AGREEMENT OF PURCHASE AND SALE AND ESCROW INSTRUCTIONS
(STANFORD RANCH CROSSING - ROSEVILLE, CALIFORNIA)
AGREEMENT made this 31st day of December, 1997, by and between PRICE
ENTERPRISES, INC., a Delaware corporation (referred to herein as "Purchaser")
and OPUS WEST CORPORATION, a Minnesota corporation (referred to herein as
"Seller").
ARTICLE I
TERMS OF SALE
1.01 Definitions.
The following terms are used in this Agreement.
A) "Capitalization Rate" shall mean nine and 929/1000 percent
(9.929%).
B) "Closing" shall mean the date that a deed is recorded transferring
title to the Real Property from the Seller to the Purchaser or Purchaser's
nominee and the Phase I Amount is paid to the Seller.
C) "Closing Date" shall mean the date the Closing occurs.
C1) "Cost Plus Lease" is defined in Section 1.03(D)(1).
D) "Deed" shall mean a Grant Deed, in the form attached hereto as
Exhibit I.
E) "Effective Date" is defined in Section 6.18.
F) "Escrow Agent" shall mean:
Chicago Title Insurance Company
Attn: Xx. Xxxxxx X. Xxxxxx
000 Xxxxx Xxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
G) "Escrow Deposit" shall mean all amounts deposited by the Purchaser
with the Escrow Agent, plus all interest accumulated thereon.
H) "Fixed First Year Annual Rent" shall mean the fixed pre-determined
rent payable for the one-year period, beginning on the date the first
monthly installment is due. Excluded from the term Fixed First Year Annual
Rent are all contingent and/or
variable amounts which may become payable by a tenant under a Phase I Lease
or Phase II Lease, including, but not limited to percentage rent, Triple
Net Charges and other amounts.
I) "Fixed Monthly Rent" shall mean the fixed pre-determined monthly
rent payable during the lease term, including cost of living or scheduled
increases. Excluded from the term Fixed Monthly Rent are all contingent
and/or variable amounts which may become payable by a tenant, including,
but not limited to percentage rent, Triple Net Charges, and other amounts.
J) "Improvements" is defined in Section 1.02(A).
K) "Land" is defined in Section 1.02(A).
L) "Landlord" shall mean the landlord of a Phase I Lease or a Phase II
Lease, as the case may be.
M) "Law" shall mean any federal, state or municipal statute regulation
or ordinance which has jurisdiction over the Property.
N) "Leases" is defined in Section 1.02(C).
O) "Monetary Liens" are defined in Section 1.08(A).
P) "Personal Property" is defined in Section 1.02(B).
Q) "Purchase Price" is defined in Section 1.03(A).
R) "Permits" is defined in Section 1.02(D).
S) "Real Property" is defined in Section 1.02(A).
T) "Phase I Amount" is defined in Section 1.03(C)(2).
U) "Phase I Carry Lease" is defined in Section 1.05(A)(1).
V) "Phase I Carry Cost" is defined in Section 1.05(A)(2).
W) "Phase I Improvements" shall mean any Improvements existing as of
the Closing Date, or otherwise required to be made by the landlord pursuant
to a Phase I Lease.
X) "Phase I Lease" is defined in Section 1.03(C)(1)(a).
Y) "Phase II Amount" is defined in Section 1.03(D)(1)(a).
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Z) "Phase II Carry Cost" is defined in Section 1.03(D)(1)(d).
AA) "Phase II Expiration Date" is defined in Section 1.03(D)(1)(b).
BB) "Phase II Improvements" is defined in Section 1.03(D)(1)(g).
CC) "Phase II Lease" is defined in Section 1.03(D)(1)(c).
CC1) "Phase II Lease Conditions" is defined in Section 1.03(D)(1)(h).
DD) "Phase II Payment Conditions" is defined in Section 1.03(D)(1)(f).
EE) "Plans" are defined in Section 1.02(F).
FF) "Qualified Phase II Lease" is defined in Section 1.03(D)(1)(h).
GG) "Real Property" is defined in Section 1.02(A).
HH) "Rent Commencement Date" is the date by which a tenant under a
Phase I Lease or Phase II Lease is required to begin paying both its Fixed
Monthly Rent and its share of Triple Net Charges.
II) "Staples Lease" is defined in Section 1.03 (C)(1)(a).
JJ) "Subject Property" is defined in Section 1.02.
KK) "Tenant" shall mean a tenant under one of the Leases.
LL) "Title Commitment" is defined in Section 1.09(A).
MM) "Title Company" shall mean Chicago Title Insurance Company.
NN) "Title Documents" is defined in Section 1.09(A).
OO) "Title Insurance Policy" shall mean an ALTA Owner's Title Policy
(10/17/92) with extended coverage.
PP) "Triple Net Charges" shall mean taxes, insurance and common area
maintenance costs required to be paid directly or indirectly by a tenant
under a Phase I Lease or a Phase II Lease.
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QQ) "Vacant Space" is defined in Section 1.03(D)(1)(e).
RR) "Warranties" are defined in Section 1.02(E).
1.02 Sale of Property. Seller agrees to sell to Purchaser, and Purchaser
agrees to buy from Seller, the following property (collectively, "Subject
Property"):
(A) Real Property. Fee simple interest in certain real estate
consisting of approximately 20.2896 acres of land located in the City of
Roseville, County of Placer, State of California, legally described on
Exhibit A attached hereto and depicted on the Site Plan attached hereto as
Exhibit B ("Land"), together with (i) all building structures, improvements
and fixtures (other than fixtures or other improvements owned by Tenants or
utility providers) and currently located on the Land, and the buildings,
fixtures and improvements required herein to be constructed and completed
by Seller ("Improvements'), and (ii) all rights, privileges, servitudes,
easements and appurtenances thereunto belonging or appertaining, including
all right, title and interest of Seller, if any, in and to the streets,
alleys and rights-of-way adjacent to the Land and Improvements
(collectively, "Real Property").
(B) Personal Property. All fixtures, furniture, equipment and other
personal property located upon the Real Property, if any, now or hereafter
owned by Seller and used in connection with the operation and or
maintenance of the Improvements (the "Personal Property").
(C) Leases. All rights of Seller under the leases described on Exhibit
C attached hereto, together with all amendments or modifications thereto
and the Staples Lease if fully executed and delivered by the landlord and
tenant therein prior to the Closing ("Leases").
(D) Permits. Seller's interests in any and all licenses, permits,
certificates of occupancy and franchises affecting the Subject Property, to
the extent such permits are assignable ("Permits").
(E) Warranties. Seller's interests in all warranties and guaranties
given to, assigned to or benefiting Seller or the Real Property regarding
the acquisition, construction, design, use, operation, management or
maintenance of the Real Property ("Warranties").
(F) Plans. Seller's interest in and to all final plans and
specifications, including but not limited to "As Built" plans
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(excluding shop drawings) relating to the construction of the Improvements
("Plans").
(G) Declaration. All rights, obligations, duties and interests of
Seller as Declarant under that certain Declaration of Covenants, Conditions
and Restrictions for Stanford Ranch Crossing recorded March 26, 1996, in
the Official Records of Placer County, California, in Instrument No.
96-016332 (the "Declaration"), accruing on and after the Closing Date.
Notwithstanding anything to the contrary in this Agreement or any of the
Seller's Closing Documents, it is understood and agreed that Seller is not
selling or transferring to Purchaser any right, title or interest of Seller to
receive payments of any kind, pursuant to that certain Supplemental Development
Agreement Parcels 21, 24, 25, 34, 40, 42, 43, 48 and 00 XXXXX XXXXXXX XXXXXXXXX
Xxxxxxxx Xxxx Xxxx dated June 14, 1991, and recorded June 18, 1991, Official
Records of Placer County, California, as Instrument No. 91-035023, as amended by
that certain Amendment of Supplemental Development Agreement Parcels 21, 24, 25,
34, 40, 42, 43, 48 and 00 XXXXX XXXXXXX XXXXXXXXX Xxxxxxxx Xxxx Xxxx dated
October 20, 1995, and recorded November 7, 1995, in the Official Records of
Placer County, California, in Instrument No. 95-059718 (as amended, the
"Development Agreement"). Seller shall retain all rights in and to the
Development Agreement, to receive future payments to be made thereunder. Under
no circumstances shall the Subject Property or any assets conveyed pursuant to
the Seller's Closing Documents include Seller's interest in the Development
Agreement to receive future payments.
1.03 Purchase Price.
A) Aggregate Purchase Price. Purchaser shall pay Seller a "Purchase
Price" for the Subject Property in an amount equal to the sum of the "Phase
I Amount" as provided in paragraph (C) below, plus the "Phase II Amount" as
provided in paragraph (D) below, provided, however, that the aggregate
amount of the Purchase Price shall in no event exceed Twenty Three Million
Nine Hundred Seventy-Five Thousand Dollars ($23,975,000.00).
B) Payment. The Purchase Price shall be payable by the Purchaser as
follows:
1. Purchaser shall deposit Five Hundred Thousand Dollars
($500,000) with Escrow Agent by cash or check within one (1) business
days after the date of this Agreement.
2. Purchaser shall pay the Phase I Amount subject to closing
adjustments as provided herein, through escrow, at the time of
Closing.
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3. Purchaser shall pay the Phase II Amount as provided in
paragraph (D)(2) and (3) below herein.
4. The Escrow Deposit referred to in Section 1.03(B)(1) shall
serve to secure Purchaser's obligation to pay certain amounts required
of it after the Closing Date, and the parties agree that in absence of
a default by Purchaser, the Escrow Deposit shall be released to
Purchaser upon the first to occur of the following conditions:
a. If the Staples Lease is a Phase I Lease, the Escrow
Deposit shall be released in full to Purchaser upon the
occurrence of the Rent Commencement Date under the Staples Lease;
b. If the Staples Lease is a Phase II Lease, the Escrow
Deposit shall be credited against the Phase II Amount due to
Seller relating to the Staples Lease and such amount credited
shall be paid to Seller upon the Phase II Payment Conditions
being satisfied with respect to the Staples Lease; or
c. If the Escrow Deposit is not either released to Purchaser
under paragraph a. above, or credited against the Phase II Amount
as provided in paragraph b. above, by January 1, 1999, for any
reason whatsoever (other than Purchaser's default hereunder),
then the Escrow Deposit shall be released in full to Purchaser.
C) Phase I Amount.
1) For purposes of this Agreement, including, but not limited to this
paragraph (C), the following definitions shall apply:
a) "Phase I Lease" shall mean only: (i) those leases listed on Exhibit
C attached hereto; (ii) a certain lease to Staples, Inc. (the "Staples
Lease"), in the form and substance, which has been approved by Purchaser
and Seller as evidenced by their approval signatures on the first (1st)
page of such form lease, provided such lease has been executed and
delivered by both Staples, Inc. and the Seller and a copy of such signed
lease has been delivered to Purchaser prior to the date of Closing. No
other leases, including, but not limited to a lease to Cost Plus, even if
executed prior to the Closing Date shall be treated as a Phase I Lease.
b) "Phase I Tenant" shall mean the tenant under a Phase I Lease.
2) The "Phase I Amount" shall mean the aggregate amount of Fixed First Year
Annual Rent for all Phase I Leases, divided by the "Capitalization Rate".
However, in the event that after the Closing Date, the Fixed First Year Annual
Rent of one (1) or more Phase I Leases
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is adjusted upward or downward based upon a determination of the actual floor
area of the premises under such lease, then the Phase I Amount shall be
increased or decreased, as the case may be, in which case the Purchaser shall
pay to the Seller the amount of any increase in the Phase I Amount and the
Seller shall pay to Purchaser the amount of any decrease in the Phase I amount,
no later than thirty (30) days after the actual floor area with respect to the
particular Phase I Lease is determined.
D) Phase II Amount.
1) For purposes of this Lease, including this paragraph (D), the following
definitions shall apply:
a) "Phase II Amount" shall mean the amounts payable to Seller under
paragraph (D)(2) below.
b) "Phase II Expiration Date" shall mean June 30, 1999.
c) "Phase II Lease" shall mean all leases with respect to the Subject
Property which are not Phase I Leases and which are executed and delivered
between landlord and the tenant of such leases, no later than the Phase II
Expiration Date; excluded from the term Phase II Leases are leases of any
premises which were covered by Phase I Leases, and which thereafter become
available for lease.
d) "Phase II Carry Cost" shall mean, with respect to each Phase II
Lease, the aggregate amount of monthly installments of Triple Net Charges
for the period beginning on the Closing Date (assuming for this purpose,
that the Rent Commencement Date of each such Phase II Lease had occurred on
the Closing Date, even though the Rent Commencement Date does not in fact
occur on the Closing Date), until the date the tenant under such Phase II
Lease is required to begin paying Triple Net Charges.
e) "Vacant Space" shall mean that portion of an existing building
which has not been leased during the period from the date of Closing until
the Phase II Expiration Date (or if leased during such period, such lease
was terminated prior to the Rent Commencement Date), and for which no
Qualified Phase II Lease was rejected by Purchaser, pursuant to Section
1.03(D)(2)(b).
f) "Phase II Payment Conditions", with respect to each Phase II Lease,
shall mean:
i. Phase II Improvements as defined in paragraph g below has been
substantially completed;
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ii. a certificate of occupancy with respect to the Phase II
Improvements has been delivered to Purchaser;
iii. the Rent Commencement Date has occurred;
iv. a Tenant Phase II Estoppel Certificate substantially in the
form attached hereto as Exhibit O (with no material or adverse
deviations or disclosures) has been delivered by the Tenant (subject
to the right of Seller to execute certain Seller Estoppel
Certificates, as contemplated under Section 2.02(C), below, but in the
form attached as Exhibit O-1);
v. (a) The Title Company has provided to Purchaser appropriate
written endorsements to Purchaser's title Insurance Policy, which
assures that the Phase II Improvements relating to such Phase II Lease
are not subject to any mechanics' or materialmen's liens resulting
from Seller's construction of such Phase II Improvements (which
endorsements shall be subject to any additional title exceptions
created or approved by the act or omission of Purchaser, and the
premium for which endorsements shall be paid by Seller (to the extent
required in Section 3.08, i.e., Seller shall be required to pay the
portion of the premium attributable to the CLTA Standard Policy amount
only) and (b) Seller has provided to the Title Company an updated
survey or new survey to the extent required, if at all, by the Title
Company to issue the endorsements described in this paragraph vii.
vi. Seller has made all payments to the tenant under the Phase II
Lease (or to Purchaser if such payments are not yet due) required to
be paid by the landlord under such lease for tenant improvements and
other purposes.
g) "Phase II Improvements" shall mean all construction, alterations,
changes and improvements required to be made by the landlord under a Phase
II Lease.
h) "Qualified Phase II Lease" shall mean a Phase II Lease duly
executed by a tenant and delivered to Purchaser, which meets all of the
following standards and conditions (collectively, the "Phase II Lease
Conditions"):
1. Tenant must have a minimum tangible net worth of Five Hundred
Thousand Dollars ($500,000), as evidenced by reasonable documentation.
2. Tenant must have at least five (5) existing store locations.
3. Tenant must have been in the business for which the premises are
being leased for at least five (5) years.
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4. The term of the lease, excluding options, must be for a minimum of
five (5) years, computed from the date rent commences and a maximum of
fifteen (15) years.
5. There may be options to extend the lease term, provided there may
only be two (2) extensions, each of which may not be more than five (5)
years.
6. Maximum payment by the landlord for tenant improvements and any and
all other costs shall not exceed Ten Dollars ($10.00) per square foot of
floor area of the Premises.
7. The lease must prohibit the tenant from: (i) violating exclusive
uses given to other tenants of the Subject Property, (ii) violating
restrictions contained in the leases of other tenants of the Subject
Property, and (iii) violating any instruments of record which encumber the
Real Property.
8. The lease must not grant "exclusive use" rights (i) other than as
against shop space tenants in Retail A, B or D, as shown on the Site Plan
attached as Exhibit B, and (ii) other than in regard to the actual business
activities of a Tenant as of the date the Tenant commences business from
its premises.
9. The Fixed Annual Rent (which shall mean the Fixed Monthly Rent
multiplied by 12) for the first year, beginning on the Rent Commencement
Date (the "First Lease Year"), shall not be less than Sixteen Dollars
($16.00) per square foot of floor area for Retail B; Twenty Dollars
($20.00) per square foot of floor area for Retail D tenants; Eighteen
Dollars ($18.00) per square foot of floor area for Retail A tenants; and
not more than Twenty-Four Dollars ($24.00) per square foot of floor area of
the premises. The Fixed Annual Rent shall increase by a minimum of ten
percent (10%) every five (5) Lease Years, during the balance of the lease
term including option periods.
10. After the first lease year, the Fixed Annual Rent for a lease year
shall never be less than the Fixed Annual Rent for the previous lease year.
("Lease Year" shall mean each consecutive period of twelve (12) calendar
months following the first leased year.)
11. Tenant must pay for its pro-rata share (based upon a ratio of the
floor area of the Tenant's premises to the floor area of the buildings
within the Real Property) of all common area expenses (including, but not
limited to so-called capital expenditures), taxes and insurance, with no
maximum ceiling.
12. The lease must be subject to all matters of record.
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13. There shall be no co-tenancy provision.
14. The tenant shall have no termination rights (other than in the
event of casualty, condemnation or similar event as provided in the
Standard Lease, referenced in subparagraph 17, below).
15. The tenant must commence paying Fixed Annual Rent and all other
charges no later than four (4) months after the date Phase II Improvements
have been substantially completed.
16. Any warranty or guaranty with respect to Phase II Improvements
shall be limited for a period not to exceed one (1) year from the date such
Phase II Improvements are substantially completed.
17. The Lease must substantially conform to the lease form attached
hereto as Exhibit J (the "Standard Lease"), subject to the matters set
forth in items set forth in this paragraph A), sub-paragraphs 1-16.
In the event the Purchaser, at its option, elects to waive any of the above
standards or conditions with respect to a particular lease, such waiver shall
not be deemed a waiver with respect to any other lease. If any such proposed
tenant satisfies the requirements for a tenant of a Qualified Phase II Lease,
Seller shall notify Purchaser, within ten (10) days of commencing negotiations
with such proposed tenant, of the identity of the proposed tenant. In the event
a prospective Phase II Tenant offers to enter into a lease with Purchaser by
delivery to Purchaser of a written lease duly executed by such prospective
tenant and one or more of the Phase II Lease Conditions are not satisfied,
nonetheless the Phase II Conditions shall be deemed satisfied with respect to
such lease, provided the failure to satisfy one or more of the Phase II Lease
Conditions is not a material deviation with respect to the overall Phase II
Lease Conditions as they apply to this prospective tenant and the Subject
Property. Purchaser approves the Staples Lease and the Cost Plus Lease as
Qualified Phase II Leases, notwithstanding the deviations from the foregoing
criteria.
In the event Staples, Inc. does not execute the Staples Lease or Cost Plus,
Inc. does not execute the Cost Plus Lease, for the premises designated on the
Site Plan, then replacement tenants and the leases for such replacement tenants
shall not be subject to the criteria for the Qualified Phase II Lease; however,
such replacement tenants may be (x) one of the tenants listed on Exhibit P
hereto, or (y) subject to Purchaser's sole, absolute and unrestricted
discretion, another national or regional tenant, suitable for comparable "retail
power centers"; and in either event, subject to a lease agreement with terms and
conditions in
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such leases satisfactory to Purchaser in its sole, absolute and unrestricted
discretion. "Cost Plus Lease" shall mean a certain lease to Cost Plus, Inc. in
the form and substance which has been approved by Purchaser and Seller as
evidenced by their approval signatures on the first page of such form lease.
Seller agrees to consider in good faith any tenants proposed by Purchaser,
and if acceptable to Seller, Purchaser may participate in the commission
arrangement, provided Seller shall not be required to pay any commission in
excess of the amounts stated in the applicable Seller listing agreements.
Purchaser and Seller shall cooperate and communicate with each other in the
development and leasing of the undeveloped space and the Vacant Space, with the
intent to procure suitable Tenants to lease all available space. Seller shall
inform each prospective Phase II Tenant, that Purchaser is the owner of the
Subject Property, and Purchaser must execute any lease in order to make it
binding, however, Seller shall negotiate the terms of the proposed lease
agreements with each prospective Phase II Tenant. Purchaser shall receive from
Seller copies (as and when distributed to each tenant), of all correspondence,
draft agreements and other information. Seller shall obtain Purchaser's approval
of each letter of intent with a prospective Phase II Tenant, before proceeding
to negotiate a lease agreement. Purchaser agrees to respond to any request of
Seller to approve a leasehold letter of intent, within three (3) days of
Purchaser's receipt. Except for Seller's limited authority to discuss
non-binding lease terms and conditions as aforementioned, Seller is not an agent
of the Purchaser nor may Seller hold itself out as an agent. Seller has no
authority on or after the Closing Date to enter into any lease or other
agreement with respect to the Real Property on behalf of the Purchaser or on its
own behalf; provided, however, Seller may enter into contracts on its own behalf
with respect to construction of improvements for Phase I and Phase II Leases,
pursuant to Section 1.04 herein.
2) Subject to the limitations and conditions of paragraphs (3) and (4)
below, Purchaser shall make the following Phase II Amount payments to Seller:
a) Provided all Phase II Payment Conditions with respect to a Phase II
Lease have been satisfied, Purchaser shall pay Seller within ten (10) days
after the date all such conditions are satisfied, an amount equal to the
Fixed First Year Annual Rent for such lease,divided by the Capitalization
Rate, reduced by the Phase II Carry Cost for each such lease. In the event
the Phase II Lease is terminated for any reason, prior to all of the Phase
II Payment Conditions being satisfied and after the Phase II Expiration
Date, then within thirty (30) days after such termination, Purchaser shall
pay Seller the amount for Vacant Space as provided in Section
1.03(D)(2)(c). If a Phase II Lease terminates prior to its Rent
Commencement Date and prior to the Phase II Lease Expiration Date, then
Seller shall have an
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opportunity to re-lease such space prior to the Phase II Lease Expiration
Date.
b) In the event two (2) counterparts of the Qualified Phase II Lease
executed by the Tenant therein are submitted to Purchaser and Purchaser at
its option elects not to execute such lease within ten (10) days after
receipt of same, then Purchaser shall pay the Seller an amount equal to the
Fixed First Year Annual Rent for such Lease, divided by the Capitalization
Rate, reduced by the Phase II Carry Cost for each such lease, not later
than sixty (60) days after such Qualified Phase II Lease was submitted to
Purchaser.
c) Purchaser shall pay to Seller within thirty (30) days after the
Phase II Expiration Date, a sum equal to One Hundred Ten Dollars ($110.00),
multiplied by the floor area of the Vacant Space which Seller must have put
in "Vanilla Shell" condition as defined in Exhibit K.
d) In the event the Staples Lease is not executed prior to Closing and
the Purchaser does not execute a lease with Staples, Inc. (or a tenant
permitted herein as a replacement) after the date of Closing and prior to
the Phase II Expiration Date, with respect to the premises referred to in
the Staples Lease, then the Purchaser shall pay the Seller within thirty
(30) days after the Phase II Expiration Date, the sum of $912,000.00 (i.e.,
24,000 square feet multiplied by $38.00).
e) In the event the Cost Plus Lease is not executed prior to Closing
and the Purchaser does not execute a lease with Cost Plus (or a tenant
herein permitted as a replacement) after the date of Closing and prior to
the Phase II Expiration Date, with respect to the Cost Plus Pad Area,
designated on the Site Plan attached hereto as Exhibit B, then the
Purchaser shall pay the Seller within thirty (30) days after the Phase II
Expiration Date, the sum of $718,200.00 (i.e., 18,900 square feet
multiplied by $38.00).
3) No premises or lease shall be considered more than once in determination
of the "Phase II Amount."
4) In the event the Staples Lease is deemed a Phase I Lease, Purchaser's
obligation to make any of the payments provided in Section 1.03(D)(2) above
shall be suspended until the earlier of the Rent Commencement Date under the
Staples Lease or the Phase II Expiration Date. During such period the obligation
is suspended, Seller shall be entitled to be paid all Fixed Monthly Rent paid
under any Phase II Lease, and Purchaser shall retain the Triple Net Charges.
Further, if as of the Phase II Expiration Date, the Rent Commencement Date under
the Staples Lease has not occurred, then the parties, no later than July 15,
1999, shall adjust the Purchase Price, and make payments to the other, based
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upon consideration of the following items: (i) a credit to Purchaser for the
portion of the Purchase Price attributable to the Staples Lease (i.e., paid at
Closing, based upon its Fixed First Year Annual Rent and the Capitalization
Rate); and (ii) a credit to Seller for the amounts contemplated under
subparagraphs 2.a), 2.b), 2.c), 2.d), and (if applicable) 2.e) above.
1.04 Seller's Development Duties.
A) Seller shall, at its sole cost and expense, cause the design and
construction of all buildings and other improvements required to the be
performed by the landlord, pursuant to the terms and conditions of any and all
Phase I Leases and Phase II Leases, in accordance with the terms of such leases.
B) Seller shall, at its sole cost and expense, complete the construction of
the buildings and other improvements currently under construction shown on the
Site Plan attached hereto as Exhibit B as Retail A, Retail B and Retail D
pursuant to the Vanilla Shell specifications set forth on Exhibit K attached
hereto, no later than the Phase II Lease Expiration Date, or sooner as may be
required by a Phase II Lease.
C) After Closing, Purchaser shall execute promptly all applications for
building permits or other third party approvals, at Seller's cost and expense,
which may be required in connection therewith.
D) After execution of a Phase II Lease by the Purchaser and the tenant
thereunder, Seller shall diligently pursue obtaining the tenant's agreement on
final plans and specifications for Phase II Improvements as provided in such
lease, which must also be approved by the Purchaser. In any situation where the
landlord under a Phase II Lease has the right to approve changes proposed to the
final plans and specifications for Phase II Improvements, then both Seller and
Purchaser shall have the right to approve such proposed changes, such approval
not to be unreasonably withheld or delayed. If so approved, then in addition to
the sums required to be paid by the Purchaser to Seller with respect to such
lease under Section 1.03(D)(2), Purchaser shall pay to Seller an additional sum
equal to the cost to Seller of making such changes plus Seller's overhead and
profit thereon, as such costs, overhead and profit were quoted to the tenant and
approved by Purchaser and agreed to in writing by Purchaser and such tenant, to
the extent the landlord under such lease has a right to be reimbursed for such
costs, on the earlier of (x) 10 days after receipt of such amount from the
tenant, or (y) in conjunction with the payment of the Phase II Amount to Seller
for such tenant.
E) In the event any mechanics' liens are filed against the Subject Property
due to Phase II Improvements which Seller does not discharge (by payment,
bonding or otherwise) within ten (10)
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business days after Purchaser gives Seller written notice of same, then
Purchaser may pay or discharge any such liens and the costs so incurred by
Purchaser shall be immediately reimbursed by Seller and in addition, Purchaser
may off-set such costs against any sum which may be due or become due the
Seller.
F) Upon substantial completion of Phase I Improvements or Phase II
Improvements, as the case may be, with respect to a particular lease, Seller
warrants to Purchaser such improvements against defective workmanship and/or
materials for a period of one (1) year after the date of substantial completion
and Seller shall promptly, at its sole cost and expense, repair or replace any
defective item occasioned by poor workmanship and/or materials discovered during
said one-year period. Performance of such one (1) year warranty shall be
Seller's sole and exclusive obligation with respect to defective workmanship
and/or materials and Purchaser's rights to enforce such one (1) year warranty
shall be Purchaser's sole and exclusive remedy to such defective workmanship
and/or materials in limitation of any contract, warranty or other rights,
whether expressed or implied, that Purchaser may otherwise have under applicable
law. The reference above to "one (1) year" shall be increased to the warranty
period in excess thereof, if so provided in any Phase II Lease.
G) Seller shall, at its sole cost and expense, use reasonable efforts to
negotiate for, procure and maintain all required governmental approvals (the
"Governmental Approvals") necessary for the commencement and completion of the
construction of Phase I Improvements and Phase II Improvements in accordance
with the terms and provisions of each Phase I Lease and Phase II Lease (the
"Work"). Such Governmental Approvals shall include, but not be limited to, any
and all zoning approvals (preliminary and final), plat approvals (preliminary
and final), approval of all site plans and specifications, approval of all
dedications, acceptance of all components of the Work by the applicable
governmental authorities as evidenced by a certificate of occupancy, and any
other approvals reasonably appropriate for the performance of the Work. In this
connection, Purchaser shall reasonably cooperate with and assist Seller, but
Purchaser shall not be required to pay or incur any out-of-pocket costs or
expenses in so doing. Seller may not consent to any restrictions or limitations
on the future uses or development of the Real Property. The Work shall be
performed by Seller (i) in a good and workmanlike manner; (ii) in accordance
with the applicable lease and the final plans and specifications prepared in
connection therewith; (iii) at Seller's sole cost and expense (except as
otherwise provided herein with respect to change orders); and (iv) in accordance
with any and all applicable laws, codes, ordinances and regulations, as then
presently interpreted and enforced, and the Declaration.
H) Seller shall promptly pay for all Work in a timely manner before any
such payments are delinquent. Seller shall
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deliver to Purchaser on a timely basis such information as is reasonably
requested by Purchaser in order to ensure the payment by Seller when due of all
amounts so owing. Seller, throughout the term of the construction of the Work,
shall not permit any mechanics' liens, materialmen's liens, construction liens
and other liens for labor, services or materials furnished or alleged to have
been furnished and/or charged to or for Seller or any contractor or
subcontractor of Seller, or any of them, which may be recorded against or
otherwise the Subject Property, to attach to or remain against the Subject
Property, or any portion thereof, and, within fifteen (15) days of receipt of
written notice from Purchaser or any third party of any claim for any such lien,
Seller shall cause any and all such liens or claims of lien to be paid,
satisfied, released, cancelled, discharged (by bond or otherwise) or vacated. In
absence of Seller's cure or release of any such third party lien, then Purchaser
shall have the rights set forth in paragraph (E) above.
I) Upon commencement of any Work and continuing until substantial
completion of such Work, Seller shall keep that portion of the Real Property on
which such Work is being performed in a reasonably neat, clean and orderly
condition, free of waste, debris, trash and rubbish. Seller shall perform such
Work so as to prevent injury to, or so as to minimize interference with,
Purchaser or the tenants of the Real Subject Property or their respective
employees, agents, suppliers, customers or invitees to the extent reasonably
practicable. Upon commencement of the Work and continuing until substantial
completion of the Work, Seller shall maintain, at its sole cost and expense,
fire and extended coverage insurance, on an "All-Risk/Builder's Risk" basis, on
the Work, for one hundred percent (100%) of the replacement cost thereof with a
carrier holding an AM Best rating of "A". Each policy shall include a waiver of
subrogation in favor of Purchaser and shall be the primary policy. In addition,
Seller shall procure and maintain, at its sole cost and expense, a policy or
policies of liability insurance with limits of liability not less than as set
forth below:
A. Worker's Compensation Statutory
Employer's Liability Statutory
B. Commercial General $2,000,000 with respect
Liability to any one occurrence and
Bodily Injury $1,000,000.00 with respect
Property Damage to the annual policy
aggregate
C. Excess Indemnity $5,000,000.00
(Umbrella) Coverage
Each policy referred to in this paragraph (I) shall name Purchaser as an
additional insured. Evidence of the foregoing
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coverages (either represented by certificates of insurance issued by the
applicable insurance carrier(s) or by filing a copy of all policies with
Purchaser) must be furnished to Purchaser. Such certificates of insurance shall
state that Purchaser will be notified, in writing, thirty (30) days prior to
cancellation. If Seller fails to procure the required insurance within ten (10)
days notice from Purchaser, then Purchaser shall have the right to procure
comparable insurance coverage and the costs so incurred by Purchaser must be
immediately reimbursed to Purchaser by Seller.
J) Seller hereby agrees to indemnify, defend and hold harmless Purchaser
from and against any and all claims, demands, liabilities, damages, costs,
losses and expenses (including, without limitation, reasonably attorneys' fees)
(excepting therefrom any claims, damages, costs, losses or expenses to the
extent caused by negligence of Purchaser, or the tenants under the Leases or any
of its or their employees or agents) paid, suffered or incurred by Purchaser
arising out of or resulting from the performance of the Work, provided that any
such claim, damage, cost, loss or expense is (i) attributable to bodily injury,
sickness, disease or death, or to injury to or destruction of tangible property
(other than the Work itself); and (ii) caused by any negligent act or omission
or any wrongful intentional act of Seller, its contractors, subcontractors,
suppliers, laborers, agents or employees on or about the Real Subject Property.
1.05 Seller's Payment of Rent and Carry Costs - Phase I Leases.
A) For purposes of this Section 1.05, the following definitions shall
apply:
1. "Phase I Carry Lease" is a Phase I Lease whose Rent Commencement
Date has not occurred by the date of Closing.
2. "Phase I Carry Cost" shall mean, with respect to each Phase I Carry
Lease, the sum of monthly installments of Fixed Monthly Rent and Triple Net
Charges beginning on the Rent Commencement Date, payable during the term of
such lease beginning on the Rent Commencement Date.
B) Beginning on the Closing Date and continuing on the first day of each
calendar month thereafter, Seller shall pay to Purchaser an amount equal to the
Phase I Carry Cost which would have been required to be paid under each Phase I
Carry Lease, assuming, for this purpose, that the Rent Commencement Date of each
of such Phase I Carry Lease had occurred on the Closing Date (even though the
Rent Commencement Date does not in fact occur on the Closing Date), provided
such payments by the Seller to the Purchaser shall terminate on the earlier of
(i) the actual Rent Commencement Date of each of such Phase II Leases or (ii)
the Phase II Lease Expiration Date. If the actual Rent Commencement Date is
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other than the first day of a calendar month, the Phase I Carry Cost for such
month shall be pro-rated on a daily basis.
C) On the Closing Date, Purchaser shall receive as a credit
against the Phase I Amount, a sum equal to the Phase I Carry Cost which will
accrue on and after the Closing Date through the month of January, 1998, and
accordingly, such credited amounts shall not be paid subsequently.
1.06 Broker's Fees.
Seller shall at its sole cost pay for all broker's fees and commissions and
broker's expenses relating to Phase I Leases and Phase II Leases, heretofore or
hereafter incurred by Seller or Purchaser.
1.07 Phase II Leases - Exclusive Leasing Rights.
Subject to the provisions of Section 1.03(D), Seller shall have the
exclusive right to procure leases for that portion of the Real Property, which
is not subject to a Lease as of the Closing Date. The foregoing exclusive right
of Seller shall not include any right to execute any agreements, including
Leases, on behalf of Purchaser, or to otherwise bind Purchaser. Purchaser
approves the engagement by Seller, on its own behalf, of Xxxxxxxxx and
Associates as the leasing agent for the Subject Property, however, Purchaser
shall have no liability for the commissions payable to such broker.
1.08 Title.
A) At Closing, Seller shall deliver through escrow the Deed, conveying to
the Purchaser (or its nominee) title to the Real Property in fee simple, free of
all mortgages, deeds of trust, mechanic's liens and other monetary liens and
encumbrances disclosed in the Title Commitment or by the Title Company prior to
Closing, or otherwise known by Seller or imposed upon the Real Property by
Seller (referred to herein as "Monetary Liens"), but subject to:
(i) current real estate taxes and assessments, which are a lien not
yet delinquent;
(ii) the lien of supplemental taxes assessed pursuant to Chapter 3.5
commencing with Section 75 of the California Revenue and Taxation Code
("Code"), but only to the extent that such supplemental taxes are
attributable to the transaction contemplated by this Agreement. Seller
shall be responsible for, and hereby indemnifies Purchaser and the Subject
Property against, any supplemental taxes assessed pursuant to the Code, to
the extent that such taxes relate to events (including,
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without limitation, any changes in ownership and/or new construction)
occurring prior to the Closing; and
(iii) recorded covenants, conditions, restrictions and easements,
matters that an accurate survey would disclose (subject to the Purchaser's
right of approval pursuant to Section 2.01.A)), and rights of parties in
possession, pursuant to the Leases, as approved by Purchaser pursuant to
Section 2.01.C).
Notwithstanding the retention by Seller of the liability for the taxes described
in subpart (ii) above, Seller shall have the right to collect any such amount
from the Tenants, to the extent allowed under the applicable Leases.
B) Except for Monetary Liens, and Seller's obligations with respect to
supplemental taxes as aforementioned in paragraph A) above, the Seller shall
have no obligation to remove any title exceptions of record which exist on the
Effective Date.
C) Unless and until this Agreement is terminated, Seller shall not cause or
permit any liens, covenants, conditions, restrictions, easements or any other
matter to encumber the title to the Real Property by record or otherwise, except
for real estate taxes and assessments which are not delinquent.
1.09 Title Commitment - Survey.
A) Seller shall, at its expense, order a title commitment (the "Title
Commitment") with respect to the Property, including all appurtenant easements,
with complete and legible copies of all exception instruments referred to
therein (referred to collectively as "Title Documents") within one (1) business
day after the Effective Date and cause same to be delivered to Purchaser.
B) Purchaser may, within one (1) business days after the Effective Date,
instruct the Escrow Agent to order a Uniform Commercial Code Financing Statement
Search covering the Property, the Seller's name and any other possible debtors.
C) Prior to execution of this Agreement, Seller has delivered to Purchaser
a copy of that certain ALTA survey of the Real Property dated May 9, 1996,
prepared by Xxxx & Xxxxxx (the "Survey"). Prior to the Contingency Date, Seller
shall, at its cost and expense, cause the Survey to be updated (or a new Survey
to be prepared) and delivered to Purchaser and the title company. The updated or
new Survey shall:
1) Set forth an accurate description of the Real Property and locate
all of the then Improvements;
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2) Locate all the exceptions disclosed in the Title Commitment
(setting forth the book and page or document number of the recorded
instruments creating the same), alleys, streets and roads;
3) Show any encroachments upon or by the Real Property;
4) Contain a surveyor's certification in favor of Purchaser and the
title company and which shall allow the title company to delete or amend
any survey exception to be contained in Purchaser's title policy;
5) Show all dedicated public streets providing access to the Real
Property and the municipal address of the Improvements;
6) Be prepared in conformity with minimum standard detail requirements
for land title surveys of the American Land Title Association and the
American Congress on Surveying and Mapping; and
7) Address ALTA/ACSM Table A optional items numbers 1, 2, 3, 6, 7(a),
7(b)(1), 8, 9 and 11.
1.10 Violations.
In the event that prior to Closing, Seller becomes aware of any toxic,
hazardous waste materials or contaminants on the Property or any other matter
affecting the Property which violates any applicable Law, Seller shall within
forty-eight (48) hours, but in no event, later than Closing, give Purchaser
written notice of such matter.
1.11 Eminent Domain.
In the event that prior to Closing proceedings in eminent domain are
contemplated, threatened or instituted by any governmental agency, Seller shall
give Purchaser written notice of same within forty-eight (48) hours after Seller
becomes aware of same, but no later than the time of Closing.
1.12 Right of Entry.
Until Closing or termination of this Agreement, whichever occurs first,
Purchaser and its agents and designees shall have the right to enter upon the
Subject Property at any time and from time to time to perform any and all test
and studies Purchaser deems appropriate, including, but not limited to, soils
tests. Purchaser hereby agrees to indemnify, defend, and hold Seller completely
harmless against any loss, damage, liability, or expense, including reasonable
attorneys' fees, arising out of the acts or omissions,
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or intentionally wrongful acts of the Purchaser or its agents or independent
contractors under this Section, or in enforcing this indemnity. If Purchaser
does not acquire the Subject Property, Purchaser agrees to promptly repair any
damage it causes to the Subject Property.
1.13 Delivery of Documents.
Seller has delivered to Purchaser copies of the following documents and
materials pertaining to the Real Property:
A) Leases. All Leases (including all amendments thereto) and
guarantees of Leases.
B) Building Plans. A complete set of building plans.
C) Rent Roll. A schedule ("Rent Roll") prepared by Seller as of the
first day of the month in which this Agreement is executed, which shall
reflect:
1) the name of each of the Tenants under the Leases;
2) the amount of any prepaid rent received and held by Seller
from each Tenant, the amount of rent and reimbursable expenses payable
by each Tenant, and delinquencies, if any; and
3) the approximate total of square footage occupied by each
Tenant.
D) Tenant Deposits. A list of Tenant deposits held by Seller.
E) Sales Reports. If in Seller's possession, sales reports of tenant
for the period beginning on the date the first tenant opened for business
until November 30, 1997.
F) Tax Statements. The most recent real property tax bills for the
Property.
G) Schedule of Expenses. A schedule reflecting any and all expenses
for the ownership, operation, maintenance and repair of the Subject
Property by Seller for calendar year 1997, which schedule shall include,
without limitation, the following:
1) annual insurance premiums for all forms of coverage;
2) real property taxes and assessments;
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3) utility charges, management fees, maintenance and repair
costs; and
4) any and all other costs and expenses incurred in connection
with the ownership, operation, maintenance and repair of the Property.
H) Personal Property List. A detailed list of all Personal Property,
if any, to be assigned to Purchaser at Closing, together with a copy of all
warranties and guaranties applicable thereto.
I) Soils and Engineering Reports. All environmental reports, soils
reports and engineering reports pertaining to the Property or any portion
thereof in the possession of the Seller or its agents.
J) Maps. Any and all tentative, parcel and/or final maps, certificates
of occupancy or any other governmental approved or processed documents
relative to the subdivision or occupancy of the Property ("Maps").
K) Certificates of Occupancy. Copies of all Certificates of Occupancy
issued as of the Effective Date.
L) Warranties. All warranties within Seller's possession or control
which will survive Closing.
1.14 Future Leases.
After the date of this Agreement and until the earlier of the Closing Date
or the termination of this Agreement, Seller will not: (i) enter into any new
leases or options to lease with respect to the Real Property; (ii) negotiate
extensions or modifications of any Leases with respect to the Real Property;
(iii) accept a voluntary cancellation of any Lease; or (iv) consent to any
assignment of a Lease by a tenant, except as otherwise specifically provided
herein.
1.15 Operation of Real Property Prior to Closing.
Prior to the Closing, Seller shall maintain and operate the Real Property
as follows:
A) Seller, at its sole cost and expense, shall provide or cause to be
provided all such services with respect to the Leases that are required to
be provided by the Landlord under the Leases.
B) Seller will not make or permit to be made any material alteration
to the Real Property or remove any Personal Property therefrom (unless the
Personal Property so removed is
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simultaneously replaced with new Personal Property of similar quality and
utility).
C) Seller, at its sole cost and expense, will maintain and keep the
Subject Property in the same condition and repair as exists on the date of
this Agreement, reasonable wear and tear excepted.
D) Seller shall not commit any act or omission which would cause any
of the representations or warranties of Seller contained herein, to become
inaccurate or any of the covenants of Seller herein to be breached.
E) Seller shall not amend, terminate, grant concessions, or enter into
any contract that would be an obligation affecting the Real Property or be
binding on Purchaser after Closing.
ARTICLE II
CONDITIONS OF SALE
2.01 Initial Conditions.
Purchaser's obligation to purchase the Subject Property is subject to all
of the following conditions being either approved or waived by the Purchaser;
any approvals, disapprovals or waivers being made at Purchaser's option, in its
sole, absolute and unrestricted discretion:
A) Title Conditions. Purchaser's obligation to purchase the Property
is subject to Purchaser approving (or waiving) all title exceptions (other
than printed general exceptions) in the Title Commitment obtained by
Purchaser (referred to as "Title Matters") prior to Closing (the "Title
Period"). If Purchaser does not notify Seller of its approval or waiver of
the Title Matters within the Title Period, this condition shall be deemed
failed. Notwithstanding anything herein to the contrary, Seller shall cure
all Monetary Liens prior to Closing.
B) Physical Condition. Purchaser's obligation to purchase the Property
is conditioned upon Purchaser approving (or waiving) the physical condition
of the Property (including, but not limited to environmental matters). If
Purchaser does not notify Seller of its approval or waiver of the physical
condition, or notifies Seller of its disapproval prior to Closing, this
condition shall be deemed failed.
C) Lease Approvals. Purchaser's obligation to purchase the Property is
conditioned upon Purchaser approving all Tenant Leases, including, but not
limited to all terms and conditions thereof. If Purchaser does not notify
Seller of its
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approval or waiver of the Leases or notifies Seller of disapproval prior to
Closing, this condition shall be deemed failed.
D) Miscellaneous. Purchaser's obligation to purchase the Property is
conditioned upon the Purchaser being satisfied with respect to all other
matters pertaining to the Property, including, but not limited to physical
condition, all documents delivered by Seller to Purchaser pertaining to the
Property, zoning and economics of owning and operating the Property (the
"Miscellaneous Conditions"). If Purchaser does not notify Seller of its
approval or waiver of the Miscellaneous Condition or notifies Seller of its
disapproval prior to Closing, such condition shall be deemed failed.
2.02 Purchaser's Closing Conditions.
Purchaser's obligation to purchase the Subject Property is subject to the
following conditions being satisfied at the Closing, each of which is for the
benefit of Purchaser and any or all of which may be waived by Purchaser:
A) The Seller is not in breach of any covenants, warranties, or
representations under this Agreement.
B) At Closing, the Title Company is ready, willing, and able to issue
The Title Insurance Policy, in the amount of Twenty-three Million Nine
Hundred Seventy-five ($23,975,000) Dollars, insuring that fee title to the
Property is vested in the Purchaser (or its nominee) in such condition as
provided in Section 1.08(A); with the printed general exceptions of
Schedule B being deleted and containing the following endorsements:
(i) an endorsement regarding creditors rights in a form
acceptable to Purchaser;
(ii) an endorsement regarding mechanics liens in a form
acceptable to Purchaser;
(iii) CLTA Form 100 (modified for an owner) or its equivalent for
the State in which the Property is located;
(iv) CLTA Form 116 and 116.1 (referred to the ALTA Survey of the
Property) or its equivalent for the State in which the Property is
located;
(v) CLTA Form 103.7 (referring to access to public street) or its
equivalent for the State in which the Property is located; and
(vi) CLTA Form 116.4 (referred to contiguous parcels) or its
equivalent for the State in which the Property is located.
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(vii) CLTA Form 101.4 (regarding mechanic's liens for work in
progress).
C) Seller has delivered to Purchaser prior to the Closing, an original
Tenant's Estoppel Certificate in the form attached hereto as Exhibit D; with all
exhibits referred to therein duly attached; with no changes, additions or
modifications thereto, except for the insertion of missing information; and
dated no earlier than thirty (30) days prior to the Closing for each Lease, duly
executed by the Tenants under the Leases. Notwithstanding the foregoing, with
respect to any tenant leasing 10,000 square feet of space or less, if after
commercially reasonable efforts Seller is unable to obtain an Estoppel
Certificate from such a tenant, Seller shall have the right (without obligation)
to execute a Seller's Certificate, in the form attached hereto as Exhibit D-1,
and substitute the Seller Certificate in lieu of the required tenant Estoppel
Certificate. Further, if Seller or Purchaser subsequently obtains a
Tenant-executed Estoppel Certificate, then provided no material deviations or
discrepancies are disclosed thereon, it shall be substituted for the Seller
Certificate, which shall be returned to Seller. A breach of the Seller
Certificate shall entitle Purchaser to avail itself to the rights and remedies
provided in this Agreement.
D) By Closing, Purchaser shall be deemed to have waived any of the
conditions of Sections 2.01 and 2.02 or other conditions in this Agreement, not
otherwise satisfied.
2.03 No Waiver of Seller's Representations and Warranties.
Purchaser's waiver or approval of any conditions under Section 2.01 or 2.02
shall not alter or diminish Seller's express representations and warranties
herein, and Purchaser is nevertheless relying on Seller's representations and
warranties contained herein, unless such representation or warranty is
specifically waived in a written instrument executed by Purchaser.
2.04 Consideration - Satisfaction of Conditions.
In consideration of giving Purchaser the option to (a) approve or waive, or
(b) disapprove the conditions set forth in Section 2.01 and Section 2.02,
Purchaser shall pay to Seller the sum of One Hundred Dollars ($100.00). Such sum
shall be paid upon Closing and credited against the Purchase Price if this
transaction closes. If this transaction does not close, such sum shall be paid
to Seller from the Escrow Deposit upon termination of the escrow.
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ARTICLE III
ESCROW - CLOSING MATTERS
3.01 Escrow Holder.
This Agreement constitutes joint escrow instructions to the Escrow Agent,
instructing it to consummate this sale upon the terms and conditions set forth
in this Agreement.
3.02 Opening of Escrow.
As soon as practicable after the Effective Date, Seller and Purchaser shall
open an escrow with Escrow Agent and shall deposit with Escrow Agent a fully
executed counterpart of this Agreement for use as escrow instructions.
3.03 Purchaser's Funds - Interest-Bearing.
All Escrow Deposits shall be held in a federally insured interest-bearing
account, with all accrued interest credited to the account of the Purchaser
until Closing or termination of this Agreement, as the case may be. On any
occasion when Escrow Agent is required to pay funds from the Escrow Deposit to
either the Seller or Purchaser, it shall transmit such funds by check by United
States overnight express mail or, if so instructed by the party entitled to the
funds, by federal wire transfer.
3.04 Purchaser's Deliveries to Escrow.
Purchaser shall, on or before the Closing, deliver to Escrow Agent:
A) the balance of the Purchase Price pursuant to Section
1.03(B)(2) by wire transfer of U.S. Federal Funds, to be received in
Escrow Agent's trust account prior to 10:00 a.m., P.S.T. on the
Closing Date.
B) a signed list of title exceptions which Purchaser approves
pursuant to Section 2.01(A).
C) a signed statement from Purchaser that all conditions
precedent to Closing, as provided in Article II herein, either have
been satisfied or waived by Purchaser.
D) counterpart original of Assignment and Assumption of Leases,
duly signed and acknowledged by Purchaser in a form attached hereto as
Exhibit E.
E) Title Documents. Such affidavits of Purchaser, certificates of
value or other documents as may be reasonably
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required by Title Company in order to record the Seller's Closing
Documents and issue the Title Policy required by this Agreement.
F) Assumption of Declarant's Rights in the Declaration. An
Assumption of Declarant's Rights in the Declaration, in the form
attached hereto as Exhibit Q (the "Assignment of Declarant's
Interest").
3.05 Seller's Deliveries to Escrow.
Seller shall, on or before the Closing, deliver to Escrow Agent the
following documents (collectively, the "Seller's Closing Documents"):
A) the Deed, in the form attached hereto as Exhibit I, executed
and duly acknowledged by Seller and acceptable for recording.
B) the Xxxx of Sale and Assignment, duly executed by the Seller
in the form attached hereto as Exhibit F conveying all of Seller's
right, title and interest in and to any and all Personal Property,
Intangible Personal Property and any assignable warranties or permits
(however, any assignment of warranties shall nonetheless reserve for
Seller's benefit the right to enforce such warranties, in conjunction
with the limited construction warranty provided herein by Seller).
C) the original Leases (including all amendments), permits,
warranties and Building Plans.
D) a counterpart original of Assignment and Assumption of Leases,
duly signed and acknowledged by Seller in a form attached hereto as
Exhibit E.
E) such evidence or documents as may be reasonably required by
the title company evidencing the status and capacity of Seller and the
authority of the person or persons who are executing the various
documents on behalf of the Seller in connection with the sale of the
Property.
F) a copy of the Certification of Non-Foreign Status in the form
attached hereto as Exhibit H, executed by Seller.
G) a letter to all Tenants in the form attached hereto as Exhibit
G (the "Tenant Notification Letter") duly executed by Seller (which
shall be dated by the Escrow Agent as of the date of Closing).
H) original Certificates of Occupancy for all buildings which are
part of the Real Property.
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I) a proposed settlement statement (for Purchaser's review and
approval) which allocates rental income and any expenses to be
prorated.
J) a written statement from Seller disclosing the amount of
security deposits, the date for which rent has been paid by each
Tenant, and any rent or other receivables due from each Tenant.
3.06 Closing.
A) Closing under this Agreement shall take place on or before December 31,
1997 provided all of the conditions of Section 2.01 have been satisfied or
waived, subject to the Purchaser's closing conditions of Section 2.02.
B) Upon Closing, the Escrow Agent shall:
1) cause the Deed and Assumption of Leases to be recorded in the
County where the Property is located.
2) deliver to Purchaser the following documents:
(a) Title Insurance Policy.
(b) Assignment and Assumption of Leases.
(c) Xxxx of Sale.
(d) Original Leases.
(e) Assignment of Intangible Personal Property.
(f) Copy of signed Tenant Notification Letter.
(g) Certificates of Occupancy.
(h) Assignment of Declarant's Interest in the Declaration.
3) deliver to Seller originals of all documents of Closing, including:
(a) Assignment and Assumption of Leases.
(b) Non-Foreign Affidavit.
4) after all necessary prorations, adjustments, deductions, and
credits, as provided herein, disburse to Seller the balance of the Purchase
Price.
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3.07 Prorations.
A) Real Estate Taxes and Assessments.
1) All real and personal property taxes and current installments of special
assessments for the tax year in which the Closing occurs, levied or assessed
against the Property shall be prorated between Purchaser and Seller in a manner
to be mutually approved at Closing, based upon the latest tax bills, on a daily
basis as of the Closing Date. Seller shall remain liable for any supplemental
taxes, as contemplated pursuant to Section 1.08.A).
2) If, on the Closing Date, the Property or any part thereof shall be or
shall have been affected by an assessment or assessments which are or may be
payable in annual or more frequent installments of which the first installment
is then a charge or lien, or has been paid, then for the purpose of this
Agreement, all unpaid installments of any such assessment, which are to become
due and payable after Closing, shall be the obligation of the Purchaser, subject
to pro-rations under paragraph 1) above for the tax year in which the date of
Closing occurs.
B) Payments Under Leases.
1) Definitions. The following definitions shall apply under this paragraph
B).
(a) "Rentals" shall mean fixed monthly or other periodic rent
payments, percentage rent payments, rent increases, operating cost pass
throughs (including, but not limited to Triple Net Charges and all other
sums and charges payable by a tenant under a lease.
(b) "Delinquents Rentals" are rentals due on or before the Closing
Date, but not yet paid by Tenant.
(c) "Prepaid Rentals" shall mean Rental payments paid by Tenant on or
before the Closing Date to the extent attributable to periods after the
Closing Date.
(d) "Retroactive Rentals" shall mean operating cost pass throughs,
percentage rent and other charges accrued but not yet payable by the Tenant
to the extent attributable to periods prior to the Closing Date.
(e) "Security Deposits" shall mean all security deposits held by
Landlord under the Lease.
2) Pro-ration of Rentals and Tenant's Expenses.
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(a) Seller shall be entitled to all Rentals which accrue up to, but not
including the Closing Date (the "Seller's Share"). Purchaser shall be entitled
to all Rentals which accrue as of the date of Closing and thereafter (the
"Purchaser's Share").
(b) Purchaser shall receive a credit, at Closing, for all Prepaid Rentals
In calculating the prorations under sub-paragraphs (a) and (b) above, the
following shall apply:
(i) If a tenant has paid Seller Rentals for the cost of insurance
which insurance covers a period which includes the period beginning on the
date of Closing and thereafter, the Purchaser shall be entitled to a credit
for the pro rata portion of such Rentals computed on a daily basis for the
period beginning on the date of Closing and thereafter.
(ii) If a tenant has paid Seller Rentals for estimated common area
expenses during the year in which the Closing occurs and such tenant's
actual share of such expenses for such year up to and including the date
before the Closing is less than the Rental payments for estimated common
area expenses, then the Purchaser shall be entitled to a credit in the
amount of the difference. However, if such tenant's actual share of such
expenses for such year up to and including the day before the Closing is
more than the Rental payments for estimated common area expenses, the
Purchaser shall pay the Seller the amount of such difference, as a
Retroactive Rental under subparagraph (d) below.
(iii) If a tenant has paid Seller Rentals for real estate taxes,
assessments and similar charges (collectively the "Taxes"), during the year
in which the Closing occurs which Taxes cover a period which includes the
period beginning on the date of Closing and thereafter, the Purchaser shall
be entitled to a credit for a pro-rata portion of such Rentals computed on
a daily basis for the period beginning on the date of Closing and
thereafter.
(c) Seller shall not receive a credit, at Closing, for Seller's Share of
Delinquent Rentals. However, Purchaser shall pay to Seller, immediately,
Seller's Share of Delinquent Rentals, if and when collected by the Purchaser.
Purchaser shall have no liability or obligation to Seller with respect to
Seller's Share of Delinquent Rentals, unless same is collected by the Purchaser.
Seller is entitled to collect directly form the delinquent tenant, the Seller's
Share of Delinquent Rentals. Purchaser shall not compromise any of Seller's
rights to collect Seller's Share of Delinquent Rentals. Both Seller and
Purchaser shall cooperate in the collection of Delinquent Rentals.
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(d) Seller shall not receive a credit, at Closing, for Seller's Share of
Retroactive Rentals. However, Purchaser shall pay to Seller, immediately,
Seller's share of Retroactive Rentals, if and when collected by the Purchaser.
Purchaser shall have no liability or obligation to Seller with respect to
Seller's Share of Retroactive Rentals, unless same is collected by the
Purchaser. Seller is entitled to collect directly from the Tenant the Seller's
Share of Retroactive Rentals. Purchaser shall not compromise any of Seller's
rights to collect Seller's share of Retroactive Rentals. Both Seller and
Purchaser shall cooperate in the collection of Retroactive Rentals.
(e) Purchaser shall receive a credit, at Closing, for all Security
Deposits.
(f) Notwithstanding anything to the contrary in this Section 3.07.B)2), all
prorations of Triple Net Charges required as of the Closing Date shall be
reconciled by Seller and Purchaser outside of escrow within forty-five (45) days
after the Closing Date.
C) Utility Expenses. All utility charges for electricity, gas, sewer and
water, not directly metered to a tenant shall be pro-rated as of the Closing on
an accrual basis. Seller shall pay all such expenses which accrue up to and
including the day prior to the Closing and Purchaser shall pay all such expenses
on the day of Closing and thereafter. To the extent possible, Seller and
Purchaser shall obtain xxxxxxxx and meter readings for the Closing to aid in
such pro-rations.
3.08 Seller's Closing Costs.
Escrow Agent shall charge the Seller out of the Purchase Price: (a) the
cost of transfer taxes; (b) any amount due Purchaser resulting from prorations;
(c) release fees on any encumbrances; (d) one-half (1/2) of any escrow fee or
escrow termination charge; and (e) title insurance premiums for a CLTA title
insurance policy.
3.09 Purchaser's Closing Costs.
Purchaser shall pay for the following: (a) any amount due Seller resulting
from prorations; (b) one-half (1/2) of any escrow fee or escrow termination
charge; (c) deed recording fees; and (d) the amount by which the cost of an ALTA
extended coverage title insurance policy exceeds the cost of a CLTA title
insurance policy plus endorsements.
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3.10 Termination of Escrow.
In the event this Agreement is terminated, for any reason, Escrow Agent
shall deliver all documents and materials deposited by Seller, to the Seller,
and deliver to Purchaser all documents, materials, and funds deposited by
Purchaser; provided, however, Seller shall be paid from the Escrow Deposit, any
amount due under Section 1.12 and, in the event of Purchaser's default, Section
5.01.B) herein. The return of documents, materials, and funds, as
aforementioned, shall not affect the right of either party to seek such legal or
equitable remedies as such party may have with respect to the enforcement of
this Agreement. Upon failure of any condition under Section 2.01 or Section 2.02
herein, this Agreement shall be deemed terminated.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.01 Seller's Representations and Warranties.
A) In consideration of Purchaser's entering into this Agreement and as an
inducement to Purchaser to purchase the Property, Seller makes the following
representations and warranties, each of which is material and is being relied
upon by Purchaser (and the continued truth and accuracy of which shall
constitute a condition precedent to Purchaser's obligations hereunder):
1) Authority. Seller is a duly formed Minnesota corporation, formerly
known as Opus Southwest Corporation; Seller is duly qualified to transact
business in the State of California; Seller has the requisite power and
authority to enter into this Agreement and to execute and deliver Seller's
Closing Documents; this Agreement and Seller's Closing Documents shall have
been duly authorized by all necessary corporate action on the part of
Seller and shall have been duly executed and delivered as of the Closing
Date; the execution, delivery and performance by Seller of this Agreement
and Seller's Closing Documents will not conflict with or result in a
violation of Seller's articles of incorporation or by-laws or any judgment,
order, or decree of any court or arbiter to which Seller is a party; and
this Agreement and Seller's Closing Documents shall be valid and binding
obligations of Seller and enforceable in accordance with their terms.
2) Title to Subject Property. Based solely on Seller's existing policy
of title insurance for the Real Property, to the best of Seller's knowledge
Seller has good and marketable title to the Real Property.
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3) FIRPTA. Seller is not a "foreign person," "foreign partnership,"
"foreign trust" or "foreign estate" as those terms are defined in Section
1445 of the Internal Revenue Code.
4) Proceedings. To Seller's knowledge, there is no action, litigation,
investigation, condemnation or proceeding of any kind pending or to the
knowledge of Seller threatened against any portion of the Subject Property.
5) Contracts and Warranties. Except as provided herein, there are no
contracts for any service or maintenance, equipment leases or other
contracts for the operation of the Subject Property, entered into by Seller
("Contracts") affecting the Subject Property after the Closing, except the
Leases. There are no warranties affecting the Subject Property other than
Seller's warranty contained in Section 1.04(F) hereof, the Warranties
contained in the Leases and the Contracts, and third party warranties
received by Seller relating to the Subject Property. To Seller's knowledge,
there are no agreements with any third parties in connection with the
construction of the Subject Property, or the related offsite improvements,
which shall be binding upon Purchaser after Closing, or which shall
otherwise encumber the Subject Property.
6) Governmental Approvals. To Seller's knowledge, all Permits,
including, without limitation, all licenses, permits, approvals and
consents required in connection with the commencement of construction of
the Improvements to be constructed under the Leases and the construction
thereon performed to date, have been duly issued by the appropriate
governmental authorities.
7) Notices of Violation of Laws. To Seller's knowledge, Seller has not
received any written notice of any violation of any law, ordinance or
regulation at the Subject Property and Seller has not reason to believe
that any authority has issued or contemplates issuing any such written
notice.
8) Condemnation Proceedings. To Seller's knowledge, Seller has not
received any written notice of any condemnation or eminent domain
proceedings affecting the Real Subject Property, nor has Seller engaged in
any negotiations for the purchase of any of the Real Property in lieu of
condemnation, and no condemnation or eminent domain proceedings or
negotiations have been commenced or threatened in connection with the
Subject Property.
9) Violations of Encumbrances. To Seller's knowledge, Seller is not in
default of any of the terms or conditions of the documents listed on the
Title Commitment.
10) Compliance with Building Code. Seller has no knowledge of any
violation at the Subject Property of any
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applicable building codes as interpreted and enforced, as of December 28,
1997, by the governmental bodies having jurisdiction thereof.
11) Assessments. Except for increases in taxes due to construction of
the Improvements or items shown on the Title Commitment, Seller has not
received written notice and has no knowledge of any pending improvements,
liens, special assessments or special ad valorem taxes or evaluations to be
made against the Real Property by any governmental authority which are not
the obligations of the tenants, to the extent of such tenants' pro-rata
share thereof, under the Leases.
12) Environmental. Except as set forth in that Phase I Environmental
Site Assessment dated April, 1995, prepared by Xxxxxxx-Xxxx & Associates,
or any other written third party report received by Purchaser, to Seller's
knowledge, there is no violation of Environmental Laws related to the Real
Property or the presence or release of Hazardous Materials on or from the
Real Property. Seller has not manufactured, introduced, released or
discharged from or onto the Real Property any Hazardous Materials or any
toxic wastes, substances or materials (including, without limitation,
asbestos) in violation of any Environmental Laws, and Seller has not used
the Property or any part thereof for the generation, treatment, storage,
handling or disposal of any Hazardous Materials in violation of any
Environmental Laws. The term "Environmental Laws" includes without
limitation the Resource Conservation and Recovery Act and the Comprehensive
Environmental Response Compensation and Liability Act and other federal
laws governing the environment as in effect on the Date of this Agreement
together with their implementing regulations and guidelines as of the Date
of this Agreement, and all state, regional, county, municipal and other
local laws, regulations and ordinances that are equivalent or similar to
the federal laws recited above or that purport to regulate Hazardous
Materials. The term "Hazardous Materials" includes petroleum, including
crude oil or any fraction thereof, natural gas, natural gas-liquids,
liquidated natural gas, or synthetic gas usable for fuel (or mixtures of
natural gas or such synthetic gas), and any substance, material waste,
pollutant or contaminant listed or defined as hazardous or toxins under any
Environmental Law.
13) Utilities. Seller has received no written notice of actual or
threatened reduction or curtailment of any utility service now supplied to
the Real Property. The utilities reasonably required to satisfy the
obligations of "landlord" in each of the Leases are available and connected
to the Real Property.
14) Leases. To Seller's actual knowledge, no tenants have asserted,
nor are there any, defenses or offsets to
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rent currently accruing. Seller has not received any notice of default or
breach on the part of the landlord under any Lease.
B) Seller's Knowledge. For purposes of the foregoing representations
and warranties, Seller's knowledge shall be limited to the actual knowledge
without inquiry or independent investigation of any one of the following
persons: Xxxxxx X. Xxxxxxx, Xxxxxxx X. Xxxxx, Xxxx X. Xxxxx, Xxxxxx X.
X'Xxxxxx and Xxxx Xxxx, each of whom has been employed continuously with
the Seller (or an affiliate thereof) since Seller first acquired the Real
Property.
C) Change in Representations. The representations of Seller set forth
above in paragraph (A) are made as of the date of execution of this
Agreement and are intended to be true and correct as of the Closing. If,
subsequent to the date of this Agreement and prior to the date of Closing,
either Purchaser or Seller determines that, as a result of facts or
subsequent events discovered or arising after execution of this Agreement,
any of such representations are no longer true and correct as of such
subsequent date, Seller shall not be in breach of this Agreement, provided
that the determining party shall promptly and at least one (1) business day
prior to Closing deliver notice to the other party in writing ("Change
Notice") of such facts or subsequent events and the effect on the
applicable representation. Seller shall have the option, but not the
obligation, to take steps to cure or correct the situation so that the
affected representation will be true and correct as of the Closing, and, if
Seller exercises such option, Seller shall identify the corrective action
in the Change Notice. If Seller elects to undertake corrective action such
that the affected representation will be true and correct as of the
Closing, the parties shall proceed with performance under this Agreement
and the Closing, provided Seller completes such corrective action prior to
the Closing. If Seller does not elect in the Change Notice to undertake
such corrective action, then, within one (1) day after Purchaser's receipt
of the Change Notice, but in no event later than the Closing Date,
Purchaser shall elect, by delivering written notice to the Seller either
to: (1) proceed with performance of this Agreement and the Closing; or (2)
terminate this Agreement and the Escrow for non-satisfaction of a
condition. In the event of termination pursuant to this Section, the Escrow
Deposit shall be returned to Purchaser and neither party shall have any
further obligation hereunder. For purposes of the foregoing, Purchaser
shall not be deemed to have discovered a fact, unless Xxx Xxxxxxx, Xxxx
Xxxxxx or Xxx Xxxx have knowledge of such fact.
D) Limitation of Seller's Warranties. Seller does not, by the
execution and delivery of this Agreement and Seller shall not, by the
execution and delivery of any document or instrument executed and delivered
in connection with the Closing, make any warranty, express or implied, of
any kind or any nature whatsoever, with respect to the Subject Property,
and all such warranties are
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hereby disclaimed, except as set forth in this Agreement, the Grant Deed,
the Seller's Certificates, the Seller's Phase II Certificates, and the
Seller's Closing Documents. Subject to the foregoing, Seller makes, and
shall make, no express or implied warranty of suitability or fitness of the
Subject Property for any purpose, or as to the merchantability, title,
value, quality, condition or salability of any of the Subject Property. The
sale of the Subject Property by Seller to Purchaser shall be "AS IS" and
"WHERE IS" and, except as otherwise provided in this Agreement, the Grant
Deed, the Seller's Certificates, the Seller's Phase II Certificates, and
the Seller's Closing documents, Purchaser is relying solely on the Title
Policy as to title matters and the results of its tests and inspections as
to the physical condition of the Real Property. Seller will indemnify
Purchaser, its successors and assigns, against, and will hold Purchaser,
its successors and assigns, harmless from, any expenses or damages,
including reasonable attorneys' fees, that Purchaser incurs because of the
breach of any of the above representations and warranties, as such
representations and warranties may be changed or amended pursuant to
paragraph (C) above, whether discovered before or after Closing. Purchaser
acknowledges that the Project is within the City of Roseville North Central
Community Facilities District No. 1 (the "CFD") and agrees that the
property will be acquired subject to the CFD and the lien of special taxes
that may be levied by the CFD now or in the future. Purchaser acknowledges
receipt of a Notice of Special Tax in the form required by the California
Government Code Section 53341.5 at least three (3) days prior to the date
of this Agreement.
PURCHASER HEREBY ACKNOWLEDGES THAT IT HAS READ AND IS FAMILIAR WITH THE
PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542 ("SECTION 1542"), WHICH IS SET
FORTH BELOW:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASE WHICH IS KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR."
BY INITIALING BELOW, PURCHASER HEREBY WAIVES THE PROVISIONS OF SECTION 1542
SOLELY IN CONNECTION WITH THE MATTERS WHICH ARE THE SUBJECT OF THE WAIVERS AND
RELEASES SET FORTH IN THIS PARAGRAPH (D).
PURCHASER'S INITIALS: /s/ JM SELLER'S INITIALS: /s/ TWR
----------- ------------
Seller makes no representation or warranty concerning the accuracy or
completeness of any existing reports relating to the Subject Property and
delivered to Purchaser (collectively the "Existing Reports"). Purchaser hereby
releases Seller from any liability whatsoever with respect to the Existing
Reports, including, without limitation, the matters set forth in the
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Existing Reports and the accuracy and/or completeness of the Existing Reports.
Purchaser acknowledges that it will be purchasing the Property with all faults
disclosed in the Existing Reports.
4.02 Representations and Warranties by Purchaser. Purchaser represents and
warrants to Seller that Purchaser is duly incorporated and is in good standing
under the laws of the State of Delaware, and is qualified to do business and is
in good standing in the State of California; Purchaser has the requisite
corporate power and authority to enter into this Agreement and to execute and
deliver Purchaser's Closing Documents; such documents shall have been duly
authorized by all necessary corporate action on the part of Purchaser and shall
have been duly executed and delivered as of the Closing Date; the execution,
delivery and performance by Purchaser of such documents shall not conflict with
or result in violation of Purchaser's articles of incorporation or bylaws or any
judgment, order or decree of any court or arbiter to which Purchaser is a party;
and such documents shall be valid and binding obligations of Purchaser and
enforceable in accordance with their terms. Purchaser will indemnify Seller, its
successors and assigns, against, and will hold Seller, its successors and
assigns harmless from, any expenses or damages, including reasonable attorney's
fees, that Seller incurs because of the breach of any of the above
representations and warranties, whether such breach is discovered before or
after Closing.
ARTICLE V
REMEDIES
5.01 Failure to Close Escrow Due to Default.
A) Default by Seller. IF THIS SALE IS NOT COMPLETED BECAUSE OF SELLER'S
DEFAULT, PURCHASER'S SOLE REMEDY SHALL BE THE RETURN OF THE ESCROW DEPOSIT
TOGETHER WITH ANY INTEREST ACCRUED THEREON. THIS AGREEMENT SHALL THEN BECOME
NULL AND VOID AND OF NO EFFECT AND THE PARTIES SHALL HAVE NO FURTHER LIABILITY
OR OBLIGATIONS HEREUNDER EXCEPT FOR PURCHASER'S OBLIGATIONS TO INDEMNIFY SELLER
AND RESTORE THE PROPERTY AS MORE FULLY SET FORTH IN SECTION 1.12.
NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY, IF SELLER'S DEFAULT
IS ITS REFUSAL TO DELIVER THE SELLER'S CLOSING DOCUMENTS, THEN PURCHASER WILL BE
ENTITLED TO XXX FOR SPECIFIC PERFORMANCE. NOTWITHSTANDING THE FOREGOING, IN THE
EVENT SELLER REFUSES TO DELIVER SELLER'S CLOSING DOCUMENTS TO CONSUMMATE THE
SALE, THEN SELLER SHALL BE LIABLE TO PURCHASER FOR ITS REASONABLE AND NECESSARY
DUE DILIGENCE EXPENSES, WHICH THE PARTIES AGREE SHALL BE FIXED IN AMOUNT AS
LIQUIDATED DAMAGES AT FIFTY THOUSAND AND 00/100 DOLLARS ($50,000.00).
PURCHASER'S INITIALS: /s/ JM SELLER'S INITIALS: /s/ TWR
----------- -----------
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B) Default by Purchaser. IN THE EVENT OF A DEFAULT OF THE PURCHASER TO
CLOSE UNDER THE PROVISIONS OF THIS AGREEMENT, SELLER SHALL RETAIN OUT OF THE
ESCROW DEPOSIT AN AMOUNT EQUAL TO ITS REASONABLE AND NECESSARY OUT-OF-POCKET
EXPENSES INCURRED IN REGARD TO THIS AGREEMENT, WHICH THE PARTIES HEREBY AGREE
SHALL BE FIXED AS LIQUIDATED DAMAGES AT FIFTY THOUSAND AND 00/100 DOLLARS
($50,000.00), AS SELLER'S SOLE RIGHT TO DAMAGES OR ANY OTHER REMEDY, EXCEPT FOR
PURCHASER'S OBLIGATIONS TO INDEMNIFY SELLER PURSUANT TO SECTION 1.12 HEREOF. THE
PARTIES HAVE AGREED THAT SELLER'S ACTUAL DAMAGES, IN THE EVENT OF A DEFAULT BY
PURCHASER, WOULD BE EXTREMELY DIFFICULT OR IMPRACTICAL TO DETERMINE. THEREFORE,
BY PLACING THEIR INITIALS BELOW, THE PARTIES ACKNOWLEDGE THAT THE FIFTY THOUSAND
AND 00/100 DOLLARS ($50,000.00) LIQUIDATED DAMAGES HAS BEEN AGREED UPON, AFTER
NEGOTIATION, AS THE PARTIES' REASONABLE ESTIMATE OF SELLER'S DAMAGES.
PURCHASER'S INITIALS: /s/ JM SELLER'S INITIALS: /s/ TWR
----------- -----------
5.02 Defaults - Other Than Failure to Close Escrow.
A) In the event Seller defaults with respect to any of its covenants,
representations or warranties contained in this Agreement and any instruments
delivered by Seller to Purchaser, other than a default in failing to close
escrow, for which remedy is provided in Section 5.01(A) herein, the Purchaser
shall be entitled to all rights and remedies, at law and equity as provided
under law.
B) In the event Purchaser defaults with respect to any of its covenants,
representations, or warranties contained in this Agreement or any documents
delivered by Purchaser to Seller, other than a default in failing to close
escrow, for which a remedy is provided in Section 5.01(B) the Seller shall be
entitled to all rights and remedies, at law and equity as provided under law.
5.03 Curing Default.
In the event of a default by either party, the other party shall not be
entitled to exercise any remedy for such default unless a notice of default is
sent to the defaulting party and the defaulting party fails to cure such default
within seven (7) days after receipt of such notice of default.
5.04 Indemnity.
Each party agrees to indemnify and hold harmless the other for expenses,
liabilities, costs, claims, damages and attorneys' fees (collectively, a
"Claim") asserted by a third party against the other party, arising (x) from
such indemnifying party's negligent acts or omissions, (y) during the period of
ownership of the Subject Property, by the indemnifying party, or (z) from a
breach of this Agreement (including the representations and
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warranties herein) by the indemnifying party. Notwithstanding the foregoing, no
party shall have any obligation to indemnify the other for any contingent,
speculative or consequential damages, or for defaults under this Agreement for
which a specific remedy is provided (including, without limitation, under
Sections 1.04.F), and 5.01). Further, Seller shall have no obligation or
liability to Purchaser as contemplated under the first sentence of this Section
5.04, for any Claim which is based on the condition of title or the condition of
the Subject Property, including in regard to Hazardous Materials or workmanship
or design of the Improvements, except to the extent of a breach of the
applicable covenants, representations or warranties herein.
ARTICLE VI
MISCELLANEOUS
6.01 Damage to Property. Until Closing, the risk of loss or damage to the
Real Property or any portions thereof by fire, casualty, or any other cause, is
assumed by Seller. If, prior to the Closing, all or any part of the Real
Property is substantially damaged by fire, casualty, the elements or any other
cause, Seller shall immediately give notice to Purchaser of such fact and at
Purchaser's option (to be exercised within thirty (30) days after Seller's
notice), this Agreement shall terminate, in which event neither party will have
any further obligations under this Agreement and the Escrow Deposit shall be
refunded to Purchaser. If Purchaser fails to elect to terminate despite such
damage, or if the Subject Property is damaged but not substantially, Seller
shall promptly commence to repair such damage or destruction and return the
Subject Property to its condition prior to such damage. If such damage shall be
completely repaired prior to Closing then there shall be no reduction in the
Purchase Price and Seller shall retain the proceeds of all insurance related to
such damage. If such damage shall not be completely repaired prior to the
Closing but Seller is diligently proceeding to repair, then Seller shall
complete the repair after the Closing and shall be entitled to receive the
proceeds of all insurance related to such damage after repair is completed;
provided, however, Purchaser shall have the right to delay the Closing until
repair is completed. If Seller shall fail to diligently proceed to repair such
damage, then Purchaser shall have the right to require the Closing to occur and
the Purchase price shall be reduced by the cost of such repair, or at
Purchaser's option, Seller shall assign to Purchaser all right to receive the
proceeds of all insurance related to such damage and the Purchase Price shall
remain the same. For purposes of this Section, the words "substantially damaged"
means damage that would cost Thirty Five Thousand ($35,000.00) Dollars or more
to repair.
6.02 Condemnation. If, prior to the Closing Date, eminent domain
proceedings are commenced against all or any part of the Subject Property,
Seller shall immediately give notice to Purchaser
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of such fact and at Purchaser's option (to be exercised within 30 days after
Seller's notice), this Agreement shall terminate, in which event neither party
will have further obligations under this Agreement and the xxxxxxx money,
together with any accrued interest, shall be refunded to Purchaser. If Purchaser
shall fail to give such notice, then there shall be no reduction in the Purchase
Price and Seller shall assign to Purchaser at the Closing Date all of Seller's
right, title and interest in and to any award made or to be made in the
condemnation proceedings. Prior to the Closing Date, Seller shall not designate
counsel, appear in, or otherwise act with respect to the condemnation
proceedings without Purchaser's prior written consent.
6.03 Notices.
All waivers, elections, options, notices, demands, and consents which
either party may be required or may desire to give under this Agreement
("Notice") shall be in writing and shall be effective when telecopied to the fax
numbers indicated below, when personally delivered, or when deposited in an
official United States Postal Service office or branch or official depository
maintained by the United States Postal Service, by certified or registered mail,
postage prepaid, return receipt requested, addressed as follows:
To Purchase at: PRICE ENTERPRISES, INC.
Attn: Xxxxxx X. Xxxx, Esq.
0000 Xxxxxx Xxxx.
Xxx Xxxxx, XX 00000
FAX (000) 000-0000
With a copy to: Price Enterprises, Inc.
Attn: Xxxxxx Xxxxxxx
0000 Xxxxxx Xxxx.
Xxx Xxxxx, XX 00000
FAX (000) 000-0000
To Purchaser at: OPUS WEST CORPORATION
Attn: Xxxxxx X. Xxxxxxx &
Xxxxxxx X. Xxxxx
0000 Xxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
FAX (000) 000-0000
with a copy to: OPUS PROPERTIES, L.L.C.
Attn: Xxxx X. Xxxx
700 Opus Center
0000 Xxxxx Xxxx Xxxx
Xxxxxxxxxx, XX 00000
FAX (000) 000-0000
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with a copy to: OPUS U.S. CORPORATION
Attn: Xxxxxx X. Xxxx, Esq.
0000 Xxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
FAX (000) 000-0000
with a copy to: XXXXXXXXX & XXXXXXX, P.A.
Attn: Xxxxx X. Xxxxxx
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
FAX (000) 000-0000
or such other address as either party may hereafter indicate by written notice
to the other.
Notice also may be given by Fed Ex or other overnight courier service, in
which event such Notice shall be deemed given on delivery to such courier
service.
6.04 Certification of Non-Foreign Status.
Before Closing, Seller shall deliver to Escrow Agent a Non-Foreign
Affidavit duly executed in the form attached hereto as Exhibit H.
6.05 Attorneys' Fees.
If either party hereto files any action or brings any proceeding against
the other arising out of this Agreement, or is made a party to any action or
proceeding brought by the Escrow Agent, then as between Purchaser and Seller,
the prevailing party shall be entitled to recover as an element of its costs of
suit, and not as damages, reasonable attorneys' fees to be fixed by the court.
The "prevailing party" shall be the party who is entitled to recover its costs
of suit, whether or not suit proceeds to final judgment. A party not entitled to
recover costs shall not be entitled to recover attorneys' fees.
6.06 Brokers.
Seller and Purchaser each represent to the other that neither has nor shall
have any obligation to any broker or finder in connection with this transaction,
and that no fee or commission is due any broker, finder, or similar person in
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connection herewith other than Xxxxxxxxx & Associates (the "Broker"). The
Purchaser shall pay any fee due the Broker pursuant to a separate agreement
between Seller and Broker. Seller and Purchaser each indemnifies the other and
agrees to hold the other harmless from and against any and all claims, demands,
liabilities, lawsuits, costs, and expenses (including reasonable attorneys'
fees) for any fee or commission due to any other broker, finder, or similar
person in connection with this transaction and arising out of the act of the
indemnifying party.
6.07 Integration.
This Agreement and the exhibits attached hereto shall constitute the entire
Agreement between Seller and Purchaser and supersede any and all prior written
or oral agreements, representations, and warranties between and among the
parties and their agents, all of which are merged into or revoked by this
Agreement, with respect to its subject matter.
6.08 Modification.
No modification, waiver, amendment, discharge, or change of this Agreement
shall be valid unless the same is in writing and signed by the party against
which the enforcement of such modification, waiver, amendment, discharge, or
change is or may be sought.
6.09 Severability.
In the event any term, covenant, condition, provision, or agreement
contained herein is held to be invalid, void, or otherwise unenforceable, by any
court of competent jurisdiction, such holding shall in no way affect the
validity or enforceability of any other term, covenant, condition, provision, or
agreement contained herein.
6.10 Governing Law.
This Agreement and the obligation of the parties hereunder shall be
interpreted, construed, and enforced in accordance with the laws of the State of
California.
6.11 Terminology.
All personal pronouns used in this Agreement, whether used in the
masculine, feminine, or neuter gender, shall include all other genders; the
singular shall include the plural and vice versa. "Business Day" means other
than Saturday, Sunday, or holiday. In the event that the time for performance of
an act under this Agreement falls on a Saturday, Sunday, or holiday, the date
for performance of such act shall be extended to the next business day.
6.12 Counterparts.
This Agreement may be executed in multiple counterparts, each of which
shall be deemed to be an original agreement, and all of which shall constitute
one agreement by each of the parties hereto to be effective as of the Effective
Date.
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6.13 Binding Effect.
Except as otherwise herein provided, this Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns.
6.14 Assignment.
Either Seller or the Purchaser may at any time, prior to Closing, assign
its rights and obligations under this Agreement, provided such assignment shall
not relieve the assignor of its obligations herein and no assignment shall be
effective, unless notice is given to the other party herein.
6.15 Survival of Provisions.
All covenants, representations and warranties herein are specifically
intended to survive Closing.
6.16 Captions.
Article and section titles or captions contained herein are inserted as a
matter of convenience and for reference, and in no way define, limit, extend, or
describe the scope of this Agreement or any provisions hereof. All reference to
section numbers herein shall mean the sections of this Agreement.
6.17 Exhibits.
The following exhibits are attached hereto:
Exhibit A - Legal Description of Property
Exhibit B - Site Plan of Real Property
Exhibit C - List of Current Leases
Exhibit D - Form of Tenant Estoppel Certificate
Exhibit D-1 - Seller's Certificate
Exhibit E - Form of Agreement for Assignment and
Assumption of Leases
Exhibit F - Form of Xxxx of Sale and Assignment
Exhibit G - Form of Tenant Notification Letter
Exhibit H - Form of Non-Foreign Affidavit
Exhibit I - Form of Deed
Exhibit J - Form of Standard Lease
Exhibit K - Outline Specifications for Vanilla
Shell
Exhibit L - Notice of Special Tax
Exhibit M - [Intentionally Omitted]
Exhibit N - Access Easement Agreement
Exhibit O - Tenant Phase II Estoppel Certificate
Exhibit O-1 - Seller's Phase II Estoppel Certificate
Exhibit P - List of Replacement Tenants
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Exhibit Q - Form of Assignment of Declarant's Interest
6.18 Offer and Acceptance.
Seller's signature on this instrument constitutes an offer to sell the
Property to the Purchaser on the terms and conditions set forth herein. This
Agreement shall be binding upon the parties only upon the mutual execution
hereof, and the date of such execution shall be referred to herein as the
"Effective Date".
6.19 Access Easement.
Upon request from Seller given no later than 5 years after the Closing
Date, Purchaser agrees, as long as it owns the Subject Property, to execute and
grant a reciprocal, non-exclusive access easement (the "Access Easement") to
traverse Five Star Boulevard for the benefit of Seller, its affiliates, and
their respective agents, tenants, invitees and guests of the Adjacent Parcel
located west of, and immediately adjacent to, the Land, provided Seller is the
fee owner of such Adjacent Parcel. The form and substance of the Access Easement
is attached as Exhibit N. The foregoing shall not be deemed to restrict
Purchaser from entering into easement agreements with any other adjacent
property owner.
6.20 Xxxxx-Xxxx Notice.
Attached as Exhibit "L" hereto is a Notice of Special Tax, regarding the
community facilities district affecting the Subject Property. No less than three
(3) days prior to Closing, Purchaser shall execute two (2) original copies of
said Notice and deliver same to Seller.
6.21 Copies of Agreement.
A photocopy or facsimile copy of this Agreement duly executed by both
parties shall be valid and binding upon the parties and shall be treated as if
the document was an original executed counterpart. The parties shall promptly
forward executed originals to the other party.
[Signatures appear on next page]
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Executed as of the date first written above.
SELLER PURCHASER
PRICE ENTERPRISES, INC. OPUS WEST CORPORATION
By: /s/ Xxxx McGroroy By: /s/ Xxxxxx X. Xxxxxxx
----------------------- -------------------------
Xxxx McGroroy Xxxxxx X. Xxxxxxx
Its: CEO Its: President
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