PURCHASE AND SALE AGREEMENT
Between
CORPORATE REALTY INCOME FUND I, L.P.
(Seller)
and
PACIFIC GULF PROPERTIES INC.
(Purchaser)
Location: Xxxxx River Building
0000 Xxxxxxxxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx
Dated as of February 5, 1997
PURCHASE AND SALE AGREEMENT
TABLE OF CONTENTS
Page
----
1. PURCHASE AND SALE........................................... 1
1.1 Property......................................... 1
1.2 Assignment....................................... 2
2. PURCHASE PRICE.............................................. 3
2.1 Deposit.......................................... 3
2.2 Interest......................................... 3
2.3 Credit........................................... 3
2.4 Cash at Closing.................................. 4
3. TITLE ................................................. 4
3.1 Title Report; Survey............................. 4
3.2 Review of Title.................................. 4
3.3 Vesting of Title................................. 6
3.4 Title Insurance.................................. 6
3.5 Inspection Period................................ 6
3.6 Furnishing of Information........................ 8
3.7 Consideration.................................... 10
4. CLOSING..................................................... 11
4.1 Closing.......................................... 11
4.2 Transactions at Closing.......................... 11
4.3 Title Transfer and Payment of
Purchase Price................................... 14
4.4 Reporting Requirements........................... 16
5. PRORATIONS; CLOSING ITEMS................................... 16
5.1 Prorations; Closing Costs........................ 16
5.2 Calculation of Prorations........................ 19
6. REPRESENTATIONS AND WARRANTIES.............................. 20
6.1 Seller's Representations and
Warranties....................................... 20
6.2 Purchaser's Representations and
Warranties....................................... 23
6.3 Purchaser Accepts Property ("As Is")............. 24
7. CONDITIONS AT CLOSING....................................... 27
7.1 Seller's Conditions.............................. 27
7.2 Purchaser's Conditions........................... 28
7.3 Failure of Condition............................. 29
8. DAMAGE OR DESTRUCTION OF THE PROPERTY;
CONDEMNATION................................................ 31
8.1 Damage or Destruction of the Property............ 31
8.2 Condemnation..................................... 32
9. COMMISSIONS AND EXPENSES.................................... 33
9.1 Payment of the Sale Commission................... 33
9.2 Maintenance of the Property; Property
Personnel ....................................... 33
9.3 Leasing; Contracts............................... 34
10. NOTICES...................................................... 34
11. MISCELLANEOUS............................................... 35
11.1 Time .................................................. 35
11.2 Attorney's Fees ....................................... 35
11.3 No Waiver ............................................. 35
11.4 Entire Agreement ...................................... 36
11.5 Survival .............................................. 36
11.6 Successors ............................................ 36
11.7 Assignment ............................................ 36
11.8 Relationship of the Parties ........................... 37
11.9 Governing Law ......................................... 37
11.10 Possession; Risk of Loss .............................. 37
11.11 Review by Counsel ..................................... 37
11.12 Confidentiality ....................................... 37
11.13 Termination ........................................... 39
11.14 Waiver of Jury Trial .................................. 40
11.15 Counterparts .......................................... 40
11.16 Limitation on Liability ............................... 40
11.17 Partial Invalidity .................................... 40
11.18 Construction........................................... 41
12. LIQUIDATED DAMAGES........................................... 41
(ii)
13. NO RECORDING................................................. 42
14. EFFECTIVENESS................................................ 42
15. TAX-DEFERRED EXCHANGE........................................ 42
16. RIGHT OF FIRST OFFER......................................... 42
17. REIT........................................................ 43
EXHIBIT A
EXHIBIT B
EXHIBIT C
EXHIBIT D
EXHIBIT E
EXHIBIT F
EXHIBIT G
EXHIBIT H
EXHIBIT I
EXHIBIT J
EXHIBIT K
EXHIBIT L
EXHIBIT M
(iii)
PURCHASE AND SALE AGREEMENT
This Purchase and Sale Agreement ("Agreement") is made as of the 5th day of
February 1997 (the "Effective Date") by and between CORPORATE REALTY INCOME FUND
I, L.P., a Delaware limited partnership ("Seller") and PACIFIC GULF PROPERTIES
INC., a Maryland corporation ("Purchaser").
A. Seller owns in fee simple that certain parcel of real property located
in the City of Woodland, County of Yolo, State of California commonly referred
to as the Xxxxx River Building located at 0000 Xxxxxxxxx Xxxxx Xxxxxx, xx
Xxxxxxxx, Xxxxxxxxxx, and easements as to certain additional parcels in the City
of Woodland, County of Yolo, State of California (hereinafter collectively
referred to as the "Real Property").
B. Subject to the terms and conditions herein, Seller desires to sell and
Purchaser desires to purchase the Real Property and certain items of personal
property.
NOW THEREFORE, in consideration of the mutual covenants contained herein,
Seller and Purchaser agree as follows:
1. PURCHASE AND SALE
1.1. Property.
Subject to the terms and conditions hereof, Seller hereby agrees to sell,
convey and assign to Purchaser, and Purchaser hereby agrees to purchase and
accept from Seller on the Closing Date (as defined in Section 4.1 below) the
following (collectively, the "Property"):
(a) the Real Property, which is legally described on Exhibit A attached
hereto, together with any and all rights, privileges and easements
appurtenant thereto, which are owned by Seller;
(b) all buildings located on the Real Property, and all other improvements
and fixtures located on the Real Property which are owned by Seller,
if any, including any apparatus, equipment and appliances
incorporated therein and used in connection with the operation and
occupancy thereof, such as heating and air conditioning systems and
facilities used to provide any utility service, ventilation, or other
services thereto but excluding fixtures owned by tenants (all of which
are collectively referred to as the "Improvements");
(c) all right, title and interest of Seller in and to personal property
located on the Real Property and Improvements (the "Personal
Property"); and
(d) all assignable or transferable intangible property, including, but not
limited to: (i) all guaranties, warranties (including guaranties and
warranties pertaining to construction of the Improvements); (ii) all
air rights, excess floor area rights and other development rights
relating or appurtenant to the Real Property or the Improvements;
(iii) all rights to obtain utility service in connection with the
Improvements and the Real Property; (iv) assignable licenses and other
governmental permits and permissions relating to the Real Property,
the Improvements and the operation thereof; and (v) all assignable
contracts and contract rights (all of the foregoing are hereinafter
collectively referred to as the "Intangible Property").
(e) All right, title and interest of Seller in and to that certain lease
dated August, 1986 by and between Panattoni, Xxxxx and Xxxxxx
Development Company, as landlord, and Crown Zellerbach, as tenant, as
amended by amendment dated October 1, 1993, to the extent in effect on
the Closing Date (the "Lease"), together with all rents and other sums
due thereunder and any and all security deposits in connection
therewith.
1.2 Assignment.
In addition, Seller shall assign to Purchaser all interest of Seller as
landlord in and to the Lease pertaining to the Real Property and Improvements as
more
-2-
specifically set forth on Schedule B to the Assignment and Assumption Agreement,
as hereinafter defined in Section 4.2(a)(iii) and in and to any equipment
leases, commission agreements, and service contracts, as set forth on Schedules
C, D and E, respectively, to the Assignment and Assumption Agreement.
2. PURCHASE PRICE
Purchaser shall pay as the total Purchase Price for the Property ("Purchase
Price") the amount of Twelve Million Eight Hundred Seventy-Five Thousand and
No/100ths U.S. Dollars ($12,875,000.00) which shall be payable as follows:
2.1 Deposit.
Concurrently with the execution and delivery of this Agreement, Purchaser
has caused Three Hundred Thousand No/100ths U.S. Dollars ($300,000.00) (the
"Deposit") to be delivered by wire transfer to Escrow Holder (as hereinafter
defined). The Deposit shall be held in an interest bearing account as an xxxxxxx
money deposit toward the Purchase Price. Purchaser will provide Escrow Holder
with its Taxpayer Identification Number and such additional information and
documents as may be required by Escrow Holder.
2.2 Interest.
Except as provided in Section 2.1 above and in other provisions of this
Agreement where Seller shall be entitled to retain the Deposit and all interest
earned thereon as liquidated damages pursuant to Section 12 below, interest on
the Deposit shall accrue to the benefit of Purchaser. The Deposit (and interest
thereon) shall be applied against the Purchase Price.
2.3 Credit.
Anything herein to the contrary notwithstanding, the parties acknowledge
that certain items of deferred maintenance are required with respect to the
Property, all as more specifically set forth in a certain proposal of PCM
Builders, Inc. dated November 21, 1997 addressed to Xx. Xxx Xxxxxxxxxxx of PDC
Properties, Inc. (the "PCM Proposal"), a copy of which is attached hereto as
Exhibit K. The parties agree that in connection with the Closing, Purchaser
shall receive a credit toward the
-3-
Purchase Price of One Hundred Thirty-One Thousand Nine Hundred Ninety Eight
($131,998.00) Dollars.
2.4 Cash at Closing.
Twelve Million Four Hundred Forty-Three Thousand Two and No/100ths U.S.
Dollars ($12,443,002.00) adjusted for interest earned on the Deposit plus any
other amounts required to be paid by Purchaser at Closing, and plus or minus any
prorations, in the form of immediately available U.S. funds, shall be paid by
Purchaser into escrow with the Escrow Holder, as defined in Section 4.1, in time
to allow the Closing to occur on the Closing Date (as hereinafter defined) by
wire transfer as more particularly set forth in Section 4.3 below.
3. TITLE
3.1 Title Report; Survey.
Purchaser acknowledges and agrees that Seller has furnished to Purchaser
prior to the Effective Date, the following:
(a) A preliminary title report (the "Title Report"), issued by Chicago
Title Insurance Company ("Title Company") covering the Real Property
and Improvements, with such Title Report setting forth the status of
the title to the Property and showing all liens, claims, encumbrances,
easements, rights-of-way, encroachments, reservations, restrictions
and any other matters of record affecting the Property.
(b) A copy of all recorded documents referred to in the Title Report as
exceptions to title to the Property (the "Title Documents").
(c) A copy of the survey of the Real Property and Improvements in Seller's
possession ("Survey").
3.2 Review of Title.
Purchaser shall have until February 21, 1997 (the "Title Approval Date") to
review the Title Report, Title Documents and Survey (collectively, "Title
Evidence") and render any objections as to matters of title i
-4-
writing to Seller. Any such matters of title not timely objected to by Purchaser
shall be deemed waived and Purchaser shall be deemed to agree to acquire the
Property subject to such exceptions (collectively, "Permitted Exceptions")
hereunder. Seller, in its sole and absolute discretion, may elect to remove or
satisfy any such objections, provided that Seller shall have until February 26,
1997 to have such objections that Seller so elects removed or satisfied. Subject
to Purchaser's reasonable approval, Seller may cause the Title Company to issue
a title endorsement or "insure over" any objection (each, a "Seller
Endorsement") and it shall have the same effect as if such objection was cured
by Seller. If Seller shall fail to have such objections removed, insured over or
satisfied within such time or during such time delivers a written notice to
Purchaser that notwithstanding Seller's reasonable efforts, such objections may
not be cured, then, in the absence of a default by Purchaser, Purchaser may, by
written notice to Seller prior to Closing, either (a) terminate this Agreement
without any liability on its part, in which case the Deposit together with
interest thereon shall be refunded to Purchaser and neither party shall have any
further rights or obligations hereunder (except as set forth in Sections 3.6(b),
9.1, 11.2 and 11.12 hereof) or (b) proceed to Closing and take title subject to
such objections, in which case such non-cured objections shall become Permitted
Exceptions hereunder. After the Title Approval Date but prior to the Closing
Date, Purchaser shall also have the right to disapprove in writing any
additional item not previously set forth in the Title Report that Title Company
intends to show as an exception to title in the Title Policy. Any such
additional item not specifically disapproved in writing delivered within two (2)
days following Purchaser's receipt of written notice of such additional item
shall be deemed approved. Seller shall have until Closing to remove or cause
Title Company to insure over any disapproved item at Seller's own expense.
Seller may elect to (a) extend the Closing until the day after the date upon
which Seller is able to remove or cause Title Company to insure over any such
disapproved item (but in no event shall such extension exceed ten (10) business
days after the Closing Date), or (b) terminate this Agreement, in which event
neither Seller nor Purchaser shall have any further obligation hereunder (except
as set forth under Sections 3.6(b), 9.1, 11.2 and 11.12 hereof), Purchaser shall
return all documents to Seller and the Deposit and any interest accrued thereon
shall be returned to Purchaser. Notwithstanding anything in
-5-
this Agreement to the contrary, and notwithstanding any approval or consent
given by Purchaser hereunder, Seller shall cause all mortgages and deeds of
trust encumbering Seller's interest in the Real Property, and all mechanic's
liens filed against the Property relating to work performed on the Property and
contracted for by Seller, to be released and reconveyed from the Real Property,
or, with respect to such mechanic's liens, otherwise bonded, on or prior to the
Closing and shall cause the Title Company to insure title to the Real Property
as vested in Purchaser without any exception for such matters.
3.3 Vesting of Title.
At Closing, Seller shall convey all of Seller's right, title and interest
in and to the Real Property and Improvements to Purchaser by standard grant deed
(as further described in Section 4.2(a)(i) below), subject to the Permitted
Exceptions, and shall convey Seller's interest in the Personal Property to
Purchaser by xxxx of sale (as further described in Section 4.2(a)(ii) below).
3.4 Title Insurance.
At Closing, the Title Company shall issue to Purchaser an ALTA extended
coverage Owner's Policy of Title Insurance (Form B, rev. 10/17/70 with
Endorsement Form 1 coverage), in the amount of the Purchase Price insuring that
title to the Real Property and Improvements is vested in Purchaser subject to
the Permitted Exceptions (the "Title Policy"), provided that, if required by the
Title Company, Purchaser at its sole cost and expense shall update the existing
survey of the Property and deliver a copy of same certified to the Title Company
in a manner that will allow the Title Company to issue the extended coverage
title policy.
3.5 Inspection Period.
Purchaser shall have until February 21, 1997 (the "Inspection Period") to
inspect the Property, the Due Diligence Documents (as hereinafter defined in
Section 3.6(c)), and perform such other due diligence with respect to the
Property as Purchaser reasonably deems necessary, subject to the rights of
tenants in possession of the Property. In the absence of a default by Purchaser,
Purchaser may, upon written notice to Seller, received by Seller no later than
5:00 p.m.
-6-
Eastern Standard Time on the last day of the Inspection Period, elect to
terminate this Agreement. Upon any such termination, the Deposit together with
interest thereon shall be refunded to Purchaser and, subject to Sections 3.6(b),
9.1, 11.2 and 11.12 hereof, neither party shall have any further rights or
obligations hereunder. In the event no notice of termination is received by
Seller on or before such time, then the Deposit, together with all accrued
interest thereon, shall become non-refundable (subject to the other terms and
conditions of this Agreement) and Seller and Purchaser shall proceed to Closing
in accordance with the terms and conditions hereof and the Inspection Period
termination rights shall be deemed waived by Purchaser. Purchaser shall not
undertake any soil borings, ground water testing or other "Phase 2"
investigative procedures without first having obtained the prior written consent
of Seller. In connection with Purchaser's inspection of the Property, Purchaser
agrees that:
(a) All inspection fees, engineering fees, or other expenses of any kind
incurred by Purchaser relating to the inspection of the Property will
be at Purchaser's sole cost and expense;
(b) Purchaser will give Seller reasonable advance notice of the dates of
all inspections and will schedule all tests and inspections during
normal business hours whenever feasible unless otherwise requested by
Seller;
(c) Seller will have the right to have one or more representatives of
Seller accompany Purchaser and Purchaser's representatives, agents or
designees while they are on the Property;
(d) Any entry by Purchaser, its representatives, agents or designees will
not unreasonably interfere with Seller's use of the Property or with
the operations of any tenant;
(e) Purchaser will restore any damage caused to the Property by
Purchaser's entry on the Property for inspection purposes at
Purchaser's sole cost and expense if this transaction does not close;
and
-7-
(f) In making any inspection hereunder, Purchaser will treat and will
cause any representative of Purchaser to treat all information
obtained by Purchaser pursuant to the terms of this Agreement as
strictly confidential in accordance with Section 11.12 below.
Purchaser shall have the right to further inspect the Property within the two
(2) business day period immediately preceding the Closing (during normal
business hours and upon notice to Seller) for the purpose of confirming that the
Property is in the same condition at Closing as existing at the end of the
Inspection Period, reasonable wear and tear excepted; provided, however, that
such right of pre-closing inspection shall in no way be deemed to extend or
resurrect the Inspection Period or constitute a condition to Closing, subject
however, to the other terms and conditions of this Agreement. For purposes of
this Agreement, the term "business day" shall mean a day other than any
Saturday, Sunday, or day upon which national banks in the City of Woodland,
California are not open for general banking business.
The covenants of Purchaser contained in this Section 3.5(a) and (e) shall
survive the Closing Date or any earlier termination of this Agreement.
3.6 Furnishing of Information.
(a) In furtherance of Purchaser's rights set forth above, and prior to the
date hereof, Seller has furnished to Purchaser copies of the
following:
(i) a current rent roll with respect to the Property, together with
copies of the Lease and amendments and/or modifications
currently in effect;
(ii) Copies of any service, maintenance and other such contracts
relating to the day-to-day operation or maintenance of the
Property;
(iii) a copy of the current Management Agreement with Xxxx X.
Xxxxxxxxx dated September 8, 1987;
-8-
(iv) copies of financial statements for the Property for the last
two (2) years and year to date 1997 in the form prepared by
Seller in the ordinary course of business with respect to the
Property; and
(v) copies of the current tax xxxx for the Property and current
property tax assessment information in Seller's possession.
(b) Seller has allowed Purchaser and Purchaser's agents reasonable access
to the Property during regular business hours, subject to the terms of
the Lease, and Purchaser shall have the right to further inspect the
Property during the Inspection Period, subject to the terms of the
Lease. Purchaser hereby indemnifies, defends and holds Seller and the
Property harmless from any and all costs, loss, damages or expenses,
of any kind or nature (including, without limitation, mechanics' liens
and including, without limitation, reasonable attorneys' fees and
expenses) arising out of or resulting from such inspection,
investigation, entry and/or other activities upon the Property by
Purchaser, its employees, agents, contractors, subcontractors, and/or
assigns. Notwithstanding anything to the contrary herein, the
indemnity set forth in this Section 3.6(b) shall survive (i) any
termination of this Agreement, and (ii) the Closing and not be merged
therein.
(c) Purchaser acknowledges and Seller agrees that Seller has made
available for Purchaser's inspection and shall continue to make
available during the Inspection Period (i) the Lease and lease files;
(ii) copies of financial statements for the Property for the last two
(2) years and copies of such historical information in Seller's
possession or the possession of Seller's agents regarding operating
expenses of the Property as Purchaser shall reasonably request; (iii)
the documents listed in 3.6(a) above; and (iv) guaranties, warranties,
licenses,
-9-
governmental permits (including Certificates of Occupancy) and
relevant, pertinent reports and agreements in the possession of Seller
or its agents pertaining to the Property, if any (i.e., engineering
reports, environmental reports, and as-built plans) and service
contracts relating to the Property (collectively, the "Due Diligence
Documents"), on site at the Property or at the business office of
Seller or otherwise. Seller shall reasonably cooperate with Purchaser
to obtain any consents required in connection with an assignment of
any of the Due Diligence Documents. All of the Due Diligence Documents
are confidential and shall not be distributed or disclosed by
Purchaser to any person or entity not associated with Purchaser in
accordance with Section 11.12 hereof. Seller agrees to deliver to
Purchaser a copy of any written notices which Seller receives prior to
Closing from any governmental authority pertaining to any violation of
law or ordinance regulating the use of the Property which are received
by Seller prior to the Closing Date and of any notice which Seller
receives prior to Closing from any tenant regarding any default under
any Lease. If the transaction fails to close for any reason
whatsoever, Purchaser shall return to Seller all of the Due Diligence
Documents which Seller or its agents may have delivered to Purchaser
in accordance with this Section 3.6(b). THE FURNISHING OF ANY
MATERIALS, DOCUMENTS, REPORTS, OR AGREEMENTS DESCRIBED ABOVE SHALL NOT
BE INTERPRETED IN ANY MANNER AS A REPRESENTATION OR WARRANTY OF ANY
TYPE OR KIND BY SELLER, ANY PARTNER OF SELLER OR AGENT OF SELLER, OR
ANY OFFICER, DIRECTOR, OR EMPLOYEE OF SELLER, OR ITS AGENTS, OR ANY
OTHER PARTY RELATED IN ANY WAY TO ANY OF THE FOREGOING.
3.7 Consideration. Notwithstanding anything in this Agreement to the
contrary, to induce Purchaser to enter into this Agreement and to expend the
time and resources necessary to evaluate the Property and possibly forego other
opportunities while doing so, Seller hereby grants to Purchaser the rights to
-10-
terminate this Agreement provided herein. Such expenditures of time and
resources and possible loss of opportunity by Purchaser constitute adequate
consideration for Seller's remaining bound by this Agreement notwithstanding
such termination rights in Purchaser.
4. CLOSING
4.1 Closing.
The purchase and sale of the Property ("Closing") shall occur on February
28, 1997 (the "Closing Date"). Seller and Purchaser agree that this transaction
shall close in escrow through the Title Company, which shall serve as escrow
holder hereunder ("Escrow Holder"). In this regard, Seller and Purchaser shall
execute Escrow Holder's standard form general provisions and such other
instructions consistent herewith as Escrow Holder may require and are reasonably
acceptable to Seller and Purchaser. Purchaser and Seller shall endeavor to
conduct a "pre-closing" on the business day prior to the Closing Date with title
transfer and payment of the Purchase Price to be completed on the Closing Date
as set forth in Section 4.3 below.
4.2 Transactions at Closing.
One (1) business day prior to the Closing Date:
(a) Seller shall deliver or cause to be delivered to Escrow Holder the
following documents (collectively, the "Conveyance Documents") duly
executed and acknowledged where appropriate:
(i) A grant deed (the "Deed") conveying the Real Property and the
Improvements, subject to the Permitted Exceptions, in the form
attached hereto as Exhibit H;
(ii) Xxxx of Sale in the form set forth on Exhibit B attached hereto
conveying the Personal Property to Purchaser;
-11-
(iii) Two counterparts of the Assignment and Assumption Agreement
(the "Assignment") in the form set forth on Exhibit C attached
hereto;
(iv) Certificate of non-foreign status in the form set forth on
Exhibit D attached hereto, to confirm that Purchaser is not
required to withhold part of the Purchase Price pursuant to
Section 1445 of the Internal Revenue Code of 1986, as amended,
and a California form 590;
(v) Original executed copy of the Lease;
(vi) Information required by the Title Company to comply with the
real estate reporting requirements set forth in Section 6045(e)
of the Internal Revenue Code of 1986, as amended;
(vii) Certificate confirming that the representations and warranties
of Seller under this Agreement remain true and correct in the
form attached hereto as Exhibit L;
(viii) Evidence as to the authority of the person or persons executing
documents on behalf of the Seller reasonably acceptable to
Purchaser and the Title Company;
(ix) The Lease, equipment leases, commission agreements and service
contracts, together with such leasing and property files and
records necessary in connection with the continuing day-to-day
operation, leasing and maintenance of the Property; provided,
however, that proprietary information of Seller not relevant to
the ownership or operation of the Property shall not be
included. For a period of three (3) years after the Closing,
Purchaser shall allow Seller and its agents and
-12-
representatives access without charge to all files, records and
documents delivered to Purchaser at the Closing upon reasonable
advance notice and at all reasonable times, to examine and make
copies of any and all such files, records and documents, which
right shall survive the Closing;
(x) Affidavits as may be customarily and reasonably required by the
Title Company, in a form reasonably acceptable to Seller;
(xi) Closing Statement acceptable to Seller; and
(xii) Such other documents as may be reasonably necessary and
appropriate to complete the Closing of the transaction
contemplated herein.
(b) Purchaser shall deliver to Escrow Holder the following:
(i) The Purchase Price as adjusted to reflect the Purchaser's share
of closing costs, prorations and any fees as more particularly
set forth in Section 4.3 below;
(ii) Purchaser's Affidavit and Agreement in the form set forth on
Exhibit E attached hereto;
(iii) Two counterparts of a duly executed and acknowledged Assignment
(as described in Section 4.2(a)(iii) above);
(iv) Information required by the Title Company to comply with the
real estate reporting requirements set forth in Section 6045(i)
of the Internal Revenue Code of 1986, as amended;
-13-
(v) Evidence of the authority of the person or persons executing
documents on behalf of Purchaser reasonably acceptable to
Seller and the Title Company;
(vi) Certificate confirming that the representations and warranties
of Purchaser under this Agreement remain true and correct in
the form attached hereto as Exhibit M;
(vii) Closing Statement acceptable to Purchaser;
(viii) Affidavits as may be customarily and reasonably required by the
Title Company, in a form reasonably acceptable to Purchaser;
and
(ix) Such other documents as may be reasonably necessary and
appropriate to complete the Closing of the transaction
contemplated herein.
(c) Seller and Purchaser shall execute a tenant notification letter to
each tenant of the Property (the "Tenant Notification Letter") in the
form attached hereto as Exhibit I, and Purchaser shall, within
forty-eight (48) hours following the Closing, cause the Tenant
Notification Letter to be delivered to the tenants.
4.3 Title Transfer and Payment of Purchase Price.
(a) Purchaser agrees to deliver the cash payment specified in Section
4.2(b)(i) above by wiring the same to the Title Company so that
the wire may be confirmed in time to allow Closing to occur on
the Closing Date and directing the Title Company to deposit or
wire the same into Seller's designated account upon the
recording by the Title Company of the documents to be executed
and delivered by Seller under Sections 4.2(a) and 4.2(c) above
and upon issuance by the Title
-14-
Company, or unconditional agreement by the Title Company to
issue, the Title Policy.
(b) Upon receipt of all items specified in Section 4.2 and following
the satisfaction or waiver of all conditions precedent to Closing
and upon Title Company issuing or committing to issue the Title
Policy, Escrow Holder shall take the following actions:
(i) Prorate any and all amounts to be prorated pursuant to
Sections 5.1 and 5.2 below;
(ii) Date and cause to be recorded the Deed as of Closing and
designate that the Deed be returned directly to Purchaser
after recordation;
(iii) Issue the Title Policy to Purchaser;
(iv) Deliver the Deposit and the balance of the Purchase Price
to Seller, less appropriate adjustments;
(v) Credit Purchaser with the total of any and all tenant
security deposits held by Seller and any and all prorated
rents and other items;
(vi) Deliver properly executed copies of the Closing Statement
to Seller and to Purchaser; which Closing Statement shall
have been approved by Seller and Purchaser prior to
Closing;
(vii) Deliver to Seller executed originals of all unrecorded
documents delivered by Purchaser to Escrow Holder pursuant
to Section 4.2(b) above;
(viii) Deliver to Purchaser executed originals of all unrecorded
documents delivered by Seller toEscrow Holder pursuant to
Section 4.2(a) above, other than those set
-15-
forth in Section 4.2(a)(i) above; and
(ix) Pay broker's commissions as provided herein.
4.4 Reporting Requirements. The Escrow Holder shall comply with all
applicable federal, state and local reporting requirements relating to the close
of the transactions contemplated herein. Without limiting the generality of the
foregoing, to the extent the transactions contemplated by this Agreement involve
a real estate transaction within the purview of Section 6045 of the internal
Revenue Code of 1986, as amended (the "Internal Revenue Code"), Escrow Holder
shall have sole responsibility to comply with the requirements of Section 6045
of the Internal Revenue Code (and any similar requirements imposed by state or
local law). Escrow Holder shall hold Purchaser, Seller and their respective
counsel free and harmless from and against any and all liability, claims,
demands, damages and costs, including reasonable attorney's fees and other
litigation expenses, arising or resulting from the failure of Escrow Holder to
comply with such reporting requirements.
5. PRORATIONS; CLOSING ITEMS
5.1 Prorations; Closing Costs.
(a) The amount due on any gas, electric, water, sewer, or other utility
xxxx, or service contract relating to the Property shall be prorated
between Seller and Purchaser as of the Closing Date, to the extent
such utilities or service contracts are the obligation of the Seller
and not a direct or indirect obligation of the tenants. Any utility
deposits made by Seller shall be and remain the property of Seller.
(b) All collected rents and other payments from the tenant under the
Lease, including, but not limited to, base rent, additional rent,
percentage rent (if any), and expense reimbursements, shall be
prorated between Seller and Purchaser as of the Closing Date. The
balance remaining from any security deposits required under the Lease
or prepaid rent held by Seller shall be
-16-
credited to Purchaser (including the balance of estimated tax,
insurance and common area maintenance payments made to Seller by the
tenant under the Lease net of any payments by Seller thereon).
Purchaser agrees to indemnify and hold harmless Seller from and
against any loss, cost or expense (including, but not limited to,
attorneys' fees) resulting from any claim for such deposits or prepaid
rent actually paid or credited to Purchaser. If any rent or other
payments under the Lease are in arrears as of the Closing Date
("Delinquent Rents"), the amount of any such Delinquent Rents which
are collected by Purchaser shall be promptly paid by Purchaser to
Seller after Closing. Purchaser shall be entitled to deduct from any
such payment (i) Purchaser's reasonable costs of collection incurred
with respect to such tenant (including attorneys' fees), (ii) rents
due for the month in which such payment is received by Purchaser, and
(iii) rents from such tenant attributable to any period after the
Closing that are past due on the date of receipt. Purchaser agrees to
use commercially reasonable efforts to collect Delinquent Rents after
the Closing provided Purchaser shall not be required to bring any
action or proceeding against any tenant on account of Delinquent
Rents. Purchaser's obligations hereunder with respect to the
collection and payment of Delinquent Rents shall survive the Closing.
Seller may make reasonable efforts to collect Delinquent Rents from
and after the Closing Date; provided, however, that Seller shall not
be entitled to pursue any action for eviction of any tenant from the
Property. The provisions of this Section shall survive Closing and
shall not be merged therein.
(c) All real estate taxes attributable to the Property for the fiscal year
beginning July 1, 1996 and ending June 30, 1997 shall be prorated as
of the Closing provided Seller shall be entitled to recover any
reimbursements from the tenant on account of such taxes for the period
prior to Closing, and Purchaser shall immediately
-17-
remit to Seller any such reimbursements received by Purchaser upon
receipt thereof. Any real estate taxes due and payable for any periods
subsequent to the fiscal year ending June 30, 1997 shall be the
obligation of Purchaser and any real estate taxes due and payable for
any periods prior to the fiscal year beginning July 1, 1996 shall be
the obligation of Seller, provided Purchaser shall cooperate with
Seller to obtain any reimbursement from any tenant in respect of any
such taxes. Seller and Purchaser agree to mutually cooperate with each
other in connection with ongoing tax reduction proceedings relating to
prior tax years, if any, and any ongoing or future proceedings
relating to the fiscal year in which the Closing occurs, if any, and
any refund resulting therefrom (to the extent not refundable to the
tenant under the Lease) shall be prorated between Seller and Purchaser
based on the Closing Date, after deducting therefrom the reasonable
out-of-pocket expenses incurred by the parties. The provisions of the
immediately preceding two sentences shall survive Closing and shall
not be merged therein.
(d) Purchaser shall pay for the cost of recording the Deed, the cost of
any Purchaser Endorsements or special or extended coverages of any
nature in connection with the Title Policy and shall pay the
difference in price between a standard coverage title policy and the
extended coverage title policy being received, one-half (1/2) of any
escrow fees and closing fees to the Title Company, any surveys or
updates prepared by or at the direction of Purchaser, and any lender's
title insurance coverage for any loan obtained by Purchaser. Purchaser
shall pay for all costs relating to any financing obtained by
Purchaser in connection with its purchase of the Property and all
costs incurred by Purchaser in performing any related tests and
investigations. Seller shall pay the base premium for the Title Policy
equal to a standard coverage title policy and the Seller Endorsements
(without the cost of any endorsements or special or
-18-
extended coverages other than the Seller Endorsements), one-half (1/2)
of all escrow fees and closing fees charged by the Title Company, any
documentary transfer tax, any prepayment or reconveyance fee in
connection with any payoff or release of any existing deed of trust or
mortgage, and the recording fees with respect to documents which
Seller elects to place of record in order to cure title objections
raised by Purchaser to the extent Seller elects to cure the same, as
fully described in said Section 3.2. Each party shall pay its own
attorney's fees.
5.2 Calculation of Prorations.
For purposes of calculating prorations, Seller shall be deemed to be in
title to the Property, and therefore entitled to the income therefrom and
responsible for the expenses thereof, through the day prior to the Closing Date
and Purchaser shall be deemed to be in title to the Property, and therefore
entitled to the income therefrom and responsible for the expenses thereof, from
and after 12:01 a.m. on the Closing Date. All prorations shall be made on the
basis of the actual number of days of the year and month which have elapsed as
of the Closing Date. All prorations which cannot be ascertained as of the
Closing shall be prorated on the basis of the parties' reasonable estimate of
such amount. Except as otherwise stated above, if necessary, the amount of
prorations shall be adjusted in cash after Closing, as and when complete and
accurate information becomes available but in any event no later than one
hundred twenty (120) days after the Closing Date; provided, however, the one
hundred twenty (120) day period shall be extended for a reasonable time for any
real property tax reduction or abatement proceeds, which are to be prorated
between Purchaser and Seller pursuant to Section 5.1(c) and for any period of
time which may be required for reconciliation of tax, insurance, and common area
maintenance expenses for the calendar year in which the Closing Date occurs.
Purchaser and Seller each agree to reasonably cooperate with the other with
respect to such final proration. This provision shall survive Closing and shall
not be merged therein.
-19-
VI. REPRESENTATIONS AND WARRANTIES
6.1 Seller's Representations and Warranties.
Seller hereby represents and warrants to Purchaser as follows:
(a) Seller's Entity. Seller is a Delaware limited partnership duly
organized, validly existing and in good standing under the laws of the
State of Delaware.
(b) Seller's Authority. Seller has full power and authority to enter into
this Agreement and to perform all its obligations hereunder, and has
taken all action required by law, its governing instruments, or
otherwise to authorize the execution, delivery and performance of this
Agreement and all the deeds, agreements, certificates, and other
documents contemplated herein. This Agreement has been duly executed
by and is a valid and binding agreement of Seller, enforceable in
accordance with its terms, except as enforceability may be limited by
equitable principles or by the laws of bankruptcy, insolvency, or
other laws affecting creditors' rights generally.
(c) No Conflict or Lien. To the best of Seller's knowledge, neither the
execution or delivery of this Agreement nor the consummation of the
transactions contemplated herein will conflict with or result in a
breach of any contract, license or undertaking to which Seller is a
party or by which any of its property is bound, or constitute a
default thereunder or, except as contemplated herein, result in the
creation of any lien or encumbrance upon the Property.
(d) No Proceedings. No legal or administrative proceeding is pending or to
the best of Seller's knowledge threatened against the Property or
Seller which would adversely affect the Property or Seller's right to
convey the Property to Purchaser as contemplated in this Agreement.
-20-
(e) Lease. Seller has delivered to Purchaser a correct and complete copy
of the Lease and all amendments thereto. Schedule B attached to
Exhibit C hereto is a complete and accurate list of all leases and
amendments thereto to which Seller is a signatory. To the knowledge of
Seller, the Lease is in full force and effect and neither Seller nor
the tenant is in default thereunder.
(f) Litigation. Seller has no knowledge of and has not received notice of
any litigation which has been filed against the Property or Seller in
connection with the Property and would materially affect the Property
or use thereof, or Seller's ability to perform hereunder.
(g) Violations. Seller has no knowledge of and has not received written
notice from any governmental body, authority or agency of any
violation of federal, state or local laws, ordinances, codes, rules or
regulations affecting the Property, including any notice with respect
to any Hazardous Materials, as hereinafter defined.
(h) Condemnation. Seller has no knowledge of and has received no written
notice of any condemnation proceedings relating to the Property.
(i) Commissions. No leasing commissions are due and payable with respect
to the existing terms of the Lease.
(j) Service Contracts. All equipment leases, commission agreements,
service and maintenance contracts affecting the Property which will
survive the Closing are accurately set forth on Exhibit F hereto.
(k) Documents. All documents delivered by Seller to Purchaser, or made
available to Purchaser for review, including, without limitation, the
Due Diligence Documents, are, to the best of Seller's knowledge, true
and complete copies thereof.
-21-
(i) Notices. Xxxxxx X. Xxxxxxx, Xx. is the person who would, in the
ordinary course of his responsibilities, receive notice from other
agents or employees of Seller or from other persons or entities of any
of the matters described in this Section 6.1 which are limited by the
knowledge of Seller.
Except with respect to the warranties set forth in Section 6.1 hereof,
Seller has not made any warranty or representation, express or implied, written
or oral, concerning the Property, including without limitation any
representations relating to Hazardous Materials (as defined in Section 6.3(c)
below).
All representations and warranties of Seller contained herein are intended
to and shall remain true and correct as of the Closing and shall survive the
delivery of the Deed for a period of one (1) year after Closing and shall
thereafter expire unless a claim thereunder has been commenced in compliance
with the next sentence and diligently pursued thereafter. Any claims by
Purchaser with respect to such representations or warranties shall be commenced
by written notice to Seller within said one (1) year period and shall be
diligently pursued thereafter or shall be deemed waived by Purchaser.
Notwithstanding the foregoing, Purchaser shall have no claim against Seller with
respect to the representations and warranties set forth in this Section 6.1 if
Purchaser had actual knowledge that a representation or warranty was untrue or
inaccurate or incorrect as of the time of Closing and Purchaser nevertheless
chose to proceed with Closing hereunder.
Whenever in this Agreement a representation of Seller is based on the
"Seller's knowledge" or words of similar import, such reference shall be deemed
to be to the actual knowledge of Xxxxxx X. Xxxxxxx, Xx., without investigation
or inquiry of any kind. There shall be no personal liability to said individual
arising out of said representations or warranties. No knowledge of parties
affiliated with, employed by, or related by agency to Seller shall be imputed to
Seller or to the above-named person.
Notwithstanding anything to the contrary contained in this Agreement, the
aggregate amount which may be collected by Purchaser pursuant to the
representations and warranties of Seller set forth herein shall not exceed
$350,000.
-22-
6.2 Purchaser's Representations and Warranties.
Purchaser represents, warrants, and covenants to Seller that:
(a) Authority to Execute; Organization. This Agreement constitutes the
valid and binding obligation of Purchaser and is enforceable against
Purchaser in accordance with its terms, except as enforceability may
be limited by equitable principles or by the laws of bankruptcy,
insolvency, or other laws affecting creditors' rights generally. If
Purchaser is a corporation, a partnership, or a trust, Purchaser is
validly organized and in good standing under the laws of the state of
its organization, and the execution of this Agreement, delivery of
money and all required documents, Purchaser's performance of this
Agreement and the transaction contemplated hereby have been duly
authorized by the requisite action on the part of the Purchaser and
Purchaser's directors, shareholders, partners or trustees.
(b) Recording. Purchaser shall not record this Agreement or a memorandum
hereof at any time.
(c) Litigation. There is no litigation pending or, to Purchaser's
knowledge, threatened, against Purchaser or any basis therefore before
any court, regulatory authority or administrative agency that might
result in any material adverse change in the business or financial
condition of the Purchaser.
(d) Financial Condition. Purchaser has adequate financial resources to
make timely payment of all sums due from Purchaser hereunder and to
perform all of its obligations hereunder.
(e) Purchaser Experience. Purchaser is an experienced real property
operator and investor and is represented or has had an opportunity to
be represented by local counsel in connection with this transaction.
Purchaser has the
-23-
responsibility under this Agreement to inspect the Property and the
real estate market in sufficient detail to fully satisfy itself with
respect to the environmental conditions and the market conditions
affecting the Property including, without limitation, property values,
interest rates, and similar market factors. Purchaser has reached its
conclusions based upon its own analysis and without relying upon
representations by Seller, its employees, agents or consultants.
6.3 Purchaser Accepts Property ("As Is").
(a) Purchaser Acknowledgment. As of the expiration of the Inspection
Period, Purchaser acknowledges for Purchaser and Purchaser's
successors, heirs and assignees, (i) that Purchaser has been
given a reasonable opportunity to inspect and investigate the
Property, all improvements thereon and all aspects relating
thereto, either independently or through agents and experts of
Purchaser's choosing and (ii) that Purchaser is acquiring the
Property based solely upon Purchaser's own investigation and
inspection thereof, and (iii) that the provisions of this Section
6.3(a) shall survive Closing and shall not be merged therein.
SELLER AND PURCHASER AGREE THAT UPON CLOSING THE PROPERTY SHALL
BE SOLD AND THAT PURCHASER SHALL ACCEPT POSSESSION OF THE
PROPERTY ON THE CLOSING DATE "AS IS, WHERE IS, WITH ALL FAULTS"
WITH NO RIGHT OF SET-OFF OR REDUCTION IN THE PURCHASE PRICE, AND
THAT EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES OF SELLER SET
FORTH IN SECTION 6.1(a) THROUGH (l) HEREOF INCLUSIVE, SUCH SALE
SHALL BE WITHOUT REPRESENTATION OR WARRANTY OF ANY KIND, EXPRESS
OR IMPLIED, INCLUDING WITHOUT LIMITATION, WARRANTY OF INCOME
POTENTIAL, OPERATING EXPENSES, USES, MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE, AND SELLER DOES HEREBY DISCLAIM AND
RENOUNCE ANY SUCH REPRESENTATION OR WARRANTY. PURCHASER
SPECIFICALLY ACKNOWLEDGES THAT PURCHASER IS NOT RELYING ON ANY
REPRESENTATIONS OR WARRANTIES OF ANY
-24-
KIND WHATSOEVER, EXPRESS OR IMPLIED, FROM SELLER, SELLER'S AGENTS
OR BROKERS, AS TO ANY MATTER CONCERNING THE PROPERTY (EXCEPT FOR
THE WARRANTIES SPECIFICALLY SET FORTH IN SECTION 6.1(a) THROUGH
(l) HEREOF INCLUSIVE), INCLUDING WITHOUT LIMITATION: (l) THE
CONDITION OR SAFETY OF THE PROPERTY OR ANY IMPROVEMENTS THEREON,
INCLUDING, BUT NOT LIMITED TO, PLUMBING, SEWER, HEATING AND
ELECTRICAL SYSTEMS, ROOFING, AIR CONDITIONING, IF ANY,
FOUNDATIONS, SOIL AND GEOLOGY INCLUDING HAZARDOUS MATERIALS (AS
HEREINAFTER DEFINED) LOT SIZE, OR SUITABILITY OF THE PROPERTY OR
ITS IMPROVEMENTS FOR A PARTICULAR PURPOSE; (2) WHETHER THE
APPLIANCES, IF ANY, PLUMBING OR UTILITIES ARE IN WORKING ORDER;
(3) THE HABITABILITY OR SUITABILITY FOR OCCUPANCY OF ANY
STRUCTURE AND THE QUALITY OF ITS CONSTRUCTION; (4) THE FITNESS OF
ANY PERSONAL PROPERTY; OR (5) WHETHER THE IMPROVEMENTS ARE
STRUCTURALLY SOUND, IN GOOD CONDITION, OR IN COMPLIANCE WITH
APPLICABLE CITY, COUNTY, STATE OR FEDERAL STATUTES, CODES OR
ORDINANCES, INCLUDING, WITHOUT LIMITATION THE REQUIREMENTS OF THE
AMERICANS WITH DISABILITIES ACT, 42 USCA ss. 12101 et. seq.
SUBJECT ONLY TO THE WARRANTIES EXPRESSLY SET FORTH IN SECTIONS
6.1(a) THROUGH (l) HEREOF, PURCHASER FURTHER ACKNOWLEDGES AND
AGREES THAT IT IS RELYING SOLELY UPON ITS OWN INSPECTION OF THE
PROPERTY AND NOT UPON ANY REPRESENTATIONS MADE TO IT BY SELLER,
ITS OFFICERS, DIRECTORS, CONTRACTORS, AGENTS OR EMPLOYEES OR ANY
PERSON WHOMSOEVER. ANY REPORTS, REPAIRS OR WORK REQUIRED BY
PURCHASER ARE TO BE THE SOLE RESPONSIBILITY OF PURCHASER AND
PURCHASER AGREES THAT THERE IS NO OBLIGATION ON THE PART OF
SELLER TO MAKE ANY CHANGES, ALTERATIONS, OR REPAIR TO THE
PROPERTY AND PURCHASER ACKNOWLEDGES THAT, UPON EXPIRATION OF THE
INSPECTION PERIOD, PURCHASER WILL HAVE COMPLETED ITS DUE
DILIGENCE WITH RESPECT TO THE PROPERTY TO ITS SATISFACTION.
PURCHASER IS SOLELY RESPONSIBLE FOR OBTAINING ANY RESALE
CERTIFICATE OR ANY OTHER APPROVAL OR PERMIT NECESSARY FOR
TRANSFER OF THE PROPERTY AND FOR ANY REPAIRS OR ALTERATIONS
NECESSARY TO OBTAIN
-25-
THE SAME, ALL AT PURCHASER'S SOLE COST AND EXPENSE.
(b) No Claim for Hazardous Materials. Upon Closing, Purchaser, for
Purchaser and Purchaser's successors in interest, releases Seller
from, and waives all claims and liability which Purchaser may
have against Seller for, any structural, physical and
environmental condition of the Property, including without
limitation the presence, discovery or removal of any Hazardous
Materials in, at, about or under the Property, or for, connected
with or arising out of any and all claims or causes of action
based upon the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 ("CERCLA"), the Superfund
Amendments and Reauthorization Act of 1986 ("XXXX"), the Resource
Conservation and Recovery Act ("RCRA"), the Toxic Substances
Control Act (the "TSCA"), as such acts may be amended from time
to time, or any other federal or state statutory or regulatory
cause of action arising from or related to Hazardous Materials
at, in or under the Property (collectively, the "Hazardous Waste
Laws") The waiver and release of Purchaser set forth in this
Section 6.3(b) shall survive the Closing Date and shall be
enforceable at any time after the Closing Date.
(c) "Hazardous Materials" Defined. For purposes of this Agreement,
the term "Hazardous Material" shall mean any substance, chemical,
waste or material that is or becomes regulated by any federal,
state or local governmental authority because of its toxicity,
infectiousness, radioactivity, explosiveness, ignitability,
corrosiveness or reactivity, including, without limitation, those
substances regulated by the Hazardous Waste Laws.
(d) No Representations as to Hazardous Materials. Purchaser
acknowledges that Seller has made no representations or
warranties whatsoever to Purchaser regarding the presence or
absence of any Hazardous Materials in, at, or under the
-26-
Property; provided, however, that Seller and Purchaser
acknowledge that Seller has made certain representations as to no
proceedings, notices received, or knowledge as more specifically
set forth in Sections 6.1(d), (f) and (g) hereof. Purchaser has
made such studies and investigations, conducted such tests and
surveys, and engaged such specialists as Purchaser has deemed
appropriate to evaluate fairly the Property, and its risks from
an environmental and Hazardous Materials standpoint.
In furtherance of the general release of all claims against Seller as set
forth in this Section 6.3, Purchaser expressly acknowledges that it is familiar
with California Civil Code Section 1542 which provides:
"The general release does not extend to claims which the creditor
does not know or suspect to exist in his favor at the time of
executing the release, which if known by him must have materially
affected his settlement with the debtor."
Purchaser expressly waives the benefits and protections of Section 1542. Each
covenant, agreement, representation, and warranty of Purchaser contained in this
Section 6.3 of this Agreement shall survive Closing or termination of this
Agreement. This provision is a material inducement for each of the parties to
enter into this transaction.
PURCHASER'S INITIALS: ______ SELLER'S INITIALS:
7. CONDITIONS TO CLOSING
7.1 Seller's Conditions.
The obligation of Seller to sell and convey the Property under this
Agreement is subject to the satisfaction of the following conditions precedent
or conditions concurrent (the satisfaction of which may be waived only in
writing by Seller):
-27-
(a) Delivery and execution by Purchaser to Escrow Holder of all monies,
items, and other instruments required to be delivered by Purchaser to
Escrow Holder;
(b) Purchaser's covenants, warranties, and representations set forth
herein shall be true and correct as of the Closing Date;
(c) All of the actions by Purchaser contemplated by this Agreement shall
have been completed;
(d) There shall be no uncured default by Purchaser of any of its
obligations under this Agreement; and
(e) To the extent required for delivery of the Title Policy, Purchaser
shall have updated the existing survey and have caused same to be
certified to the Title Company in a manner to allow the Title Company
to issue the Title Policy.
7.2 Purchaser's Conditions.
The obligation of Purchaser to acquire the Property under this Agreement is
subject to the satisfaction of the following conditions precedent or conditions
concurrent:
(a) Delivery and execution by Seller to Escrow Holder of all monies, items
and other instruments to be delivered by Seller to Escrow Holder;
(b) Seller's covenants, warranties and representations set forth herein
shall be true and correct as of the Closing Date;
(c) All of the actions by Seller contemplated by this Agreement shall have
been taken;
(d) There shall be no uncured default by Seller of any of its obligations
under this Agreement; and
(e) Purchaser shall have received, on or before three (3) days before the
Closing Date, a Tenant Estoppel Certificate in substantially the form
attached hereto as
-28-
Exhibit J from Xxxxx River Paper Company, Inc.
(f) Title Company shall be irrevocably committed to issue the Title Policy
subject to the Permitted Exceptions.
(g) Seller shall have received and delivered to Purchaser, on or before
three (3) days before the Closing Date, written evidence reasonably
satisfactory to Purchaser confirming the election of Xxxxx River Paper
Company, Inc. not to exercise the right of first offer granted to
Xxxxx River Paper Company, Inc. pursuant to the Lease, as more
specifically set forth in Article 16 below.
7.3 Failure of Condition.
(a) In the event of a failure of any condition contained in Section
7.1 or 7.2 above which is not the result of a default by either
party, the party for whose benefit the condition existed may
either waive the condition and proceed to Closing or may
terminate this Agreement in which event (A) all documents and
funds deposited by Purchaser shall be immediately returned to
Purchaser; and (B) all documents deposited by Seller shall be
immediately returned to Seller and neither party shall have any
further rights or obligations hereunder (except as
set forth in Sections 3.6(b), 9.1, 11.2 and 11.12);
(b) In the event of a failure of any condition contained in Section
7.2 above due to a default by Seller, then Purchaser may in its
sole discretion:
(i) terminate this Agreement in which event (A) all documents
and funds deposited by Purchaser shall be immediately
returned to Purchaser; and (B) all documents deposited by
Seller shall be immediately returned to Seller and neither
party shall have any further rights or obligations hereunder
(except as
-29-
set forth in Sections 3.6(b), 9.1, 11.2 and 11.12);
(ii) pursue specific performance of Seller's obligation to convey
the Property to Purchaser in accordance with the terms of
this Agreement; or
(iii)waive such default and close the transaction.
(c) In the event of a failure of any condition contained in Section
7.1 above due to a default by Purchaser, Seller may in its sole
discretion:
(i) terminate this Agreement and Seller shall retain as
liquidated damages the funds described in Article 12, in
which event all documents deposited by Purchaser shall be
immediately returned to Purchaser, and all documents
deposited by Seller shall be immediately returned to Seller
and neither party shall have any further rights or
obligations hereunder (except as set forth in Sections
5.3(b), 9.1, 11.2 and 11.12); or
(ii) Seller may waive such default and close the transaction.
(d) Seller waives any rights it may have to specific performance in
the event of a default by Purchaser with the exclusive remedy of
Seller being the right to liquidated damages more fully described
in Section 12 hereof. Purchaser waives any right to any claim of
any nature for damages or otherwise in the event of a default by
Seller and Purchaser acknowledges that its exclusive remedies in
the event of a default by Seller shall be to either terminate
this Agreement in accordance with Section 7.3(a)(i) above, to
seek specific performance in accordance with Section 7.3(a)(ii)
above, or waive such default and close the transaction in
accordance with Section 7.3(a)(iii) above.
-30-
8. DAMAGE OR DESTRUCTION OF THE PROPERTY; CONDEMNATION
8.1 Damage or Destruction of the Property.
(a) If, between the Effective Date and the Closing Date, the Property is
Materially Damaged or Destroyed (as hereinafter defined), Purchaser
may elect in writing, within five (5) days after receipt of notice by
Purchaser from Seller of such damage or destruction, accompanied by
information regarding the amount and payment of insurance (the
"Casualty Notice Date"), to terminate this Agreement or to purchase
all of the Property without regard to such damage or destruction. If
Purchaser fails to notify Seller of Purchaser's election, Purchaser
will be deemed to have elected to proceed with the purchase of all of
the Property. In the event that Purchaser purchases all of the
Property, Seller shall have no obligation to repair any such damage or
destruction, nor shall the Purchase Price be adjusted except as
provided in 8.1(b) below. "Materially Damaged or Destroyed" shall mean
damage or destruction the repair or replacement of which, as
determined by a licensed general contractor reasonably approved by
Purchaser and Seller, would exceed $750,000 as to any casualty of a
type against which insurance is maintained (a "Major Insured
Casualty") or would exceed $100,000 as to any casualty against which
insurance is not maintained (a "Major Uninsured Casualty"). If,
between the Effective Date and the Closing Date, the Property sustains
nonmaterial damage, the parties shall proceed to closing. If between
the Effective Date and the Closing Date, the Property is Materially
Damaged or Destroyed due to a Major Uninsured Casualty, Seller may
elect in writing, within five (5) days after the Casualty Notice Date,
to terminate this Agreement. If Seller fails to notify Purchaser of
Seller's election, Seller will be deemed to
-31-
have elected to proceed with the sale of all of the Property.
(b) If Purchaser elects or is required to purchase the Property despite
such damage or destruction, Seller shall assign its rights to and
Purchaser shall be entitled to receive any insurance proceeds (with
any accrued interest thereon) at or after Closing (as the same are
available) and Purchaser shall receive a credit toward the Purchase
Price (i) for the insurance deductible relative to Seller's insurance
on the Property with respect to an insured casualty, including a Major
Insured Casualty, or (ii) for the cost of repair not covered by
insurance with respect to an uninsured casualty, including a Major
Uninsured Casualty. Seller shall reasonably cooperate with Purchaser
to allow Purchaser to collect any available insurance proceeds. Seller
agrees to maintain until the Closing the level of insurance coverage
in effect on the Property as of the Effective Date.
8.2 Condemnation.
If prior to Closing all or a Material Part of the Property is subject to a
proposed taking by any public authority, Seller shall promptly notify Purchaser
in writing of such proposed taking and Purchaser may terminate this Agreement by
notice to Seller within five (5) days after written notice thereof. If Purchaser
so elects, this Agreement shall terminate. If Purchaser does not so elect to
terminate this Agreement, or if the taking is as to a non-Material Part of the
Property, Purchaser shall accept the Property subject to the taking without a
reduction in the Purchase Price and shall receive at closing an assignment of
all of Seller's rights to any condemnation award to the extent that such amount
does not exceed the Purchase Price plus any legal fees and expenses actually
expended in obtaining such award. Seller shall reasonably cooperate with
Purchaser to allow Purchaser to collect any such award. A "Material Part" of the
Property shall mean a taking which would exceed $750,000 as determined by a
licensed appraiser reasonably approved by Seller and Purchaser.
-32-
9. COMMISSIONS AND EXPENSES
9.1 Payment of the Sale Commission.
Purchaser and Seller represent and warrant to each other that no real
estate broker or agent has been authorized to act on either parties' behalf
except Xxxxxxx Xxxxxx/Business Real Estate Brokerage Company, Inc. ("Seller's
Agent") under a commission agreement between Seller and Seller's Agent, which
commission ("TB Commission") under said commission agreement Seller will pay to
Seller's Agent at Closing. Purchaser hereby indemnifies Seller and holds Seller
harmless from any and all demands or claims which now or hereafter may be
asserted against Seller for any brokerage fees, commissions or similar types of
compensation which may be claimed by any broker which was engaged or which
claims to have been engaged by Purchaser and all expenses and costs in handling
or defending any such demand or claim, including reasonable attorney's fees.
Seller hereby indemnifies Purchaser and holds Purchaser harmless from any and
all demands or claims which now or hereafter may be asserted against Purchaser
for any brokerage fees, commissions or similar types of compensation which may
be claimed by any broker which was engaged or which claims to have been engaged
by Seller and all expenses and costs in handling or defending any such demand or
claim, including reasonable attorney's fees. This provision shall survive (i)
any termination of this Agreement and (ii) the Closing and not be merged
therein.
9.2 Maintenance of the Property; Property Personnel.
Between Seller's execution of this Agreement and the Closing, Seller shall
maintain the Property in its existing condition and repair, reasonable wear and
tear excepted, shall perform all work required to be performed by the landlord
under the terms of any Lease, except Seller shall not be required to perform any
repairs set forth in the PCM Proposal. In the event of the Closing, Purchaser
will not retain any existing employees and management agents of Seller for the
Property, and, accordingly, on the Closing, Seller shall (i) cause all
employment and management agreements respecting the Property to be terminated,
and deliver evidence of such termination to Purchaser, and (ii) remove all
employees and management personnel from the Property.
-33-
9.3 Leasing; Contracts.
Seller shall not, after the date of this Agreement, enter into any lease or
contract affecting the Property or any amendment thereof, which shall be an
obligation of Purchaser after Closing, or waive, compromise or settle any rights
of Seller under any contract or Lease which shall be assumed by Purchaser upon
Closing, or agree to return any security deposit, or modify, amend, or terminate
any contract which shall be assumed by Purchaser upon Closing, without in each
case obtaining Purchaser's prior written consent thereto. Seller shall terminate
prior to the Closing, at no cost or expense to Purchaser, any and all service or
management contracts related to the Property to which Seller is a party.
10. NOTICES
All notices, requests or demands to a party hereunder shall be in writing
and shall be effective (i) when received by overnight courier service or
facsimile telecommunication (provided that a copy of such notice, request or
demand is deposited into the United States mail within one (1) business day of
the facsimile transmission), or (ii) three (3) days after being deposited into
the United States mail (sent certified or registered, return receipt requested),
in each case addressed as follows (or to such other address as Purchaser or
Seller may designate in writing in accordance with this Section 10):
If to Seller:
Corporate Realty Income Fund I, L.P.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Xx.
Phone No. (000) 000-0000
Fax No. (000) 000-0000
With a copy to:
Xxxxxx & Xxxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Phone No. (000) 000-0000
Fax N. (000) 000-0000
-34-
If to Purchaser:
Pacific Gulf Properties Inc.
000 Xxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx
Phone No. (000) 000-0000
Fax No. (000) 000-0000
With a copy to:
Xxx, Castle & Xxxxxxxxx LLP
0000 Xxxxxxx Xxxx Xxxx
00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxx
Phone No. (000) 000-0000
Fax No. (000) 000-0000
11. MISCELLANEOUS
11.1 Time.
Time is of the essence in the performance of each party's obligations
hereunder.
11.2 Attorney's Fees.
If any legal action, arbitration or other proceeding is commenced to
enforce or interpret any provision of this Agreement, the prevailing party shall
be entitled to an award of its attorneys' fees and expenses. The phrase
"prevailing party" shall include a party who receives substantially the relief
desired whether by dismissal, summary judgment, judgment or otherwise. This
provision shall survive (i) any termination of this Agreement and (ii) the
Closing and not be merged therein.
11.3 No Waiver.
No waiver by any party of the performance or satisfaction of any covenant
or condition shall be valid unless in writing and shall not be considered to be
a waiver by such party of any other covenant or condition hereunder.
-35-
11.4 Entire Agreement.
This Agreement contains the entire agreement between the parties regarding
the Property and supersedes all prior agreements, whether written or oral,
between the parties regarding the same subject. This Agreement may only be
modified in writing.
11.5 Survival.
Except for (i) the representations and indemnity obligations of Purchaser
and Seller under this Agreement, (ii) the post-closing obligations of Purchaser
and Seller under this Agreement and (iii) as otherwise specifically provided in
this Agreement, none of the agreements, warranties and representations contained
herein shall survive Closing.
11.6 Successors.
Subject to Section 11.7, this Agreement shall bind and inure to the benefit
of the parties hereto and to their respective legal representatives, successors
and permitted assigns.
11.7 Assignment.
Seller's written consent shall be required for any assignment of
Purchaser's rights to a nominee under this Agreement. Any attempted unpermitted
assignment, except with Seller's prior written consent, shall be ineffective and
shall constitute a default under this Agreement. Notwithstanding any assignment
hereunder, Purchaser shall remain liable for the obligations of Purchaser under
this Agreement. Purchaser represents, warrants and certifies to Seller that
Purchaser has not assigned, transferred or encumbered or agreed to assign,
transfer or encumber, directly or indirectly, all or any portion of its rights
or obligations under this Agreement. Purchaser shall give written notice of any
proposed assignment at least five (5) business days prior to Closing. If Seller
approves such assignment, Seller shall have no obligation to reissue any
estoppels, surveys, or title commitments previously delivered to Purchaser, nor
shall Seller be responsible for any costs or expenses of any nature associated
with such transfer.
-36-
11.8 Relationship of the Parties.
The parties acknowledge that neither party is an agent for the other party,
and that neither party shall or can bind or enter into agreements for the other
party.
11.9 Governing Law.
This Agreement and the legal relations between the parties hereto shall be
governed by and construed in accordance with the laws of the State of
California.
11.10 Possession; Risk of Loss.
Seller shall deliver to Purchaser possession of the Property on the Closing
Date, subject only to the Lease and Permitted Exceptions. All risk of loss or
damage with respect to the Property shall pass from Seller to Purchaser on the
Closing Date.
11.11 Review by Counsel.
The parties acknowledge that each party and its counsel have reviewed and
approved this Agreement, and the parties hereby agree that the normal rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Agreement or
any amendments or exhibits hereto.
11.12 Confidentiality.
(a) Seller and Purchaser hereby covenant and agree that, at all times
after the date of execution hereof and prior to the Closing, unless
consented to in writing by the other party, no press release or other
public disclosure concerning this transaction shall be made, and each
party agrees to use best efforts to prevent disclosure of this
transaction, other than (i) to directors and officers of the parties,
limited partners and/or shareholders of Seller and Purchaser, and
employees, prospective lenders of Purchaser, attorneys, accountants,
agents and affiliates of the parties who are involved in the ordinary
course of business with this transaction, all of which shall be
-37-
instructed to comply with the confidentiality provisions hereof; (ii)
as required by law or in response to lawful process or subpoena or
other valid or enforceable order of a court of competent jurisdiction;
or (iii) in compliance with any filings required by the Securities and
Exchange Commission ("SEC") or other federal or state agency.
(b) Notwithstanding anything to the contrary contained elsewhere herein,
Purchaser hereby acknowledges that all information furnished by Seller
to Purchaser or obtained by Purchaser in the course of Purchaser's
investigation of the Property, or in any way arising from or relating
to any and all studies or entries upon the Property by Purchaser, its
agents or representatives, shall be treated as confidential
information and further, that if any such confidential information is
disclosed to third parties prior to the Closing, Seller may suffer
damages and irreparable harm. In connection therewith, Purchaser
hereby expressly understands, acknowledges and agrees (i) that
Purchaser will not disclose any of the contents or information
contained in or obtained as a result of any reports or studies made in
connection with Purchaser's investigation of the Property, in any form
whatsoever (including, but not limited to, any oral information
received by Purchaser during the course of Purchaser's inspection of
the Property), to any party prior to the Closing other than (a) the
Seller, Seller's employees, agents or representatives, or Purchaser's
agents, employees, representatives, attorneys, consultants or
potential institutional lenders, without the prior express written
consent of Seller (which consent shall not be unreasonably withheld),
(b) as required by law or in response to lawful process or subpoena or
other valid and enforceable order of a court of competent
jurisdiction, and (c) as required by the SEC or other federal or state
agency; (ii) that in making any disclosure of such information as
permitted hereunder, Purchaser will advise said parties of the
confidentiality of such information and the potential of damage to
-38-
Seller as a result of any disclosure of such information by said third
party, and (iii) that Seller is relying on Purchaser's covenant not to
disclose any of the contents or information contained in any such
reports or investigations to third parties (all of which is deemed to
be confidential information by the provisions of this Section). In the
event this Agreement is terminated, Purchaser agrees to return to
Seller all information, studies, or reports Purchaser or Purchaser's
agents have obtained from Seller or Seller's agents, contractors or
representatives with respect to the Property or the condition of the
Property. In the event either Purchaser or Purchaser's agents,
employees, representatives, attorneys, consultants or potential
institutional lenders cause a breach of Purchaser's duty of
confidentiality hereunder, Purchaser shall be liable to Seller for
damages and Seller may pursue all of its remedies afforded it under
this Agreement. This provision shall survive (i) any termination of
this Agreement and (ii) the Closing and not be merged therein.
11.13 Termination.
Upon termination of this Agreement for any reason by either party,
Purchaser shall have the obligation to return to Seller all Due Diligence
Documents and copies thereof (including the Survey) and any other information or
documentation received by Purchaser from Seller or Seller's agents with respect
to the Property and shall not disclose to any third party the contents thereof.
Seller shall not have any obligation to return or permit the return of any sums
due Purchaser upon any termination of this Agreement by Purchaser until the Due
Diligence Documents and copies thereof (including the Survey) and such other
information or documents provided to Purchaser by Seller or Seller's agents have
been returned to Seller.
-39-
11.14 Waiver of Jury Trial. THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHT THAT EITHER PARTY MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN
CONNECTION WITH THE PROPERTY, THE CONVEYANCE DOCUMENTS OR ANY OTHER DOCUMENTS
EXECUTED IN CONNECTION HEREWITH, OR IN RESPECT OF ANY COURSE OF CONDUCT,
STATEMENTS (WHETHER ORAL OR WRITTEN), OR ACTIONS OF EITHER PARTY. THIS PROVISION
IS A MATERIAL INDUCEMENT FOR EACH OF THE PARTIES TO ENTER INTO THIS TRANSACTION.
PURCHASER'S INITIALS: ______ SELLER'S INITIALS: _____
11.15 Counterparts.
This Agreement may be executed in one or more counterparts, each of which
will be deemed an original, and the counterparts taken together shall constitute
a single agreement.
11.16 Limitation on Liability. Purchaser expressly agrees that the
obligations and liabilities of Seller under this Agreement and any document
referenced herein shall not constitute personal obligations of the officers,
directors, employees, agents, affiliates, members, representatives, partners,
stockholders or other principals and representatives of Seller. Notwithstanding
anything to the contrary, Seller's liability, if any, arising in connection with
this Agreement or with the Property shall, prior to Closing, be limited to the
remedies as set forth in Section 7.3 of this Agreement and, post-Closing, shall
be limited to $350,000 in accordance with Section 6.1 of this Agreement. The
limitations of liability contained in this section shall apply equally and inure
to the benefit of Seller's present and future officers, directors, trustees,
partners, shareholders, agents and employees, and their respective heirs,
successors and assigns.
11.17 Partial Invalidity. If any term or provision of this Agreement or the
application thereof to any person or circumstance shall, to any extent, be
invalid or unenforceable, the remainder of this Agreement, or the application of
such term or provision to persons or circumstances other than those as to which
it is held invalid or unenforceable, shall not be affected thereby, and each
such term and provision of this Agreement shall be valid and be enforced to the
fullest extent permitted by law.
-40-
11.18 Construction. Headings at the beginning of each section and
subsection are solely for the convenience of the Purchaser and Seller and are
not a part of this Agreement and shall have no effect upon the construction or
interpretation of any part hereof. Whenever required by the context of this
Agreement, the singular shall include the plural and the masculine shall include
the feminine, and vice versa. This Agreement shall not be construed as if it had
been prepared by one of the parties, but rather as if Purchaser and Seller had
prepared the same. Unless otherwise indicated, all references to sections and
subsections are to this Agreement. All Exhibits referred to in this Agreement
are attached hereto and incorporated herein by this reference. In the event the
date on which Purchaser or Seller is required to take any action under the terms
of this Agreement is not a business day, the action shall be taken on the next
succeeding business day thereafter.
12. LIQUIDATED DAMAGES
IF PURCHASER SHALL BREACH OR DEFAULT IN ANY OF ITS OBLIGATIONS UNDER THIS
AGREEMENT, SELLER SHALL BE ENTITLED TO TERMINATE THIS AGREEMENT AND RETAIN THE
AMOUNT OF THE DEPOSIT DESCRIBED IN SECTION 2.1 PLUS ANY ACCRUED INTEREST THEREON
(THE "SPECIFIED SUM") AS LIQUIDATED DAMAGES. SELLER AND PURCHASER ACKNOWLEDGE
THAT SELLER'S DAMAGES WOULD BE DIFFICULT TO DETERMINE, AND THAT THE SPECIFIED
SUM IS A REASONABLE ESTIMATE OF SELLER'S DAMAGES. SELLER AND PURCHASER
SPECIFICALLY FURTHER AGREE AFTER NEGOTIATION THAT THIS SECTION 12 IS INTENDED TO
AND DOES LIQUIDATE THE AMOUNT OF DAMAGES DUE SELLER, AND SHALL BE SELLER'S
EXCLUSIVE REMEDY AGAINST PURCHASER, BOTH AT LAW AND IN EQUITY ARISING FROM OR
RELATED TO A BREACH BY PURCHASER OF ITS OBLIGATION TO CONSUMMATE THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. PROVISIONS OF THIS SECTION 12 SHALL
NOT BE CONSTRUED AS A LIMITATION ON THE OBLIGATIONS OF PURCHASER UNDER SECTIONS
3.6(b), 9.1, 11.2 and 11.12 HEREOF. THIS PROVISION IS A MATERIAL INDUCEMENT FOR
EACH OF THE PARTIES TO ENTER INTO THIS TRANSACTION.
PURCHASER'S INITIALS: ______ SELLER'S INITIALS: _____
-41-
13. NO RECORDING
The provisions hereof shall not constitute a lien on the Property and this
Agreement shall not be placed or suffered to be placed by Purchaser for
recording with the office of the recorder (clerk) for the county in which the
Property is located. Purchaser hereby appoints Seller as Purchaser's true and
lawful attorney-in-fact, coupled with an interest, for the purposes of the
execution of such documents and doing such acts as shall be necessary to effect
the discharge of the recording of this Agreement if such recording shall have
been accomplished in violation of the Section.
14. EFFECTIVENESS
This Agreement shall only be effective if a counterpart is signed by both
Seller and Purchaser.
15. TAX-DEFERRED EXCHANGE
At the option of Seller, this transaction may be part of a tax-deferred
exchange pursuant to United States Internal Revenue Code Section 1031 and
related regulations. If requested by Seller, Purchaser shall cooperate with
Seller to effect such assignments and other documents as Seller may require in
connection with the same; provided, however, that Purchaser shall not take title
to any property other than the Property or incur any additional liability on
account of such exchange and provided, further, that Seller shall reimburse
Purchaser for all costs and expenses, including attorneys' fees and costs,
incurred by Purchaser in connection with such exchange without prior consent.
16. RIGHT OF FIRST OFFER
The parties hereto acknowledge that Seller's right to sell the Property is
subject to a certain right of first offer held by the Xxxxx River Paper Company,
Inc. pursuant to its lease with Seller relative to the Property. In this regard,
Seller has, prior to the date hereof, advised the Xxxxx River Paper Company,
Inc. of its intention to sell the Property, and has requested that the Xxxxx
River Paper Company, Inc. confirm its decision to either exercise or waive its
right of first offer. Seller has been advised preliminarily of the Xxxxx River
Paper Company, Inc.'s intention not to
-42-
exercise its right of first offer in connection with Seller's sale of the
Property, and Seller is awaiting written confirmation thereof. In the event,
however, that, prior to the Closing, the Xxxxx River Paper Company, Inc. shall
elect to exercise such right of first offer and proceeds in accordance therewith
to close on its acquisition of the Property, Purchaser acknowledges and agrees
that Seller shall be unable to consummate the transaction contemplated herein,
and, in such event, Seller shall have the right to terminate this Agreement
prior to the Closing, in which event all documents and funds deposited by
Purchaser shall be immediately returned to Purchaser, all documents deposited by
Seller shall be immediately returned to Seller and neither party shall have any
further rights or obligations hereunder (except as set forth in Sections 3.6(b),
9.1, 11.2 and 11.12).
17. REIT
Purchaser hereby advises Seller that Purchaser is qualified as a real
estate investment trust under the provisions of the Internal Revenue Code, and
that, by reason thereof, the maintaining of such status and the avoiding of any
activity which might cause a penalty tax to be applied is of material concern to
Purchaser. Accordingly, Seller agrees to make any modifications or amendments to
this Agreement reasonably requested by Purchaser prior to the expiration of the
Inspection Period that may be necessary for Purchaser to maintain its status as
a real estate investment trust or in order for it to avoid a penalty tax;
provided, however, that Seller shall have no obligation to enter into any such
modification or amendment that would materially alter or affect, in Seller's
sole judgment, Seller's rights, duties, or obligations under this Agreement.
-43-
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first set forth above.
SELLER:
CORPORATE REALTY INCOME FUND I, L.P.
a Delaware limited partnership
By: /s/ Xxxxxx X. Xxxxxxx, Xx.
------------------------------
Xxxxxx X. Xxxxxxx, Xx.
Its General Partner
By: 1345 REALTY CORPORATION
Its General Partner
By: /s/ Xxxxxx X. Xxxxxxx, Xx.
------------------------------
Xxxxxx X. Xxxxxxx, Xx.
Its President
PURCHASER:
PACIFIC GULF PROPERTIES INC.,
a Maryland corporation
By: /s/ ILLEGIBLE
------------------------------
Its: PRES-CEO
------------------------------
By: /s/ ILLEGIBLE
------------------------------
Its: S.V.P.
------------------------------
ESCROW HOLDER:
CHICAGO TITLE INSURANCE COMPANY
By:______________________________
Its:_____________________________
-44-
EXHIBIT C
ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT ("Assignment"), is made as of the
___ day of __________, 1997 by and between CORPORATE REALTY INCOME FUND I, L.P.,
a Delaware limited partnership ("Assignor") and PACIFIC GULF PROPERTIES INC., a
Maryland corporation ("Assignee").
RECITALS
Assignor, as seller, and Assignee, as purchaser, are parties to a Purchase
and Sale Agreement ("Purchase Agreement") dated as of February 5, 1997, which
provides for the sale of Assignor's interest in certain real property (the
"Property") located in the State of California, as more particularly described
on Schedule A attached hereto; and
The Purchase Agreement provides, inter alia, (i) that Assignor shall assign
to Assignee certain leases, commission agreements, service contracts, warranties
and guaranties, (ii) that Assignee shall assume all of the obligations of Seller
thereunder from and after the date of Closing (as defined in the Purchase
Agreement), and (iii) that Assignor and Assignee shall execute this Assignment.
NOW, THEREFORE, in consideration of TEN AND NO/100 DOLLARS ($10.00) and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:
1. Definitions. As used herein, the following terms have the following
meanings:
A. Accrued Obligations. All obligations or rights to damages which
accrued or arose prior to the Closing under any of the Assigned Property,
as defined below.
B. Assumed Obligations. All obligations of Seller under the Assigned
Property, as defined below, which arise or accrue on or after the Closing.
C-1
2. Assignment. Assignor hereby conveys and assigns to Assignee all of its
right, title and interest in, to and under the following (collectively, the
"Assigned Property"):
A. those certain tenant space leases set forth on Schedule B attached
hereto; together with all rents and other sums due thereunder (other than
Delinquent Rents (as defined in the Purchase Agreement) and other
additional rent and reimbursements payable under such tenant space leases
and accruing prior to the Closing) after Closing and any and all security
deposits in connection therewith;
B. those certain equipment leases set forth on Schedule C attached
hereto, to the extent assignable;
C. those certain commission agreements set forth on Schedule D
attached hereto, to the extent assignable;
D. those certain service and maintenance contracts set forth on
Schedule E attached hereto, to the extent assignable;
E. all permits and licenses held by Assignor pertaining to the
Property, to the extent assignable;
F. all unexpired warranties, permits, approvals, licenses, legal
certificates, and authorizations pertaining to the Property, to the extent
assignable; and
G. all other intangibles pertaining to the Property, to the extent
assignable.
3. Assumption. Assignee hereby assumes and agrees timely to perform the
Assumed Obligations.
4. Indemnity. Assignee hereby indemnifies and agrees to defend and hold
harmless Assignor from any loss, cost, claim, liability, expense or demand of
whatever nature arising from any breach or failure of Assignee to observe or
perform any of the Assumed Obligations. Assignor hereby indemnifies and agrees
to defend and hold harmless Assignee from any loss, cost, claim, liability,
expense or demand of whatever nature arising from any breach or failure of
Assignor to observe or perform any of the Accrued Obligations.
C-2
5. Claims. As a condition to the liability of the other party hereunder,
the claiming parting ("Claiming Party") shall notify the other party ("Other
Party"), in writing, of any claim ("Claim") covered by this Assignment within a
reasonable time after the assertion thereof by a third party against Other
Party. In the event of such a notice of a Claim by Claiming Party to Other
Party, Other Party shall have ten (10) days after receipt thereof in which to
undertake the defense of the Claim on behalf of itself and Claiming Party. If
Other Party so undertakes to defend said Claim on behalf of itself and Claiming
Party, it shall retain and pay counsel to conduct such defense. Such counsel
shall be subject to the approval of the Claiming Party which approval shall not
be unreasonably withheld or delayed. Claiming Party may employ its own
counsel to work with Other Party as counsel in connection with the defense of
said Claim, but Claiming Party shall pay all fees and disbursements of said
counsel. Other Party may settle the Claim, without the consent of Claiming
Party, to the extent the settlement does not bind Claiming Party or impose any
obligation on Claiming Party. If Claiming Party would have any liability for the
payment and/or performance of any settlement, Claiming Party's written consent
thereto must be obtained by Other Party in order for said settlement to be
binding upon Claiming Party.
If Other Party refuses or fails to so undertake to defend the Claim,
Claiming Party may defend the same on its own behalf, may retain and pay counsel
to conduct such defense and may settle the Claim, without the consent of Other
Party. Other Party shall then reimburse Claiming Party (a) for all reasonable
costs, including court costs and reasonable attorneys' fees, incurred by
Claiming Party in connection with said defense and/or any such settlement, (b)
for all sums paid pursuant to any judgment interest against Claiming Party in
connection therewith.
C-3
IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment as
of the date first set forth above.
ASSIGNOR:
CORPORATE REALTY INCOME FUND I,
L.P.
By:_______________________________
Xxxxxx X. Xxxxxxx, Xx.,
General Partner
By: 1345 REALTY CORPORATION,
General Partner
By:__________________________
Xxxxxx X. Xxxxxxx, Xx.,
President
ASSIGNEE:
PACIFIC GULF PROPERTIES INC.
By:_______________________________
Its:___________________________
By:_______________________________
Its:___________________________
C-4
SCHEDULE A
TO ASSIGNMENT AND ASSUMPTION AGREEMENT
PARCEL ONE:
LOT A, REVERSION TO ACREAGE, PLAT NO. 3999 FILED FOR RECORD OCTOBER 08, 1996 IN
BOOK 14 OF MAPS, PAGES 54 AND 55, YOLO COUNTY RECORDS.
ASSESSOR'S PARCEL NUMBER: 000-000-00
PARCEL TWO:
AN EASEMENT FOR TRUCK STAGING AND ASSOCIATED USES IN COMMON WITH THE OWNERS OF
THE LAND BOUNDERED BY THIS EASEMENT OVER THE FOLLOWING DESCRIBED REAL PROPERTY
LOCATED IN YOLO COUNTY, CALIFORNIA:
LAND BEING DELINEATED AS "STAGING AREA" ON THAT CERTAIN UNRECORDED SURVEY,
PREPARED AUGUST 27, 1987 BY XXXXXX & XXXXXX, INC., FILE NO. 860255. A COPY OF
WHICH IS ATTACHED TO THAT CERTAIN NON-EXCLUSIVE TRUST STAGING EASEMENT RECORDED
OCTOBER 16, 1987 IN BOOK 1896 OF OFFICIAL RECORDS, PAGE 155, ALSO DESCRIBED AS
BRING A PORTION OF PARCEL 1-B-2-B, PARCEL MAP NO. 2494, VENTURA INDUSTRIAL PARK
MAP FOUR FILED JUNE 18, 1976 IN BOOK 2 OF PARCEL MAPS, PAGE 76, YOLO COUNTY,
CALIFORNIA RECORDS AND PARCELS 15 AND 16 OF SUBDIVISION NO. 2284, VENTURA
INDUSTRIAL PARK NO. 2, FILED JANUARY 18, 1980 IN BOOK 11 OF MAPS, PAGES 88 AND
89, YOLO COUNTY, CALIFORNIA RECORDS.
PARCEL THREE:
A PERPETUAL AND NON-EXCLUSIVE EASEMENT FOR INGRESS, EGRESS AND PARKING OVER THE
FOLLOWING DESCRIBED REAL PROPERTY LOCATED IN YOLO COUNTY, CALIFORNIA:
PARKING EASEMENT BEING DELINEATED AS "PARKING AREA" ON THAT CERTAIN UNRECORDED
SURVEY PREPARED AUGUST 27, 1987 BY XXXXXX & XXXXXX, INC., FILE NO. 860255, A
COPY OF WHICH IS ATTACHED TO THAT CERTAIN PERPETUAL NON-EXCLUSIVE PARKING
EASEMENT RECORDED OCTOBER 16, 1987 IN BOOK 1896 OF OFFICIAL RECORDS, PAGE 152,
ALSO DESCRIBED AS BEING PARCELS 15 AND 16 OF SUBDIVISION XX. 0000, XXXXXXX
XXXXXXXXXX XXXX XX. 0 FILED JANUARY 18, 1980 IN BOOK 11 OF MAPS, PAGES 88 AND
89, YOLO COUNTY, CALIFORNIA RECORDS.
C-5
PARCEL FOUR:
AN EASEMENT 6 FEET IN WIDTH FOR STORM DRAINAGE PURPOSES, THE CENTERLINE OF WHICH
IS DESCRIBED AS FOLLOWS:
SEGMENT NO. 1:
BEGINNING AT A POINT 3 FEET NORTH OF THE SOUTH BOUNDARY OF PARCEL 1-B-2-B,
PARCEL MAP NO. 2494, VENTURA INDUSTRIAL PARK MAP FOUR, FILED JUNE 18, 1976 IN
BOOK 2 OF PARCEL MAPS, PAGE 76, YOLO COUNTY RECORDS, AT AN EXISTING STORM
DRAINAGE PIPE; AND RUNNING THENCE WESTERLY ACROSS SAID PARCEL 1-B-2-B AND ACROSS
XXX 00 XX XXXXXXXXXXX XX. 0000, XXXXXXX XXXXXXXXXX XXXX NO. 2 FILED JANUARY 18,
1980 IN BOOK 11 OF MAPS, PAGES 88 AND 89, YOLO COUNTY RECORDS, 3 FEET NORTH OF
AND PARALLEL TO THE SOUTH BOUNDARY OF SAID PARCEL 1-B-2-B AND LOT 15 TO THE WEST
BOUNDARY OF XXX 00 XXX XXX XXXX XXXXXXXX XX XXXXX XXXXX XXXXX.
SEGMENT NO. 2:
BEGINNING AT A POINT ON THE SOUTH BOUNDARY OF SANTA XXXXX DRIVE INTERSECTED BY
THE LOT LINE COMMON TO LOTS 13 AND 14 OF SUBDIVISION XX. 0000, XXXXXXX
XXXXXXXXXX XXXX XX. 0 FILED JANUARY 18, 1980 IN BOOK 11 OF MAPS, PAGES 88 AND
89, YOLO COUNTY RECORDS; AND RUNNING THENCE SOUTH ALONG SAID COMMON LINE TO THE
SOUTHERLY BOUNDARY OF SAID LOTS 13 AND 14.
SEGMENT NO. 3:
BEGINNING AT A POINT ON THE WESTERLY BOUNDARY OF XXX 00 XX XXXXXXXXXXX XX. 0000,
XXXXXXX XXXXXXXXXX XXXX NO. 2, FILED JANUARY 18, 1980 IN BOOK 11 OF MAPS, PAGES
88 AND 89 AND THE EAST BOUNDARY OF SANTA XXXXX DRIVE; THENCE SOUTHERLY TO THE
INTERSECTION OF SANTA XXXXX DRIVE AND TANFORAN AVENUE AS SHOWN ON AFOREMENTIONED
MAP; THENCE SOUTH 39o 08'34" EAST 562.55 FEET; THENCE SOUTH 00o 23'42" WEST TO A
POINT, SAID POINT BEING THE MOST NORTHERLY CORNER COMMON TO LOTS 13 AND 14 OF
THE AFOREMENTIONED MAP.
C-6
SCHEDULE B
TO ASSIGNMENT AND ASSUMPTION AGREEMENT
Lease dated August, 1986 between Panattoni, Xxxxx and Xxxxxx Development
Company, as landlord, and Crown Zellerbach Corporation, as tenant, as amended by
that certain amendment dated October 1, 1993.
C-7
SCHEDULE C
TO ASSIGNMENT AND ASSUMPTION AGREEMENT
Equipment Leases
NONE
C-8
SCHEDULE D
TO ASSIGNMENT AND ASSUMPTION AGREEMENT
Commission Agreements
NONE
C-9
SCHEDULE E
TO ASSIGNMENT AND ASSUMPTION AGREEMENT
Service Contracts
NONE
C-10
EXHIBIT D
SELLER'S AFFIDAVIT
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
Section 1445 of the Internal Revenue Code provides that a transferee of a
United States real property interest must withhold tax if the transferor is a
foreign person. To inform the transferee that withholding of tax is not required
upon the disposition of a United States real property interest by CORPORATE
REALTY INCOME FUND I, L.P., a Delaware limited partnership ("CRIF"), the
undersigned hereby certifies the following on behalf of CRIF:
1. CRIF is not a foreign corporation, foreign partnership, foreign trust,
foreign estate or foreign person (as those terms are defined in the Internal
Revenue Code and Income Tax Regulations); and
2. CRIF's U.S. employer tax identification number is 00-0000000; and
3. CRIF's office address is 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
CRIF understands that this certification may be disclosed to the Internal
Revenue Service by transferee and that any false statement contained herein
could be punished by fine, imprisonment, or both.
The undersigned officer of CRIF declares that he has examined this
certification and to the best of his knowledge and belief it is true, correct
and complete,
and he further declares that he has authority to sign this document on behalf of
CRIF.
Dated:______________, 1997
CORPORATE REALTY INCOME FUND I, L.P.
By:________________________________
Xxxxxx X. Xxxxxxx, Xx.,
General Partner
By: 1345 REALTY CORPORATION,
General Partner
By:___________________________
Xxxxxx X. Xxxxxxx, Xx.,
President
Sworn to and subscribed before me this _____ day of __________, 1997.
_______________________________
Notary Public
EXHIBIT H
FORM OF DEED
Recording Requested by: ___________________
After Recordation, Mail This
Grant Deed To:
XXX, CASTLE & XXXXXXXXX, LLP
0000 Xxxxxxx Xxxx Xxxx
00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Attention: Xxxx Xxxx, Esq.
MAIL TAX STATEMENTS TO:
Pacific Gulf Properties Inc.
000 Xxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
--------------------------------------------------------------------------------
(Space above this line for Recorder's use)
Pursuant to Section 11932 of the California Revenue and Taxation Code, the
transfer tax due is set forth in a separate statement not to be recorded.
GRANT DEED
THIS GRANT DEED made as of this ____ day of February, 1997, between
CORPORATE REALTY INCOME FUND I, L.P., a Delaware limited partnership,
("Grantor") and PACIFIC GULF PROPERTIES INC., a Maryland corporation
("Grantee").
W I T N E S S E T H:
THAT the Grantor, in consideration of the sum of Ten Dollars ($10.00)
lawful money of the United States in
H-1
hand paid and other good and valuable consideration paid by Grantee, the receipt
and sufficiency of which is hereby acknowledged, does hereby grant unto Grantee,
its successors and assigns the following: all of Grantor's right, title, and
interest in and to the parcels of land described in Schedule A hereto (the
"Land"), together with all easements, rights of way, privileges and
appurtenances pertaining to the Land and rights of Grantor with respect to the
Land; and (b) all buildings, structures and other improvements, including the
building fixtures therein, now or hereafter located on and permanently annexed
to the Land, including, without limiting the generality of the foregoing, any
walks, parking facilities, and light standards, planters and signs, now or
hereafter located on the Land (the "Improvements") which Improvements are and
shall remain real property (the Land and the Improvements, collectively referred
to as, the "Property").
This Grant Deed is being made and delivered subject to all matters of
record and the documents and records referenced hereinafter.
TO HAVE AND TO HOLD unto Grantee, its successors and assigns, all of
Grantor's right, title and interest in and to the Property forever.
[Remainder of Page Intentionally Left Blank]
H-2
IN WITNESS WHEREOF, Grantor has caused these presents to be executed and
delivered as of the date and year first above written.
CORPORATE REALTY INCOME FUND I, L.P.,
a Delaware limited partnership
By:_____________________
Xxxxxx X. Xxxxxxx, Xx.
General Partner
By: 1345 REALTY CORPORATION,
General Partner
By:_____________________
Xxxxxx X. Xxxxxxx, Xx.
President
X-0
XXXXX XX XXX XXXX )
) ss.:
COUNTY OF NEW YORK )
On this ___ day of _______________, 1997, before me personally came Xxxxxx
X. Xxxxxxx, Xx., to me known to be the person who executed the foregoing
instrument, and who being duly sworn by me, did depose and say that he is the
President of 1345 Realty Corporation, the corporation described in and which
executed the foregoing instrument, and that he signed his name by authority of
the board of directors of said corporation.
_________________________
Notary Public
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ___ day of _______________, 1997, before me personally came Xxxxxx
X. Xxxxxxx, Xx., to me known to be the person who executed the foregoing
instrument, and who being duly sworn by me, did depose and say that he is a
general partner in Corporate Realty Income Fund I, L.P., a Delaware limited
partnership, that he had authority to sign same, and he acknowledged to me that
he executed same as the act and deed of said partnership for the uses and
purposes therein mentioned.
_________________________
Notary Public
H-4
SCHEDULE A
PARCEL ONE:
LOT A, REVERSION TO ACREAGE, PLAT NO. 3999 FILED FOR RECORD OCTOBER 08, 1996 IN
BOOK 14 OF MAPS, PAGES 54 AND 55, YOLO COUNTY RECORDS.
ASSESSOR'S PARCEL NUMBER: 000-000-00
PARCEL TWO:
AN EASEMENT FOR TRUCK STAGING AND ASSOCIATED USES IN COMMON WITH THE OWNERS OF
THE LAND BOUNDERED BY THIS EASEMENT OVER THE FOLLOWING DESCRIBED REAL PROPERTY
LOCATED IN YOLO COUNTY, CALIFORNIA:
LAND BEING DELINEATED AS "STAGING AREA" ON THAT CERTAIN UNRECORDED SURVEY,
PREPARED AUGUST 27, 1987 BY XXXXXX & XXXXXX, INC., FILE NO. 860255. A COPY OF
WHICH IS ATTACHED TO THAT CERTAIN NON-EXCLUSIVE TRUST STAGING EASEMENT RECORDED
OCTOBER 16, 1987 IN BOOK 1896 OF OFFICIAL RECORDS, PAGE 155, ALSO DESCRIBED AS
BRING A PORTION OF PARCEL 1-B-2-B, PARCEL MAP NO. 2494, VENTURA INDUSTRIAL PARK
MAP FOUR FILED JUNE 18, 1976 IN BOOK 2 OF PARCEL MAPS, PAGE 76, YOLO COUNTY,
CALIFORNIA RECORDS AND PARCELS 15 AND 16 OF SUBDIVISION NO. 2284, VENTURA
INDUSTRIAL PARK NO. 2, FILED JANUARY 18, 1980 IN BOOK 11 OF MAPS, PAGES 88 AND
89, YOLO COUNTY, CALIFORNIA RECORDS.
PARCEL THREE:
A PERPETUAL AND NON-EXCLUSIVE EASEMENT FOR INGRESS, EGRESS AND PARKING OVER THE
FOLLOWING DESCRIBED REAL PROPERTY LOCATED IN YOLO COUNTY, CALIFORNIA:
PARKING EASEMENT BEING DELINEATED AS "PARKING AREA" ON THAT CERTAIN UNRECORDED
SURVEY PREPARED AUGUST 27, 1987 BY XXXXXX & XXXXXX, INC., FILE NO. 860255, A
COPY OF WHICH IS ATTACHED TO THAT CERTAIN PERPETUAL NON-EXCLUSIVE PARKING
EASEMENT RECORDED OCTOBER 16, 1987 IN BOOK 1896 OF OFFICIAL RECORDS, PAGE 152,
ALSO DESCRIBED AS BEING PARCELS 15 AND 16 OF SUBDIVISION XX. 0000, XXXXXXX
XXXXXXXXXX XXXX XX. 0 FILED JANUARY 18, 1980 IN BOOK 11 OF MAPS, PAGES 88 AND
89, YOLO COUNTY, CALIFORNIA RECORDS.
PARCEL FOUR:
AN EASEMENT 6 FEET IN WIDTH FOR STORM DRAINAGE PURPOSES, THE CENTERLINE OF WHICH
IS DESCRIBED AS FOLLOWS:
H-5
SEGMENT NO. 1:
BEGINNING AT A POINT 3 FEET NORTH OF THE SOUTH BOUNDARY OF PARCEL 1-B-2-B,
PARCEL MAP NO. 2494, VENTURA INDUSTRIAL PARK MAP FOUR, FILED JUNE 18, 1976 IN
BOOK 2 OF PARCEL MAPS, PAGE 76, YOLO COUNTY RECORDS, AT AN EXISTING STORM
DRAINAGE PIPE; AND RUNNING THENCE WESTERLY ACROSS SAID PARCEL 1-B-2-B AND ACROSS
XXX 00 XX XXXXXXXXXXX XX. 0000, XXXXXXX XXXXXXXXXX XXXX NO. 2 FILED JANUARY 18,
1980 IN BOOK 11 OF MAPS, PAGES 88 AND 89, YOLO COUNTY RECORDS, 3 FEET NORTH OF
AND PARALLEL TO THE SOUTH BOUNDARY OF SAID PARCEL 1-B-2-B AND LOT 15 TO THE WEST
BOUNDARY OF XXX 00 XXX XXX XXXX XXXXXXXX XX XXXXX XXXXX XXXXX.
SEGMENT NO. 2:
BEGINNING AT A POINT ON THE SOUTH BOUNDARY OF SANTA XXXXX DRIVE INTERSECTED BY
THE LOT LINE COMMON TO LOTS 13 AND 14 OF SUBDIVISION XX. 0000, XXXXXXX
XXXXXXXXXX XXXX XX. 0 FILED JANUARY 18, 1980 IN BOOK 11 OF MAPS, PAGES 88 AND
89, YOLO COUNTY RECORDS; AND RUNNING THENCE SOUTH ALONG SAID COMMON LINE TO THE
SOUTHERLY BOUNDARY OF SAID LOTS 13 AND 14.
SEGMENT NO. 3:
BEGINNING AT A POINT ON THE WESTERLY BOUNDARY OF XXX 00 XX XXXXXXXXXXX XX. 0000,
XXXXXXX XXXXXXXXXX XXXX NO. 2, FILED JANUARY 18, 1980 IN BOOK 11 OF MAPS, PAGES
88 AND 89 AND THE EAST BOUNDARY OF SANTA XXXXX DRIVE; THENCE SOUTHERLY TO THE
INTERSECTION OF SANTA XXXXX DRIVE AND TANFORAN AVENUE AS SHOWN ON AFOREMENTIONED
MAP; THENCE SOUTH 39o 08'34" EAST 562.55 FEET; THENCE SOUTH 00o 23'42" WEST TO A
POINT, SAID POINT BEING THE MOST NORTHERLY CORNER COMMON TO LOTS 13 AND 14 OF
THE AFOREMENTIONED MAP.
H-6
