any of the parties hereto; provided, however, that the parties'
respective indemnification obligations arising out of any breach of
any covenant or warranty, or the inaccuracy of any representation,
made by a party in or pursuant to this Agreement shall survive only
with respect to claims made against the Indemnitor within the period
that the underlying covenant, warranty or representation survives
pursuant to this Agreement.
15. Remedies.
--------
(a) LIQUIDATED DAMAGES. SUBJECT TO BUYER'S RIGHT TO HAVE THE
------------------
DEPOSIT RETURNED AS SET FORTH IN PARAGRAPH 3(a) OF THIS AGREEMENT, IF THE
CLOSE OF ESCROW FAILS TO OCCUR FOR ANY REASON OTHER THAN SELLER'S DEFAULT
HEREUNDER, THEN ESCROW HOLDER MAY BE INSTRUCTED BY SELLER TO CANCEL THE
ESCROW AND SELLER SHALL THEREUPON BE RELEASED FROM ITS OBLIGATIONS
HEREUNDER. BUYER AND SELLER AGREE THAT BASED UPON THE CIRCUMSTANCES NOW
EXISTING, KNOWN AND UNKNOWN, IT WOULD BE
-37-
IMPRACTICAL OR EXTREMELY DIFFICULT TO ESTABLISH SELLER'S DAMAGE BY REASON
OF THE FAILURE OF ESCROW TO CLOSE AS AFORESAID. ACCORDINGLY, BUYER AND
SELLER AGREE THAT IT WOULD BE REASONABLE AT SUCH TIME TO AWARD SELLER
"LIQUIDATED DAMAGES" IN THE AMOUNT OF THE DEPOSIT AND OWNERSHIP AND
POSSESSION OF THE PLANS AND REPORTS PURSUANT TO PARAGRAPH 24 BELOW.
SELLER AND BUYER ACKNOWLEDGE AND AGREE THAT THE FOREGOING AMOUNT
AND THE PLANS AND REPORTS ARE REASONABLE AS LIQUIDATED DAMAGES AND SHALL BE
SELLER'S SOLE AND EXCLUSIVE REMEDY IN LIEU OF ANY OTHER RELIEF, RIGHT OR
REMEDY, AT LAW OR IN EQUITY, TO WHICH SELLER MIGHT OTHERWISE BE ENTITLED BY
REASON OF THE FAILURE OF ESCROW TO CLOSE UNDER THIS AGREEMENT.
ACCORDINGLY, SUBJECT TO PARAGRAPH 3(a) OF THIS AGREEMENT, IF THE CLOSE OF
ESCROW FAILS TO OCCUR FOR ANY REASON OTHER THAN SELLER'S DEFAULT, SELLER
MAY INSTRUCT THE ESCROW HOLDER TO CANCEL THE ESCROW, WHEREUPON SELLER SHALL
BE RELIEVED FROM ALL LIABILITY HEREUNDER, AND, PROMPTLY FOLLOWING ESCROW
HOLDER'S RECEIPT OF SUCH INSTRUCTION, ESCROW HOLDER SHALL (i) CANCEL THE
ESCROW, AND (ii) DISBURSE TO SELLER THE DEPOSIT. WITHOUT LIMITING THE
FOREGOING PROVISIONS OF THIS PARAGRAPH, SELLER WAIVES ANY AND ALL RIGHTS
WHICH SELLER OTHERWISE WOULD HAVE HAD UNDER CALIFORNIA CIVIL CODE SECTION
3389, OR OTHERWISE, TO SPECIFICALLY ENFORCE THIS AGREEMENT. NOTWITHSTANDING
ANYTHING TO THE CONTRARY SET FORTH HEREIN, IN NO EVENT SHALL BUYER'S
OBLIGATION TO INDEMNIFY SELLER PURSUANT TO PARAGRAPH 7(a)(iii) ABOVE BE
LIMITED IN ANY MANNER. SELLER AND BUYER ACKNOWLEDGE THAT THEY HAVE READ AND
UNDERSTAND THE PROVISIONS OF THIS PARAGRAPH 15 AND BY THEIR INITIALS
IMMEDIATELY BELOW AGREE TO BE BOUND BY ITS TERMS.
-38-
-------------------------------- ------------------------------
Seller's Initials Buyer's Initials
--------------------------------
Seller's Initials
--------------------------------
Seller's Initials
--------------------------------
Seller's Initials
--------------------------------
Seller's Initials
--------------------------------
Seller's Initials
--------------------------------
Seller's Initials
--------------------------------
Seller's Initials
--------------------------------
Seller's Initials
--------------------------------
Seller's Initials
--------------------------------
Seller's Initials
(b) Buyer's Remedies. Buyer and Seller hereby agree that, if the
----------------
sale contemplated by this Agreement is not completed as herein provided by
reason of any default of Seller hereunder, then in addition to the return
of the Deposit and the right to retain the Plans and Reports, Buyer shall
be entitled to pursue any remedy available under this Agreement or
available at law or in equity, including, without limitation, the right to
specifically enforce this Agreement.
16. Damage or Condemnation Prior to Closing.
---------------------------------------
(a) Material Damage. In the event that prior to the Close of
---------------
Escrow, the Real Property, or a material portion thereof, is destroyed or
materially damaged, Buyer shall have the right, exercisable by giving
written notice to Seller within five (5) days after receipt of written
notice of such damage or destruction, either (i) to terminate
-39-
this Agreement, in which event the Deposit and all interest accrued thereon
shall be immediately returned to Buyer, any other money or documents in
Escrow shall be returned to the party depositing the same, and neither
party hereto shall have any further rights or obligations hereunder, or
(ii) to accept the Real Property or the Partnerships interests in their
then condition and to proceed with the consummation of the transaction
contemplated by this Agreement with an abatement or reduction in the
Purchase Price equal to the amount of the deductible for the applicable
insurance coverage, and to receive an assignment of all of Seller's rights
to any insurance proceeds payable by reason of such damage or destruction.
If Buyer elects to proceed under clause (ii) above, Seller shall not
compromise, settle or adjust any claims to such proceeds without Buyer's
prior written consent, which consent may be withheld in Buyer's sole and
absolute discretion. For purposes of this Paragraph 16 destruction or
damage of a "material portion" of the Real Property shall mean that the
cost to correct such damage or destruction (for all of the Real Property)
may exceed $2,169,000, as determined by Buyer and Seller in their
reasonable discretion.
(b) Non-Material Damage. In the event that prior to the Close of
-------------------
Escrow there is any non-material damage to the Real Property, or any part
thereof, Buyer shall accept the Real Property or the Partnership interests
in its their condition with an abatement or reduction in the Purchase Price
equal to the amount of the deductible for the applicable insurance coverage
and proceed with the transaction contemplated by this Agreement, in which
event Buyer shall be entitled to an assignment of all of Seller's rights to
any insurance proceeds payable by reason of such damage or destruction.
Seller shall not compromise, settle or adjust any claims to such proceeds
without Buyer's prior written consent, which consent may be withheld in
Buyer's sole and absolute discretion.
(c) Material Condemnation. In the event that prior to the Close
---------------------
of Escrow, all or any material portion of the Real Property is subject to a
taking by a public or governmental authority, Buyer shall have the right,
exercisable by giving written notice to Seller within two (2) days after
receiving written notice of such taking, either (i) to terminate this
Agreement, in which event the Deposit and all interest accrued thereon
shall be immediately returned to Buyer, any other money or documents in
Escrow shall be returned to the party depositing the same, and neither
party hereto shall have any further rights or obligations hereunder, or
(ii) to accept the Real Property or the Partnership Interests in their
then condition, without a reduction in the Purchase Price, and to receive
an assignment of all of Seller's rights to any condemnation award or
proceeds payable by reason of such taking. If Buyer elects to proceed
under clause (ii) above, Seller shall not compromise, settle or adjust any
claims to such award without Buyer's prior written consent, which consent
may be withheld in Buyer's sole and absolute discretion. For the purposes
of this Paragraph 16, a taking, as set forth herein, shall be deemed to be
of a "material portion" of the Real Property if the value of the affected
Real Property, or the decrease in the value of the remaining Real Property
(for all of the Real Property), is in excess of $2,169,000 as determined by
Buyer and Seller in their reasonable discretion.
(d) Non-Material Condemnation. In the event that prior to the
-------------------------
Close of Escrow, any non-material portion of the Real Property is subject
to a taking by any
-40-
public or governmental authority, Buyer shall accept the Real Property in
its then condition and proceed with the consummation of the transaction
contemplated by this Agreement, in which event Buyer shall be entitled to
an assignment of all of Seller's rights to any award or proceeds payable in
connection with such taking. In the event of any such non-material taking,
Seller shall not compromise, settle or adjust any claims to such award
without Buyer's prior written consent, which consent may be withheld in
Buyer's sole and absolute discretion.
17. Notices. All notices or other communications required or permitted
-------
hereunder shall be in writing, and shall be either (a) personally delivered, (b)
sent by overnight mail for next business day delivery (Federal Express or the
like), (c) sent by registered or certified mail, postage prepaid, return receipt
requested, or (d) sent by fax; and shall be deemed received upon the earlier of
(i) if personally delivered on a business day, the date of delivery to the
address of the person to receive such notice, (ii) if sent by overnight mail for
next business day delivery, the business day following its deposit in such
overnight mail facility, (iii) if mailed, two (2) business days after the date
of posting by the United States post office, or (iv) if given by fax on a
business day, the next business day when sent with confirmation of receipt. Any
notice, request, demand, direction or other communication sent by fax must be
confirmed within forty-eight (48) hours by letter mailed or delivered in
accordance with the foregoing.
To Buyer: Xxxxxxxx Properties Acquisition Partners, L.P.
000 Xxxx 000xx
Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Xx. Xxxxx X. Xxxxxxxxx
Phone No. (000) 000-0000
Fax No. (000) 000-0000
With a copy to: Allen, Matkins, Xxxx, Xxxxxx & Xxxxxxx LLP
00000 Xxx Xxxxxx, Xxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxx X. XxXxxxxxxxx, Esq.
Phone No. (000) 000-0000
Fax No. (000) 000-0000
To Seller: c/o Newport National Corporation
0000 Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Xx. Xxxxx Xxxxxxxx
Phone No. (000) 000-0000
Fax No. (000) 000-0000
-41-
With a copy to: Xxxx, Forward, Xxxxxxxx & Scripps LLP
000 X. Xxxxxxxx, 00xx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx, Esq.
Phone No. (000) 000-0000
Fax No. (000) 000-0000
To Seller: Xxxxxx X. Xxxxxx
X.X. Xxx 000
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
Fax No. (000) 000-0000
With a copy to: Stradling, Yocca, Xxxxxxx and Xxxxx
000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Phone No. (000) 000-0000
Fax No. (000) 000-0000
With a copy to: Xx. Xxxxxxx Xxxxx
0000 Xx Xxxxx Xxxxxx Xxxxx Xxxxx
Xx Xxxxx, Xxxxxxxxxx 00000
Phone No. (000) 000-0000
Fax No. (000) 000-0000
To Escrow Holder: Chicago Title Insurance Company
0000 XXX Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000-0000
Attention: Xxxxxx Xxxxxxx
Phone No. (000) 000-0000
Fax No. (000) 000-0000
Notice of change of address shall be given by written notice in the manner
detailed in this Paragraph. Rejection or other refusal to accept or the
inability to deliver because of changed address of which no notice was given
shall be deemed to constitute receipt of the notice, demand, request or
communication sent.
18. Brokers. Seller and Buyer represent to each other that no broker or
-------
other agent was involved in the transaction contemplated by this Agreement;
provided, however, if any broker commission, finder's fee or other payment is
due in connection with Property No. 2, to NNC the Xxxxxx Entities shall be
responsible for the same. If any other claims for broker's or finders' fees or
commissions for the consummation of this Agreement arise, then Buyer hereby
agrees to indemnify, protect, save harmless and defend Seller from and against
such claims if they are based upon any statement, representation or agreement
made by Buyer, and Seller hereby agrees to indemnify, protect, save harmless and
defend Buyer from and against such claims if they are based upon any statement,
representation or agreement made by Seller.
-42-
19. Legal Fees. 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 or agreements or any inaccuracies in any of the representations
and warranties on the part of the other party arising out of this Agreement,
then in that event, the prevailing party in such action or dispute, whether by
final judgment or out of court settlement, shall be entitled to have and recover
of and from the other party all costs and expenses of suit, including reasonable
attorneys' fees. Any judgment or order entered in any final judgment shall
contain a specific provision providing for the recovery of all costs and
expenses of suit, including reasonable attorneys' fees (collectively "Costs")
incurred in enforcing, perfecting and executing such judgment. For the purposes
of this paragraph, Costs shall include, without limitation, reasonable
attorneys' fees, costs and expenses incurred in (i) post-judgment motions, (ii)
contempt proceeding, (iii) garnishment, levy, and debtor and third party
examination, (iv) discovery, and (v) bankruptcy litigation.
20. Assignment. Seller may assign, transfer or convey its rights or
----------
obligations under this Agreement, provided that its assignee assumes in writing
the obligations of Seller hereunder including, the obligation to distribute
Units to each Unit Recipient. Buyer, without being relieved of liability
hereunder and without obtaining Seller's consent, shall have the right to assign
its rights and obligations hereunder to any affiliate of Buyer. In addition,
Buyer, without being relieved of liability hereunder, and without obtaining
Seller's consent, shall have the right to assign its rights and obligations
hereunder in connection with Property No. 1 and Property No. 2 to any non-
affiliate of Buyer.
21. Miscellaneous.
-------------
(a) Survival of Covenants. The covenants, representations and
---------------------
warranties of both Buyer and Seller set forth in this Agreement shall
survive the recordation of the Grant Deed and the Close of Escrow.
(b) Required Actions of Buyer and Seller. Buyer and Seller agree
------------------------------------
to execute such instruments and documents and to diligently undertake such
actions as may be required in order to consummate the purchase and sale
herein contemplated and shall use their commercially reasonable efforts to
accomplish the Close of Escrow in accordance with the provisions hereof.
(c) Computation of Time Periods. If any date or time period
---------------------------
provided for in this Agreement is or ends on a Saturday, Sunday or federal,
state or legal holiday, then such date shall automatically be extended
through the next day which is not a Saturday, Sunday or federal, state or
legal holiday.
(d) Counterparts. This Agreement may be executed in multiple
------------
counterparts, each of which shall be deemed an original, but all of which,
together, shall constitute but one and the same instrument.
(e) Captions. Any captions to, or headings of, the paragraphs or
--------
subparagraphs of this Agreement are solely for the convenience of the
parties hereto, are
-43-
not a part of this Agreement, and shall not be used for the interpretation
or determination of the validity of this Agreement or any provision hereof.
(f) No Obligations to Third Parties. Except as otherwise
-------------------------------
expressly provided herein, the execution and delivery of this Agreement
shall not be deemed to confer any rights upon, nor obligate any of the
parties hereto, to any person or entity other than the parties hereto.
(g) Exhibits. The Exhibits attached hereto are hereby
--------
incorporated herein by this reference for all purposes.
(h) Amendment to this Agreement. The terms of this Agreement may
---------------------------
not be modified or amended except by an instrument in writing executed by
each of the parties hereto.
(i) Waiver. The waiver or failure to enforce any provision of
------
this Agreement shall not operate as a waiver of any future breach of any
such provision or any other provision hereof.
(j) Applicable Law. This Agreement shall be governed by and
--------------
construed in accordance with the laws of the State of California.
(k) Fees and Other Expenses. Except as otherwise provided
-----------------------
herein, each of the parties hereto shall pay its own fees and expenses in
connection with this Agreement.
(l) Entire Agreement. This Agreement supersedes any prior
----------------
agreements, negotiations and communications, oral or written, and contains
the entire agreement between Buyer and Seller as to the subject matter
hereof. No subsequent agreement, representation, or promise made by either
party hereto, or by or to an employee, officer, agent or representative of
either party hereto shall be of any effect unless it is in writing and
executed by the party to be bound thereby.
(m) Successors and Assigns. Subject to the restrictions set
----------------------
forth in Paragraph 20 hereof, this Agreement shall be binding upon and
shall inure to the benefit of the successors and assigns of the parties
hereto.
(n) Construction. The parties hereto hereby acknowledge and
------------
agree that (i) each party hereto is of equal bargaining strength, (ii) each
such party has actively participated in the drafting, preparation and
negotiation of this Agreement, (iii) each such party has consulted with
such party's own, independent counsel, and such other professional advisors
as such party has deemed appropriate, relative to any and all matters
contemplated under this Agreement, (iv) each such party and such party's
counsel and advisors have reviewed this Agreement, (v) each such party has
agreed to enter into this Agreement following such review and the rendering
of such advice, and (vi) any rule of construction to the effect that
ambiguities are to be resolved against the drafting parties
-44-
shall not apply in the interpretation of this Agreement, or any portions
hereof, or any amendments hereto.
(o) Joint and Several Liability. Each of the Sellers shall be
---------------------------
jointly and severally liable for the obligations of Sellers under this
Agreement. However, the Xxxxxx Entities shall have no liability (i) under
Paragraphs 14(a)(ii) through 14(a)(x), 14(a)(xii), (except for the
affirmative obligation to file Tax Returns set forth in Paragraph
14(a)(xii)) 14(a)(xiii) or 14(a)(xviii) hereof or (ii) for the
representations and warranties made solely by the NNC Entities.
(p) Confidentiality. Buyer and Seller acknowledge that it is in
---------------
the best interest of Buyer and Seller to maintain the confidentiality of
the terms and provisions of this Agreement and the materials relating
hereto. Except as otherwise provided herein, neither party shall disclose
any of the terms or provisions of this Agreement to any third party other
than such party's contractors, agents, and prospective and actual investors
and lenders of either party, nor shall either party issue any press
releases or make any public statements relating to this Agreement until
after the Close of Escrow except (i) to the extent required by any
applicable statute, law, regulation, governmental authority or court order,
or (ii) in connection with any arbitration or litigation that may arise
between the parties in connection with the transaction contemplated by this
Agreement.
22. Seller's Activities. Seller acknowledges that Buyer has incurred
-------------------
costs and expenses in negotiating and entering into this Agreement.
Accordingly, during the Escrow period Seller shall not conduct negotiations or
provide information regarding the Property or enter into any agreement with
respect to the sale, exchange or transfer of the Property, with any party other
than Buyer.
23. Plans and Reports. If, for any reason whatsoever, Buyer terminates
-----------------
this Agreement, Seller may elect to have Buyer assign to Seller all of Buyer'
rights, title and interests to feasibility studies, including audits prepared by
Coopers & Xxxxxxx, Buyer's financial models, analyses, economic reports,
marketing studies, maps, surveys, environmental reports, civil and soil
engineering reports, site plans, plans and specifications relating to the
Improvements on all of the Properties and any and all other plans, reports and
other documents or work relating to any and all of the Properties including but
not limited to, Latitude 33's ALTA surveys of the Property, and the physical
inspection reports and environmental reports prepared by Building Analytics
prepared by or for Buyer, including all land use and other governmental
approvals and applications therefor ("Plans and Reports"), completed to Buyer's
reasonable satisfaction, with all costs and fees relating thereto fully paid
(i.e., at no cost or expense to Seller). Seller agrees that Buyer makes no
warranty to Seller as to the accuracy of such Plans and Reports, and Seller
agrees to indemnify Buyer for all costs, expenses, claims, liabilities, losses,
damages, arising out of or in connection with Seller, its agents or successors
using or relying on the Plans and Reports if Seller elects to have Buyer assign
them to Seller. Buyer agrees to deliver any and all such Plans and Reports,
paid for in full, to Seller within three (3) days after Buyer's receipt of
Seller's written notice regarding Seller's election to have Buyer deliver the
same. Buyer agrees to execute any reasonable assignment documents prepared by
Seller within five (5) days of Seller's request.
-45-
In addition, Buyer agrees to return any and all of the Documents and Materials
to Seller within five (5) days of termination.
24. Definitions. For the purposes of this Agreement, the following
-----------
definitions shall apply:
(a) "Company" means Xxxxxxxx Properties Trust, a Maryland real
estate investment trust.
(b) "OP General Partner" means Xxxxxxxx Properties I, Inc., a
Delaware corporation.
(c) "Operating Partnership" means Xxxxxxxx Properties Acquisition
Partners, L.P., a Delaware limited partnership.
(d) "Partnership Agreement" means the Second Amended and Restated
Agreement of Limited Partnership of Xxxxxxxx Properties Acquisition
Partners, L.P. as the same may be amended from time to time.
(e) "Unit Recipient" means a Seller or a partner or member of
Seller who will receive Units pursuant to Paragraph 3 hereof.
(f) "Units" means "Seller Units" in the Operating Partnership, as
defined and described in the Operating Partnership's Partnership Agreement.
(g) "Registration Rights Agreement" means the agreement in the
form of Exhibit "P" attached hereto and incorporated herein.
-----------
25. Extension for Property No. 2. Buyer and Seller acknowledge that
----------------------------
Property No. 2 may be affected by certain Hazardous Materials (as defined in
Paragraph 14(a)(vi) hereof), and notwithstanding anything in this Agreement to
the contrary, provided that the Close of Escrow occurs for the other Properties
(not including Property No. 7) , Buyer shall have until 5:00 pm on the date
which is sixty (60) days after the Close of Escrow for the other Properties (not
including Property No. 7) to approve or disapprove, in Buyer's sole and absolute
discretion, the environmental condition of Property No. 2, including, but not
limited to, the results of any investigations, tests, or studies relating to any
Hazardous Materials affecting Property No. 2. If Buyer approves of Property No.
2 pursuant to this Paragraph 25, the Close of Escrow for Property No. 2 shall
occur as provided for in Paragraph 4(c) hereof. If Buyer disapproves of Property
No. 2 pursuant to this Paragraph 25, this Agreement shall be deemed to be
terminated as it relates to Property No. 2, and neither Buyer nor Seller shall
have any further rights or obligations under this Agreement in connection with
Property No. 2.
-46-
26. Lease Indemnities.
-----------------
(a) Sellers hereby agree to indemnify, protect, defend (with
counsel chosen by Buyer) and hold harmless Buyer from and against any and
all liability, loss, cost, damage or expense (including, without
limitation, reasonable attorneys' fees) which Buyer may incur under the
Leases and contracts affecting Property No. 3 through Property No. 11,
inclusive from any and all claims and demands whatsoever which may be
asserted against Buyer by reason of any alleged obligation or undertaking
on its part to perform or discharge any of the terms, covenants or
agreements contained therein, to the extent such claims or demands are
attributable to the period prior to the Close of Escrow.
(b) Buyer hereby agrees to indemnify, protect, defend (with
counsel chosen by Sellers) and hold Sellers harmless from and against any
and all liability, loss, damage or expense (including, without limitation,
reasonable attorneys' fees) which Sellers may incur under the Leases and
contracts affecting Property No. 3 through Property No. 11, inclusive from
any and all claims whatsoever which may be asserted against Sellers by
reason of any alleged obligation or undertaking on its part to perform or
discharge any of the terms, covenants or agreements contained therein, to
the extent such claims or demands are attributable to the period after the
Close of Escrow.
-47-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the Effective Date.
"BUYER" XXXXXXXX PROPERTIES ACQUISITION
PARTNERS, L.P., a Delaware limited partnership
By: XXXXXXXX PROPERTIES I, INC., a Delaware
corporation, its sole general partner
By: /s/ XXXXX X. XXXXXXXXX
--------------------------------------------
Name:
--------------------------------------
Title:
--------------------------------------
"SELLER" 1. SHADOWRIDGE PLAZA
XXXXXX X. XXXXXX and XXXXXXX XXXXX
XXXXXX, Co-Trustees of the X-X Xxxxxx Trust
established March 15, 1984 by Xxxxxx X. Xxxxxx
and Xxxxxxx Xxxxx Xxxxxx, Trustors, doing
business as Shadowridge Plaza
By: /s/ XXXXXX X. XXXXXX
--------------------------------------------
Xxxxxx X. Xxxxxx, Co-Trustee
By: /s/ XXXXXXX XXXXX XXXXXX
--------------------------------------------
Xxxxxxx Xxxxx Xxxxxx, Co-Trustee
-48-
2. SORIN BIOMEDICAL
/s/ XXXXXX XXXXXX XXXXXX
---------------------------------------------
Xxxxxx Xxxxxx Xxxxxx, Trustee of the Xxxxxx
Family Trust (Trust B) dated July 14, 1972,
Trustee
3. SHADOWRIDGE BUSINESS CENTER
SHADOWRIDGE BUSINESS CENTER, a
California Limited Partnership
By: Newport National Corporation, a California
Corporation, General Partner
By: /s/ XXXXX X. XXXXXXXX
----------------------------------------
Xxxxx X. Xxxxxxxx, President
By: /s/ XXXXXX X. XXXXXXXX
----------------------------------------
Xxxxxx X. Xxxxxxxx, Secretary
By: /s/ X.X. XXXXXXXX
----------------------------------------------
X.X. Xxxxxxxx, Trustee of the F.M. (Xxxxx)
Xxxxxxxx Trust, established September 17, 1985,
General Partner
By: /s/ XXXXX X. XXXXXXXX
----------------------------------------------
Xxxxx X. Xxxxxxxx, General Partner
By: /s/ XXXXXX X. XXXXXXXX
----------------------------------------------
Xxxxxx X. Xxxxxxxx, General Partner
By: /s/ XXXXXX X. XXXXXX
----------------------------------------------
Xxxxxx X. Xxxxxx, Co-Trustee of the X-X Xxxxxx
Trust, established March 15, 1984, by Xxxxxx X.
Xxxxxx and Xxxxxxx Xxxxx Xxxxxx, Trustors,
General Partner
-49-
By: /s/ XXXXXXX XXXXX XXXXXX
--------------------------------------------
Xxxxxxx Xxxxx Xxxxxx, Co-Trustee of the X-X
Xxxxxx Trust, established March 15, 1984, by
Xxxxxx X. Xxxxxx and Xxxxxxx Xxxxx Xxxxxx,
Trustors, General Partner
By: /s/ XXXXXX XXXXXX XXXXXX
---------------------------------------------
Xxxxxx Xxxxxx Xxxxxx, Trustee of the Xxxxxx
Family Trust (Trust B) dated July 14, 1972,
Limited Partner
-50-
4. XXXXXXX BUSINESS PARK
XXXXXXX WAY ASSOCIATES, a
California Limited Partnership
By: /s/ X.X. XXXXXXXX
----------------------------------------------
X.X. Xxxxxxxx, Trustee of the F.M. (Xxxxx)
Xxxxxxxx Trust, established September 17, 1985,
General Partner
By: /s/ XXXXXX XXXXXX XXXXXX
----------------------------------------------
Xxxxxx Xxxxxx Xxxxxx, Trustee of the Xxxxxx
Family Trust (Trust B) dated July 14, 1972,
Limited Partner
XXXXXXX INVESTMENT COMPANY, a
California limited partnership
By: /s/ XXXXXX X. XXXXXXX
----------------------------------------------
Xxxxxx X. Xxxxxxx
General Partner
CONSENT: /s/ D. XXXX XXXXXX
------------------------------------------
D. Xxxx Xxxxxx
-51-
5. SYCAMORE BUSINESS CENTER
SYCAMORE INVESTMENTS, a
California General Partnership
By: /s/ X.X. XXXXXXXX
----------------------------------------------
X.X. Xxxxxxxx, Trustee of the F.M. (Xxxxx)
Xxxxxxxx Trust, established September 17, 1985,
Partner
By: /s/ XXXXXX X. XXXXXX
----------------------------------------------
Xxxxxx X. Xxxxxx, Co-Trustee of the X-X Xxxxxx
Trust, established March 15, 1984, by Xxxxxx X.
Xxxxxx and Xxxxxxx Xxxxx Xxxxxx, Trustors,
Partner
By: /s/ XXXXXXX XXXXX XXXXXX
---------------------------------------------
Xxxxxxx Xxxxx Xxxxxx, Co-Trustee of the X-X
Xxxxxx Trust, established March 15, 1984, by
Xxxxxx X. Xxxxxx and Xxxxxxx Xxxxx Xxxxxx,
Trustors, Partner
By: /s/ XXXXXX XXXXXX XXXXXX
---------------------------------------------
Xxxxxx Xxxxxx Xxxxxx, Trustee of the Xxxxxx
Family Trust (Trust B) dated July 14, 1972,
Partner
-52-
6. COPPERWOOD CENTER
COPPERWOOD LEASING CO., a
California Limited Partnership
By: Newport National Corporation, a
California Corporation, General Partner
By: /s/ XXXXX X. XXXXXXXX
----------------------------------------
Xxxxx X. Xxxxxxxx, President
By: /s/ XXXXXX X. XXXXXXXX
----------------------------------------
Xxxxxx X. Xxxxxxxx, Secretary
By: /s/ X.X. XXXXXXXX
----------------------------------------------
X.X. Xxxxxxxx, Trustee of the F.M. (Xxxxx)
Xxxxxxxx Trust, established September 17, 1985,
General Partner
By: /s/ XXXXXX X. XXXXXX
----------------------------------------------
Xxxxxx X. Xxxxxx, Co-Trustee of the X-X Xxxxxx
Trust, established March 15, 1984, by Xxxxxx X.
Xxxxxx and Xxxxxxx Xxxxx Xxxxxx, Trustors,
General Partner
By: /s/ XXXXXXX XXXXX XXXXXX
----------------------------------------------
Xxxxxxx Xxxxx Xxxxxx, Co-Trustee of the X-X
Xxxxxx Trust, established March 15, 1984, by
Xxxxxx X. Xxxxxx and Xxxxxxx Xxxxx Xxxxxx,
Trustors, General Partner
By: /s/ XXXXXX X. XXXXXX
-----------------------------------------------
Xxxxxx X. Xxxxxx, Co-Trustee of the X-X Xxxxxx
Trust, established March 15, 1984, by Xxxxxx X.
Xxxxxx and Xxxxxxx Xxxxx Xxxxxx, Trustors,
Limited Partner
By: /s/ XXXXXXX XXXXX XXXXXX
----------------------------------------------
Xxxxxxx Xxxxx Xxxxxx, Co-Trustee of the X-X
Xxxxxx Trust, established March 15, 1984, by
Xxxxxx X. Xxxxxx and Xxxxxxx Xxxxx Xxxxxx,
Trustors, Limited Partner
-53-
By: /s/ XXXXXX XXXXXX XXXXXX
-------------------------------------------
Xxxxxx Xxxxxx Xxxxxx, Trustee of the Xxxxxx
Family Trust (Trust B) dated July 14, 1972,
Limited Partner
CONSENT: /s/ D. XXXX XXXXXX
--------------------------------------
D. Xxxx Xxxxxx
-54-
7. PACIFIC CORPORATE CENTER
PALOMAR VENTURE, a
California Limited Partnership
By: Newport National Corporation, a
California Corporation, General Partner
By: /s/ XXXXX X. XXXXXXXX
----------------------------------------
Xxxxx X. Xxxxxxxx, President
By: /s/ XXXXXX X. XXXXXXXX
----------------------------------------
Xxxxxx X. Xxxxxxxx, Secretary
By: /s/ X.X. XXXXXXXX
----------------------------------------------
X.X. Xxxxxxxx, Trustee of the F.M. (Xxxxx)
Xxxxxxxx Trust, established September 17, 1985,
General Partner
By: /s/ XXXXXX X. XXXXXX
----------------------------------------------
Xxxxxx X. Xxxxxx, Co-Trustee of the X-X Xxxxxx
Trust, established March 15, 1984, by Xxxxxx X.
Xxxxxx and Xxxxxxx Xxxxx Xxxxxx, Trustors,
General Partner
By: /s/ XXXXXXX XXXXX XXXXXX
----------------------------------------------
Xxxxxxx Xxxxx Xxxxxx, Co-Trustee of the X-X
Xxxxxx Trust, established March 15, 1984, by
Xxxxxx X. Xxxxxx and Xxxxxxx Xxxxx Xxxxxx,
Trustors, General Partner
By: /s/ XXXXXX XXXXXX XXXXXX
----------------------------------------------
Xxxxxx Xxxxxx Xxxxxx, Trustee of the Xxxxxx
Family Trust (Trust B) dated July 14, 1972,
Limited Partner
-55-
8. VIA DEL CAMPO COURT
RANCHO XXXXXXXX ASSOCIATES,
a California General Partnership
By: Newport National Corporation, a California
Corporation, General Partner
By: /s/ XXXXX X. XXXXXXXX
----------------------------------------
Xxxxx X. Xxxxxxxx, President
By: /s/ XXXXXX X. XXXXXXXX
----------------------------------------
Xxxxxx X. Xxxxxxxx, Secretary
By: /s/ XXXXX X. XXXXXXXX
----------------------------------------------
Xxxxx X. Xxxxxxxx, General Partner
By: /s/ XXXXXX X. XXXXXXXX
----------------------------------------------
Xxxxxx X. Xxxxxxxx, General Partner
By: /s/ XXXXXX X. XXXXXX
----------------------------------------------
Xxxxxx X. Xxxxxx, Co-Trustee of the X-X Xxxxxx
Trust, established March 15, 1984, by Xxxxxx X.
Xxxxxx and Xxxxxxx Xxxxx Xxxxxx, Trustors,
General Partner
By: /s/ XXXXXXX XXXXX XXXXXX
----------------------------------------------
Xxxxxx Trust, established March 15, 1984, by
Xxxxxx X. Xxxxxx and Xxxxxxx Xxxxx Xxxxxx,
Trustors, Partner
-56-
9. EASTSIDE NEWPORT CENTER
EASTSIDE ASSOCIATES, a
California Limited Partnership
By: Newport National Corporation, a California
Corporation, General Partner
By: /s/ XXXXX X. XXXXXXXX
-----------------------------------------
Xxxxx X. Xxxxxxxx, President
By: /s/ XXXXXX X. XXXXXXXX
-----------------------------------------
Xxxxxx X. Xxxxxxxx, Secretary
By: /s/ XXXXXX X. XXXXXX
----------------------------------------------
Xxxxxx X. Xxxxxx, Co-Trustee of the X-X Xxxxxx
Trust, established March 15, 1984, by Xxxxxx X.
Xxxxxx and Xxxxxxx Xxxxx Xxxxxx, Trustors,
General Partner
By: /s/ XXXXXXX XXXXX XXXXXX
-----------------------------------------------
Xxxxxxx Xxxxx Xxxxxx, Co-Trustee of the X-X
Xxxxxx Trust, established March 15, 1984, by
Xxxxxx X. Xxxxxx and Xxxxxxx Xxxxx Xxxxxx,
Trustors, General Partner
By: /s/ X.X. XXXXXXXX
-----------------------------------------------
X.X. Xxxxxxxx, Trustee of the F.M. (Xxxxx)
Xxxxxxxx Trust, established September 17, 1985,
General Partner
By: /s/ XXXXX X. XXXXXXXX
-----------------------------------------------
Xxxxx X. Xxxxxxxx, General Partner
By: /s/ XXXXXX X. XXXXXXXX
-----------------------------------------------
Xxxxxx X. Xxxxxxxx, General Partner
By: /s/ XXXXXX XXXXXX XXXXXX
-----------------------------------------------
Xxxxxx Xxxxxx Xxxxxx, Trustee of the Xxxxxx
Family Trust (Trust B) dated July 14, 1972,
Limited Partner
-57-
10. THE CAMPUS
THE CAMPUS, LLC., a
California Limited Liability Company
By: Newport National Corporation,
a California corporation,
Member Manager
By: /s/ XXXXX X. XXXXXXXX
----------------------------------------
Xxxxx X. Xxxxxxxx, President
By: /s/ XXXXXX X. XXXXXXXX
----------------------------------------
Xxxxxx X. Xxxxxxxx, Secretary
By: /s/ XXXXX X. XXXXXXXX
----------------------------------------------
Xxxxx X. Xxxxxxxx, Member
By: /s/ XXXXXX X. XXXXXXXX
----------------------------------------------
Xxxxxx X. Xxxxxxxx, Member
By: /s/ X.X. XXXXXXXX
----------------------------------------------
X.X. Xxxxxxxx, Trustee of the F.M. (Xxxxx)
Xxxxxxxx Trust, established September 17, 1985,
Member
By: /s/ XXXXXX X. XXXXXX
----------------------------------------------
Xxxxxx X. Xxxxxx, Co-Trustee of the X-X Xxxxxx
Trust, established March 15, 1984, by Xxxxxx X.
Xxxxxx and Xxxxxxx Xxxxx Xxxxxx, Trustors,
Member
By: /s/ XXXXXXX XXXXX XXXXXX
----------------------------------------------
Xxxxxxx Xxxxx Xxxxxx, Co-Trustee of the X-X
Xxxxxx Trust, established March 15, 1984, by
Xxxxxx Xxxxxx Xxxxxx and Xxxxxxx Xxxxx Xxxxxx,
Trustors, Member
-58-
11. LA TERRAZA DEVELOPMENT SITE
LA TERRAZA, a California General Partnership
By: Newport National Corporation, a California
Corporation, General Partner
By: /s/ XXXXX X. XXXXXXXX
---------------------------------------
Xxxxx X. Xxxxxxxx, President
By: /s/ XXXXXX X. XXXXXXXX
---------------------------------------
Xxxxxx X. Xxxxxxxx, Secretary
By: /s/ XXXXXX XXXXXX XXXXXX
---------------------------------------
Xxxxxx Xxxxxx Xxxxxx, Trustee of the
Xxxxxx Family Trust (Trust B) dated
July 14, 1972, General Partner
-59-
JOINDER BY COMPANY AND OP GENERAL PARTNER
-----------------------------------------
The undersigned join in this agreement to evidence their consent to
the provisions hereof and to confirm the representations, warranties and
certifications contained in this agreement which are expressly stated to be made
by them by their joinder.
XXXXXXXX PROPERTIES TRUST, a
Maryland Real Estate Investment Trust
By: /s/ XXXXX X. XXXXXXXXX
------------------------------------
Name:
-------------------------------
Title:
-------------------------------
XXXXXXXX PROPERTIES I, INC., a Delaware
Corporation
By: /s/ XXXXX X. XXXXXXXXX
------------------------------------
Name:
-------------------------------
Title:
-------------------------------
-60-
Acceptance by Escrow Holder:
_______________________________ hereby acknowledges that it has
received a fully executed original or original executed counterparts of the
foregoing Agreement of Purchase and Sale and Joint Escrow Instructions and
agrees to act as Escrow Holder thereunder and to be bound by and strictly
perform the terms thereof as such terms apply to Escrow Holder.
Dated: February 5, 1998 _______________________________________
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------
Its: Authorized Agent
-61-
