1
ACQUISITION AND DEVELOPMENT AGREEMENT
This Acquisition and Development Agreement (the "Agreement) is entered
into on this ___ day of November, 1996 by and between THE GYMBOREE CORPORATION,
a Delaware corporation (hereinafter "TGC"), and XXXX X. XXXXXXXXX and XXXXXXXX
PROPERTIES) a California corporation (hereinafter individually and collectively,
"Developer").
RECITALS
WHEREAS:
A. Developer is the owner of a certain tract of land in Dixon, California
as generally outlined on the attached Exhibit A (the "Tract"); and
B. Developer intends to develop the Tract into a business park to be
called the Dixon Commerce Center (the "Business Park") for lease or
sale for purposes of industrial, warehouse, distribution, research and
development, and similar uses; and
C. TGC wishes to locate the Project in the Business Park on certain terms
and conditions.
NOW THEREFORE, in consideration of the mutual promises and covenants as
incorporated herein, the parties do agree as follows:
1. DEFINITIONS
"Agreement." This Acquisition and Development Agreement.
"Closing" or "Close of Escrow." Recordation of the Deed.
"Closing Date." That date upon which Closing occurs, in no event
to occur earlier than five (5) business days after completion of all of the
conditions of this Agreement.
"Code." The Internal Revenue Code of 1986 as amended.
"Construction Contract." The Agreement between TGC (as the
"Owner") and Developer (as the "Design/Builder") in a form to be mutually agreed
upon by the parties hereto within thirty (30) days after execution of this
Agreement and attached hereto as Exhibit E and made a part hereof by reference.
"Contingency Period." The period of time commencing on the date of
execution hereof (the "Execution Date") and ending at 5:00 p.m. PDT on the
fifteenth (15th) business day after the Execution Date.
"Deed." The Grant Deed conveying title to the Property as provided
Section 3.5(a).
"Deposit." An amount equal to Twenty Thousand and no/100 Dollars
($20,000).
-1-
2
"Developer Offsite Improvements." Infrastructure improvements to
be constructed by Developer in connection with the development of the Business
Park consisting of storm drainage to the property line of the Property in
accordance with plans and specifications reasonably approved by TGC, sufficient
for the City of Xxxxx to issue a certificate of occupancy upon completion of the
building and exterior areas on the Property, without the necessity for
completion of any further Offsite Improvements. In no event shall the Developer
Offsite Improvements include either the Preliminary Offsite Improvements or the
Secondary Offsite Improvements as defined herein.
"Disapproved Exceptions." The exceptions to title described in the
Preliminary Report to which TGC objects by written notice to Developer within
the Review Period.
"East Street. That certain street running from Xxxxxx Road along
the eastern boundary of the Property as shown on Exhibit C attached hereto. This
is a definition for identification purposes only in this Agreement and does not
imply that the name of the street shall be other than as may be mutually
agreeable to Developer and TGC.
"Environmental Laws." (See "Hazardous Materials" below.)
"Escrow." That certain escrow to be opened with the Escrow Holder
in respect of this Agreement and the Closing thereof
Escrow Holder. Chicago Title Company, 000 Xxxxxx Xxxxxx, 00xx
Xxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000; telephone (000) 000-0000, fax (415)
000-0000.
"Force Majeure." As used in this Agreement, the term "Force
Majeure" means delay resulting from causes beyond a party's reasonable control
(excluding financial reasons) such as strikes, walkouts or other labor disputes,
acts of God, inability to obtain labor, materials or merchandise, governmental
restrictions, regulations or controls, judicial orders, war, riot or civil
commotion, fire or casualty. The party obligated to perform shall give prompt
notice to the other as soon as reasonably possible after the onset of such delay
stating the cause and an estimate of the duration thereof.
"Hazardous Materials." Any wastes, materials or substances
(whether in the form of liquids, solids or gases, and whether or not air-borne),
which are or are deemed to be pollutants or contaminants, or which are or are
deemed to be hazardous, toxic, ignitable, reactive, corrosive, dangerous,
harmful or injurious, or which present a risk, to public health or to the
environment, or which are or may become regulated by or under the authority of
any applicable local, state or federal laws, judgments, ordinances, orders,
rules, regulations, codes or other governmental restrictions, guidelines or
requirements, any amendments or successor(s) thereto, replacements thereof or
publications promulgated pursuant thereto (collectively "Environmental Laws").
"Land Entitlement Permit(s)." Any and all permits or approvals
required by any governmental authority precedent to TGC's ability to legally
construct the Project upon the Property including, without limitation, zoning,
general plan designation, design or architectural review and approval, zoning
variance, planned unit development approval, environmental
-2-
3
impact report, building permit, subdivision map, sewer permit, water permit, or
any permit required by any governmental agency or authority in order to
construct the Project as designed by TGC.
"Monetary Exceptions." Exceptions to fee simple absolute title to
the Property which are removable by the payment of a liquidated sum of money.
"Nonmonetary Exceptions." Exceptions to fee simple absolute title
to the Property which are not removable by the payment of a liquidated sum of
money.
"Offsite Improvements." The Developer Offsite Improvements,
Preliminary Offsite Improvements and Secondary Offsite Improvements shall be
known collectively herein as the "Offsite Improvements".
"Preliminary Offsite Improvements." All common infrastructure
"improvements constructed or to be constructed in connection with the
development of the Business Park including construction, installation, paving
and lighting of Xxxxxx Road (and including the Xxxxxx Road Project, as defined
in Section 5.3(a) hereof), and provision of gas, sewer, electricity, telephone
and water to the property line of the Property (including provision of sewer and
water on East Street in general conformance with those drawings furnished by
Developer attached hereto and incorporated herein as Exhibit J), all in
accordance with plans and specifications reasonably approved by TGC within
fifteen (15) business days after receipt thereof, all sufficient for the City of
Xxxxx to issue a certificate of occupancy upon completion of the building and
exterior areas on the Property, without the necessity for completion of any
further Offsite Improvements. In no event shall the Preliminary Offsite
Improvements include either the Developer Offsite Improvements or the Secondary
Offsite Improvements as defined herein.
"Preliminary Report." A report of the status of title issued by
Escrow Holder's title insurance divisions describing the state of title to the
Property.
"Project." TGC's distribution facility to be constructed and
located on the Property.
"Project Plans." Plans and specifications for construction of the
Project on the Property prepared under the direction of TGC in accordance with
the guideline specifications attached hereto as Exhibit D, and the Construction
Contract.
"Property." All that certain real property described in Exhibit B
and delineated in Exhibit C attached hereto and made a part hereof by reference,
along with all mineral rights, easements, hereditaments and appurtenances
pertaining thereto.
"Purchase Price." An amount equal to Seven Hundred Ninety-Three
Thousand Five Hundred and no/100 Dollars ($793,500).
"Restrictions." That certain declaration of restrictions, or
covenants, conditions and restrictions which will encumber the Tract and which
shall govern the use, design,
-3-
4
maintenance, architecture, construction and other related features of the
appearance and operation of the Business Park.
"Review Period." A period ending on the last to occur of fifteen
(15) business days from and after (i) the date TGC receives the Preliminary
Report together with copies of all instruments giving rise to the exceptions
contained therein, or (ii) the date TGC receives notice from the Developer that
the tentative subdivision map for the Business Park has been approved by the
City of Xxxxx.
"Secondary Offsite Improvements." Construction, installation,
paving, lighting and hydrants in the streets of the Business Park (other than as
set forth above under the Preliminary Offsite Improvements) including, without
limitation, East Street, all in accordance with plans and specifications
reasonably approved by TGC within fifteen (15) business days of receipt thereof.
In no event shall the Secondary Offsite Improvements include either the
Developer Offsite Improvements or the Preliminary Offsite Improvements as
defined herein.
"Situs State." The State of California.
2. PROPERTY
Subject to all of the terms, conditions and provisions of this
Agreement, and for the consideration herein set forth, Developer hereby agrees
to convey and TGC hereby agrees to accept conveyance of the Property.
3. ESCROW
3.1. Opening of Escrow. Within two (2) business days after the
execution of this Agreement by both parties, 2 signed copy of this Agreement
shall be deposited by TGC with the Escrow Holder in order to open the Escrow.
References herein to the opening of Escrow shall mean the date that a copy of
this Agreement is deposited with Escrow Holder. By such deposit, Escrow Holder
is hereby authorized and instructed to act in accordance with the provisions of
this Agreement, which Agreement together with Escrow Holder's standard general
provisions, shall constitute Escrow Holder's escrow instructions. Developer and
TGC shall each deposit such other instruments and funds as are necessary to
close the Escrow and complete the conveyance of the Property in accordance with
the terms hereof.
3.2, The Closing Date, The Escrow is scheduled to close at the offices
of the Escrow Holder after satisfaction of all conditions set forth in this
Agreement unless extended by the mutual written agreement of both parties. Time
is specifically a matter of essence with respect to the Closing Date, which may
not be extended except by mutual consent of the parties. If Escrow shall fail to
close because of failure of TGC to comply with the obligations required to be
performed by TGC hereunder, the costs incurred through the Escrow to the date
the Escrow is terminated, including the cost of the Preliminary Report, shall be
paid by TGC. If the Escrow shall fail to close because of failure of Developer
to comply with the obligations required to be performed by Developer hereunder,
such costs, without limitation of TGC's remedies, shall be paid by Developer. If
the Escrow should fail to close for any other reason, the cost of terminating
the Escrow shall be divided between the parties.
-4-
5
3.3. Execution of Additional Instructions. The obligations of each
party which are herein agreed to be undertaken by each party in the Escrow
shall be and are hereby made agreements of such party in and under this
Agreement independent of the Escrow. If any requirements relating to the duties
or obligations of Escrow Holder hereunder are not acceptable to Escrow Holder,
or if Escrow Holder requires additional instructions, the parties agree to make
such deletions, substitutions and additions to these escrow instructions
relating to such duties or obligations of Escrow Holder or clarification of
these instructions as counsel for Developer and for TGC shall mutually approve,
and which do not substantially change this Agreement or its intent. Developer
and TGC agree to perform, observe and fulfill the requirements of this Agreement
notwithstanding said deletions, substitutions or additions to said escrow
instructions.
3.4. Closing Costs. Subject to the provisions of Section 3.2 above, the
expenses of the Escrow shall be paid by Developer including: (i) an amount equal
to the premium for a CLTA Standard Coverage Policy (1990), (ii) any documentary
transfer tax on the Deed, and (iii) all sales and excise taxes. TGC shall pay
(1) recording charges, (2) Escrow fees and (3) the balance of the premium for
the Title Policy which is not paid for by Developer pursuant to clause (i) of
this Section 3.4. All other costs and charges of the Escrow for the sale shall
be prorated between TGC and the Developer in accordance with the customary
practices of Xxxxxx County, California.
3.5. Documents to be Delivered by Developer. At the Closing Developer
shall deposit into Escrow, for delivery to TGC at the Close of Escrow, the
following documents:
(a) The Deed fully executed, in recordable form, sufficient to
convey marketable and insurable fee simple title to the Property as previously
approved by TGC, in form reasonably satisfactory to TGC.
(b) An assignment to TGC of all land use entitlements, permits and
licenses held by Developer relating to the Property or required from
governmental authority as a condition to operation or occupation of the Property
or any part thereof, together with the originals or true copies thereof.
(c) Such funds necessary to comply with Developer's obligations
hereunder regarding prorations.
(d) The affidavit or the qualifying statement described in Section
8.4(a).
(e) The certificate specified in Section 10.1(a)(xii).
(f) The title policy specified in Section 7.2.
(g) A true copy of the recorded Restrictions.
(h) The recorded Option specified in Article 6.
All assignments and other documents hereinabove described shall be in
form reasonably satisfactory to TGC's counsel.
-5-
6
4. PURCHASE PRICE AND DEPOSIT
4.1. Purchase Price. The Purchase Price shall be paid in cash on the
Closing Date.
4.2. Assumption of Bonds. At the Closing TGC shall assume any special
assessment bonds encumbering the Property in respect of off-site improvements
performed for the benefit of the Business Park, which bonds are amortized over
not less than fifteen years when assessed and for which the installment payments
are includable with the real property tax xxxx (the "Bonds").
4.3. Deposit.
(a) Upon opening of Escrow, TGC shall deliver the Deposit to the
Escrow Holder. The Deposit shall be placed in an interest bearing account at the
direction of TGC. All interest earned on such account shall belong to and be
remitted to TGC.
(b) Seller agrees that on or before December 31, 1996, the Escrow
Holder is directed and authorized to take instruction solely from Buyer
regarding the release of the Deposit, and Seller does hereby so instruct the
Escrow Holder. Upon Close of Escrow, the Escrow Holder shall release the Deposit
to Buyer so long as adequate replacement funds are available in Escrow, or apply
the Deposit to the Purchase Price, at the option of Buyer.
5. DEVELOPER OBLIGATIONS
5.1. Construction Pricing.
(a) In the event that a Construction Contract is entered into
between TGC and Developer, Developer shall prepare cost estimates and bids for
the construction of the Project in accordance with the Project Plans. Within
fifteen (15) days following submittal of the final version thereof to Developer,
Developer shall submit the completed Construction Contract for the Project, the
cost of which shall not exceed Seven Million Eight Hundred Thirty-Three Thousand
Seven Hundred Twenty-Four Dollars ($7,833,724) based upon the Proposal. Such
Construction Contract shall specify that the Project shall be completed no later
than December 1, 1997; and that TGC shall have access to the Project for
installation of equipment, supplies and other improvements no later than
September 1, 1997. The contract price maximum referenced above shall be
exclusive of governmental fees and costs of the Offsite Improvements, but shall
include all development services to be provided by Developer, most particularly
including, without limitation, all services required to process approval of the
Project through all governmental agencies from whom Land Entitlement Permits may
be required, including the City of Xxxxx, the County of Xxxxxx and relevant
state agencies.
(b) TGC Construction Option. TGC shall have no obligation to enter
into the Construction Contract with Developer.
5.2. Closing and Prorations.
(a) All expenses of the Property shall be prorated and apportioned
as of 12:01 a.m. on the Closing Date, in order that Developer bear all expenses
with respect to the
-6-
7
Property through and including midnight of the day preceding the Closing Date.
Any expense amount which cannot be ascertained with certainty as of the Closing
Date shall be prorated on the basis of the parties' reasonable estimates of such
amount and shall be the subject of a final proration 30 days after the Closing
Date or as soon thereafter as the precise amounts can be ascertained. A
statement setting forth such agreed prorations shall be delivered to Escrow
Holder. Escrow Holder shall not be required to calculate any prorations.
(b) Expenses to be prorated shall include taxes, water rates and
sewer rents, if any, gas, electricity and other utility charges, any unfixed
meter charges, if any (apportioned on the basis of the last meter reading), and
other expenses customarily prorated. If possible, in lieu of prorating,
utilities and other expenses shall be contracted for in the name of TGC as of
the Closing Date.
5.3. Offsite Improvements.
(a) The Developer Offsite Improvements shall be completed by
Developer by no later than June 1, 1997. Preliminary Offsite Improvements shall
be completed by no later than December 31, 1996; provided, however, that if
Force Majeure prevents completion of the widening and resurfacing of Xxxxxx Road
(the "Xxxxxx Road Project") by December 1, 1996, the time allowed hereunder for
completion of the Xxxxxx Road Project shall be extended for a period equivalent
to the period of such delay caused by the Force Majeure events. All Secondary
Offsite Improvements which are required by the City of Xxxxx or other applicable
governmental agency to be completed by Developer shall be completed by no later
than June 1, 1997. Plans and specifications for the Offsite Improvements shall
be provided to TGC by no later than ten days following date of execution hereof
and TGC shall have ten (10) business days thereafter in which to either grant
its approval or deny approval by providing written specification of the reasons
therefor. The parties acknowledge that TGC is materially relying upon Developer
to complete its obligations as set forth herein so that the Project can be
completed in a manner which will allow TGC to obtain working occupancy of the
Project for use as a distribution facility by December 1, 1997. In the event the
Offsite Improvements required to be completed by Developer are not completed by
the respective dates set forth herein, the parties acknowledge that TGC will
suffer damage arising from TGC's need to commence and complete the Project in
the manner described in this Section 5.3(a), Developer shall be responsible for
such consequential damages, in addition to and cumulative with any other
remedies available to TGC or at law, or in equity, or under the provisions of
this Agreement.
(b) Upon completion of the Offsite Improvements as set forth
above, TGC shall pay to Developer the sum of $150,000 cash as its contribution
to the costs thereof. For purposes hereof, the term "completion" shall mean that
the City of Xxxxx and the State of California shall have approved all of the
Offsite Improvements and shall require no further work of construction or
installation be performed with respect thereto.
(c) The plans and specifications for the Secondary Offsite
Improvements to East Street shall:
-7-
8
(i) include either a loop road or road terminating in a legal cul
de sac or other satisfactory means for providing adequate access for fire
protection purposes; and
(ii) to the extent the Secondary Offsite Improvements are not to
be completed by the City of Xxxxx or any subdivision thereof, be completed by
June 1, 1997, including storm drain, the storm drainage retention pond to be
located in the Business Park and to which the Property shall be connected by
Developer, and all other improvements to be completed by Developer as set forth
in the plans and specifications.
5.4. Restrictions. Developer has prepared and delivered to TGC a set of
Restrictions for recordation as an encumbrance upon all parcels of property in
the Business Park. Within fifteen (15) business days following date of execution
hereof, TGC shall provide to Developer TGC's comments and suggested revisions
thereto. The parties shall thereafter negotiate in good faith to develop a set
of Restrictions reasonably agreeable to both parties reflecting the development
of a first class Business Park in the Northern California industrial market and
further reflecting the high standards required by TGC. The Restrictions shall
"include a requirement that Xxxxxx Road be permanently landscaped for its entire
length; and that East Street be permanently landscaped on both sides of the
street for its entire length upon which the Property fronts upon development
thereof, which landscaping shall be subject to common maintenance.
5.5. Payment of Adjustments to Proration. Either party owing the other
party a sum of money based on adjustments made to prorations after the Closing
Date shall promptly pay that sum to the other party, together with interest
thereon at the rate of the lesser of (i) the maximum interest rate permitted by
law in the Situs State and (ii) thirteen and one-half percent (13.5%) per annum,
to the date of payment if payment is not made within 10 days after mutual
agreement of the amount due.
5.6. Plans and Specifications. In the event a Construction Contract is
entered into between TGC and Developer as provided in Section 8.9 hereof,
Developer shall undertake the preparation of the Project Plans upon execution
thereof, such Project Plans to be developed based upon the schematics provided
by TGC as described in that certain proposal dated July 22, 1996 from Developer
to TGC, a copy of which is attached hereto and incorporate herein as Exhibit H
(the "Proposal"). Developer shall consult and cooperate with TGC in the
development of the design and in the preparation of cost estimates for the
construction of the Project in accordance with the Project Plans. Each party
shall act diligently and with expedition.
5.7. No Construction Contract. In the event that no Construction
Contract is entered into between TGC and Developer on or before the date
specified in Section 8.9, Developer shall have no obligation to undertake
preparation of the Project Plans as set forth in Section 5.6.
6. OPTION LAND
On the Closing Date, Developer shall grant to TGC the option to acquire
the land abutting the Property as delineated in Exhibit F (the "Option Land"),
in the form of the option
-8-
9
attached hereto as Exhibit G (the "Option") and made a part hereof by reference.
On the Closing Date, the Option shall be recorded in the official records of
Xxxxxx County.
7. TITLE CONDITION OF THE PROPERTY
7.1. Preliminary Report. As soon as reasonably possible after the
opening of Escrow, Escrow Holder shall deliver to TGC a Preliminary Report
together with copies of all instruments giving rise to the exceptions contained
in the Preliminary Report. TGC shall have the right to object to any exceptions
contained in the Preliminary Report within the Review Period. Should TGC fail to
make any objections by notice to Developer within the Review Period, the
Preliminary Report shall be deemed approved. In the event TGC objects to any
exceptions contained in the-Preliminary Report, Developer shall have until the
Closing Date to attempt, using its best efforts, to clear all Disapproved
Exceptions which efforts shall include, if necessary, the posting of bonds to
clear recorded liens. Upon receipt of notice of TGC's Disapproved Exceptions,
Developer shall: (i) clear all Monetary Exceptions at Closing, and (ii) have
until the Closing Date to attempt, using its best efforts, to clear all
Nonmonetary Exceptions or advise TGC that, based upon Developer's good faith
judgment with respect to the removability of such Nonmonetary Exceptions,
Developer is unwilling or unable to remove such items. Developer shall obtain
and deliver to Escrow Holder a demand for payment from any lien holder of record
whose lien is to be discharged at the Close of Escrow, and after approval of
such demand by Developer, Escrow Holder shall pay such demand at the Close of
Escrow. In the event Developer cannot remove from title any Disapproved
Exception by the Close of Escrow, TGC shall have the right to elect one of the
following alternatives:
(a) to waive such Disapproved Exceptions and close the Escrow, or
(b) terminate this Agreement.
7.2. Title Insurance. At the Close of Escrow and as a condition
thereto, the title insurer shall issue a firm commitment to provide an ALTA
Owners Extended Form (B-1970) Policy of Title Insurance to TGC containing such
endorsements as TGC's counsel may reasonably require, with liability in the
amount of the Purchase Price (the "Title Policy"), to be issued on commencement
of Construction of the Project, showing title to the Property vested in TGC,
subject only to the exceptions approved by TGC pursuant to Section 8.1 above and
to the non-delinquent real property taxes and special assessments referred to in
Section 5.2 above. Indemnification of the Title Insurer by Developer or any
other party, in order to induce the Title Insurer to insure any otherwise
Disapproved Exception, or to obtain any endorsement required by TGC, shall not
be allowed except with the prior written consent of TGC after full disclosure to
TGC of the nature and substance of the indemnity in the matter to be indemnified
against.
8. CONDITIONS TO TGC's OBLIGATION
8.1. Contingency Period.
(a) As a condition to TGC's obligation to purchase hereunder, TGC
shall be entitled to examine the Property, documents, and other information
specified in Section 8.2,
-9-
10
along with such other economic, governmental, development and marketing
feasibility, and physical studies and analyses as TGC may require, which
examination, analyses and studies shall be completed within the Contingency
Period. Developer shall cooperate with TGC and will assist in obtaining and
providing information requested by TGC.
(b) Developer shall provide, to the extent available to Developer,
such information, documents, data, and access no later than five (5) days from
date of execution hereof and failure to do so shall extend the Contingency
Period by one (1) day for each day of delay. The conditions of this Article 8
are for the benefit of TGC, any or all of which may be waived by TGC in writing,
at TGC's sole option.
8.2. Access and Information.
(a) Developer shall provide to TGC the following with respect to
the Property:
(i) Access to the Property by TGC, its agents or
representatives to inspect the physical condition of every portion thereof,
including, without limitation, soils reports, geology, archaeology, hazardous
waste, asbestos, endangered species, availability, capacity and costs of
utilities.
(ii) Any other information pertaining to the Property
reasonably requested by TGC to the extent such information is available to
Developer.
(b) TGC agrees to indemnify and hold Developer harmless against
any and all liability, loss, cost, damage or expense (including reasonable
attorneys' fees and costs) which Developer may sustain or incur by reason of the
negligence or intentional act of TGC, its agents or representatives in
conducting inspections of the Property pursuant to Paragraph (a)(i) of this
Section 8.2.
8.3. Intentionally Omitted.
8.4. Notice. If TGC approves all of the above, which TGC may do or
refuse to do in its sole subjective judgment, it shall so notify Developer prior
to the expiration of the Contingency Period. If TGC does not notify Developer
that it has approved the above items, this Agreement shall become null and void
and the Deposit shall be returned to Buyer forthwith, upon the expiration of the
Contingency Period, and there shall be no further obligation on the part of
either party.
8.5. Foreign Person.
(a) As a condition to the closing of this transaction, Developer
shall deliver to TGC on the Closing Date (or such earlier date as may be
required pursuant to regulations promulgated by the Secretary of the Treasury
under Section 1445 of the Code an affidavit of Developer, or an authorized
officer of Developer, sworn under penalty of perjury setting forth Developer's
United States tax identification number and stating that Developer is not a
foreign person, and is an United States Person as defined in the Code.
-10-
11
(b) It is understood and agreed that in lieu of furnishing such
nonforeign affidavit Developer may furnish to TGC a qualifying statement issued
by the United States Treasury, at such time and in such manner and subject to
such terms and conditions as may proscribed by regulations and promulgated under
Code Section 1445. Such qualifying statement shall be in form and content
satisfactory to TGC's counsel and shall provide adequate assurance that
Developer has met its obligations with respect to the taxation of foreign
persons and entities under the Code.
(c) If by the Closing Date Developer shall not have furnished to
TGC either the affidavit specified in paragraph (a) or the qualifying statement
described in paragraph (b) hereof with respect to this transaction, or such
Statement is false, TGC may at its option either: (i) adjourn the Closing until
such time as Developer has complied with the conditions set forth herein, and
such adjournment shall not place TGC in default of its obligations hereunder;
or, alternatively, (ii) TGC may withhold from the Purchase Price payable to
Developer at Close of Escrow and remit to the Internal Revenue Service, a sum
equal to ten percent (10%) of the gross selling price of the Property in
accordance with the withholding obligations imposed upon TGC pursuant to Code
Section 1445. Such withholding shall not place TGC in default under this
Agreement, and Developer shall not be entitled to claim that such withholding
shall excuse Developer's performance under the Agreement.
8.6. Waiver. In the event of a breach by Developer of any of its
covenants, representations, warranties or other agreements set forth in this
Agreement, TGC may elect (i) nevertheless to proceed with the purchase of the
Property, reserving all of its other rights and remedies available to it under
this Agreement or otherwise at law or in equity including, without limitation,
the right to collect damages for such breach from Developer and the right to
indemnification as provided in Article 12, or (ii) to terminate this Agreement
by written notice to Developer delivered prior to Closing, and upon such
termination TGC shall be relieved of all further obligations hereunder.
8.7. Approval of Board of Directors. This Agreement is subject to
approval of the Board of Directors of TGC on or before the expiration of the
Contingency Period.
8.8. Closing Deliveries. Developer shall have timely met all of its
requirements for delivery of closing materials as provided in Section 3.5.
8.9. Intentionally Omitted.
8.10. Performance Conditions.
(a) The Closing shall not occur earlier than five (5) business
days after the last to occur of the following:
(i) Receipt by TGC of written notice from the City of Xxxxx
that the City of Xxxxx Planning Commission has approved the plans and
specifications for the Business Park and the Project.
-11-
12
(ii) The Preliminary Offsite Improvements have been
completed, except that completion of the Xxxxxx Road Project shall not be
required as a condition of Closing under this Section 8.10(a).
(iii) Receipt by TGC of written assurance from the City of
Xxxxx (the "Letter of Assurance") substantially in the form attached hereto as
Exhibit I stating that: (A) the City of Xxxxx Building Department will issue
building permit for construction of the Project which is not conditioned upon
completion of the Offsite Improvements; and (B) a certificate of occupancy (or a
temporary certificate of occupancy, as the case may be) will be issued by the
City of Xxxxx upon completion of the Project in accordance with the terms of the
building permit, notwithstanding lack of completion of East Street or lack of
completion of the storm drainage retention pond to be located in the Business
Park and to which the Developer shall connect the Property.
(iv) Conveyance to Developer of that certain irrigation
parcel marked by crosshatch on Exhibit F attached hereto, which comprises a
portion of the Option Land, including, without limitation, removal of that
certain easement shown on Exhibit F as 20' Access and Water Line Easement to SID
and City of Xxxxx XX 1990 - Inst. No. 900078258.
(v) The Developer has provided the City of Xxxxx with a bond
sufficient to ensure completion of East Street as set forth in the subdivision
map approved by the City of Xxxxx of which the Property is a part.
(vi) Modification of that certain easement shown on Exhibit C
as 20' PSE per 36 PM 14 to (1) modify the north-south length of such easement so
that such easement extends from Xxxxxx Road south for a distance of two hundred
(200) feet (the "200 Foot Length") and (2) widen the east-west width of such
easement to forty (40) feet along the entire 200 Foot Length.
(vii) At TGC's option, the parties shall have executed a
letter of intent for the Construction Contract pursuant to which Developer shall
agree to design and build the Project in accordance with the terms thereof;
provided, however, that in the event the parties hereto have not executed and/or
acknowledged and accepted a letter of intent setting forth the terms of the
Construction Contract on or before December 16, 1996, any such letter of intent
and/or Construction Contract shall be deemed to be null and void and TGC shall
have the right, at its option, to terminate this Agreement by written notice to
Developer on or before December 31, 1996. In the event TGC elects to terminate
this Agreement as provided in this Section 8.10(a)(vii), this Agreement shall
become null and void upon receipt by Seller of notice from TGC of same, the
Deposit shall be returned to TGC forthwith, and there shall be no further
obligation on the part of either party.
(viii) The parties shall have developed and executed the
Restrictions as provided in Section 5.4 hereof.
(b) Developer shall not be deemed to have breached this Agreement
in the event one or more of the conditions of Section 8.10(a) cannot be
fulfilled for reasons other than the act or omission of Developer.
Notwithstanding the preceding sentence, if the Closing has
-12-
13
not occurred by March 1, 1997, TGC, at its option may terminate this Agreement
by written notice to Developer.
9. MISCELLANEOUS DATA TO BE PROVIDED BY DEVELOPER
9.1. Survey. Developer shall obtain, at its cost and expense, a survey
of the Property, showing the boundaries thereof, the location of all
improvements thereon and the location of all recorded easements which affect the
Property in form and substance sufficient to enable the title insurer to issue
an ALTA policy as described in Section 7.2 hereof. Developer shall provide TGC
with a copy of the survey and shall deliver a copy to the title insurer to
permit it to issue its required title insurance.
9.2. Assignment of Warranties. At the Closing Developer will assign to
TGC all warranties which it may have from vendors, contractors or servicing
agents with respect to the physical condition of the Property.
10. WARRANTIES AND REPRESENTATIONS
10.1. Warranties and Representations by Developer.
(a) Developer hereby makes the following additional
representations, covenants and warranties and acknowledges that the execution of
this Agreement by TGC has been made and the acquisition by TGC of the Property
will have been made in material reliance by TGC on such covenants,
representations and warranties.
(i) Litigation. To the best knowledge and belief of
Developer, there is presently no claim, litigation, proceeding or governmental
investigation pending or threatened against or relating to the Property or the
transactions contemplated hereby. Developer shall give TGC immediate notice of
any such claim, litigation proceeding or investigation which becomes known to
it prior to the Closing Date.
(ii) Compliance with Laws. No notice of violation of any
applicable zoning regulation or ordinance or other law, order, ordinance,
permit, rule, regulation or requirement, or any covenants, conditions or
restrictions affecting or relating to the use, operation or occupancy of the
Property has been given to Developer by any governmental agency having
jurisdiction or by any other person entitled to enforce the same; to the best
knowledge and belief of Developer, the Property conforms to all applicable
ordinances and other laws, order, ordinances, permits, rules, regulations and
requirements, and to all covenants, conditions and restrictions affecting or
relating to the use, operation or occupancy of the Property.
(iii) Environmental.
(A) To the best knowledge and belief of Developer, as of
the date of this Agreement and the date of Close of Escrow, Developer and the
Property are not and will not be in violation of any federal, state or local
law, ordinance or regulation relating to industrial hygiene, soil, water, or
environmental conditions on, under or about the Property including, but not
limited to, the Environmental Laws.
-13-
14
(B) To the best knowledge and belief of Developer,
during the period that Developer has owned the Property there has been no use,
presence, disposal, storage, generation, release, or threatened release (as
those terms are used in the Environmental Laws, and hereinafter collectively
referred to as "Use") of Hazardous Materials on, from or under the Property,
except as previously disclosed by Developer to TGC in writing.
(C) Developer has no knowledge of any Use of Hazardous
Materials, on, from or under the Property which may have occurred prior to
Developer taking title to the Property, except as previously disclosed by
Developer to TGC in writing.
(D) During the period that Developer has owned the
Property, there has been no enforcement action or litigation brought or
threatened against Developer or the Property, nor any settlements reached by or
with any party or parties alleging the Use of any Hazardous Materials on, from
or under the Property, except as previously disclosed by Developer to TGC in
writing.
(iv) Foreign Person. Developer is not a foreign person and is
a "United States Person" as such term is defined in Section 1445 of the Internal
Revenue Code of 1986 as amended.
(v) Permits. Developer has obtained all licenses, permits,
easements and rights of way required from all governmental authorities having
jurisdiction over the Property or from private parties for the use of the
Property and to insure vehicular and pedestrian ingress and egress to the
Property.
(vi) Public Improvements. To the best knowledge and belief of
Developer, there are presently no intended public improvements which will result
in any charge being levied or assessed against the Property or in the creation
of any lien upon the Property. Developer shall promptly notify TGC of any
changes affecting this representation, of which it becomes aware prior to the
Closing Date.
(vii) Condemnation. To the best knowledge and belief of
Developer, there is presently no pending or contemplated condemnation of the
Property or any part thereof. Developer shall promptly notify TGC of any changes
affecting this representation of which it becomes aware prior to the Closing
Date.
(viii) Utilities. All utilities necessary to service the
Property will be available to the Property at the Closing Date, or upon
completion of the Offsite Improvements, without the consent of any other person,
firm or corporation and without expense (other than normal and usual security
deposits or bonds) to TGC.
(ix) Access. There are no facts or conditions which will
result in the termination of the present access from the Property to any utility
services or to existing highways and roads.
(x) Default. The closing of the various transactions
contemplated by this Agreement will not constitute or result in any default or
event that with a notice or lapse of time, or both, would be a default, breach
or violation of any lease, mortgage, deed of trust,
-14-
15
covenant or other agreement, instrument or arrangement by which Developer or the
Property are bound, or any event which would permit any party to accelerate the
maturity of any indebtedness or other obligation. No consent or joinder by any
Partner of Developer is required for this Agreement or the performance of
Developer's obligations hereunder.
(xi) Defects. To the best knowledge and belief of Developer,
at the Closing Date, there will be no defects or conditions of the Property or
the soil which will impair the use of such Property, nor are there presently,
nor will there be in the future, any encroachments onto the Property.
(xii) Subsequent Changes in Conditions. If Developer becomes
aware of any fact or circumstances which would change a representation or
warranty, then Developer will immediately give notice of such changed fact or
circumstance to TGC, but shall not relieve Developer of its liabilities or
obligations with respect thereto (except as described in Subsection (b)).
Developer shall issue a certificate at the Closing Date stating that all of the
representations and warranties contained in this Section are true and correct as
of said date, except as to facts, if any, concerning which TGC was notified.
(xiii) Authority of Developer. Xxxxxxxx Properties is a
corporation duly organized and validly existing and in good standing under the
laws of the State of California. Developer has the authority to own and convey
the Property, this Agreement and all documents executed by Developer which are
to be delivered to TGC at the Closing are or at the time of Closing will be duly
authorized, executed and delivered by Developer and do not and at the time of
Closing will not violate any provisions of any agreement or judicial order to
which Developer is a party or to which Developer or the Property is subject.
(xiv) Property Tax Assessment. Notwithstanding any other
provision of this Agreement to the contrary, if TGC shall become liable after
the Closing for payment of any property taxes assessed against the Property for
any period of time prior to the Closing Date, Developer shall immediately pay to
TGC on demand an amount equal to such tax assessment in accordance with Section
5.6.
(b) Status At and After Closing. All representations and warranties
contained in Subsection (a) of this Section or made in writing by Developer in
connection with the transaction herein provided for shall be true and correct on
the date hereof, and on the Closing Date except to the extent TGC has been
notified to the contrary after the date hereof and prior to Closing Date, and
liability for misrepresentation or breach of warranty or covenant shall survive
the execution and delivery of this Agreement and the Closing; provided, however,
that Developer shall not be deemed to have breached this Agreement in the event
such representation or warranty is subsequently not true or correct due solely
to the act or omission of an entity or person other than Developer and Developer
has so notified TGC. It is agreed that TGC's damages resulting from
misrepresentation or breach of warranty or covenant by Developer shall include
all loss, damage, liability or expense, including court costs and reasonable
attorney's fees, reasonably incurred or sustained by TGC in connection
therewith.
(c) TGC's Rights. Upon notification of any fact which would change
any of the representations or warranties contained herein or would otherwise
constitute a breach
-15-
16
thereof, TGC shall have the option of (i) waiving the breach of warranty or
change, reserving all of its rights and remedies in respect thereof available at
law, or in equity, or under the terms hereof, (ii) agreeing with Developer to
adjust the terms hereof to compensate TGC for such change, or (iii) to terminate
this Agreement. If such fact is different because of a misrepresentation of
Developer, then the options of the preceding sentence shall be in addition to
any other remedy available to TGC at law or in equity.
As used in this Agreement, the words "To the best knowledge and belief
of Developer" includes the knowledge of any general partner of Developer and of
any agent of any general partner of Developer after due inquiry.
10.2. TGC Warranties.
(a) This Agreement and all documents executed by TGC which are to
be delivered to TGC at the Closing are or at the time of Closing will be duly
authorized, executed and delivered by TGC and do not and at the time of Closing
will not violate any provisions of any agreement or judicial order to which TGC
is a party or to which TGC is subject.
(b) The representations and warranties contained in Section 10.2
or made in writing by TGC in connection with the transaction which is the
subject of this Agreement shall be true and correct on the date hereof, and on
the Closing Date except to the extent Developer has been notified to the
contrary after the date hereof and prior to Closing Date, and liability for
misrepresentation or breach of warranty or covenant shall survive the execution
and delivery of this Agreement and the Closing; provided, however, that TGC
shall not be deemed to have breached this Agreement in the event such
representation or warranty is subsequently not true or correct due solely to the
act or omission of an entity or person other than TGC. It is agreed that
Developer's damages resulting from misrepresentation or breach of Warranty or
covenant by TGC shall include all loss, damage, liability or expense, including
court costs and reasonable attorney's fees, reasonably incurred or sustained by
Developer in connection therewith.
10.3. Representations of Authority. Each signatory party hereby
represents to the other that this Agreement has been duly executed by duly
authorized officers or general partners of such party and constitutes a valid,
binding and enforceable obligation of such party.
11. CONDEMNATION
11.1. Condemnation. In the event that, prior to the Close of Escrow, a
governmental entity shall commence any action of eminent domain to take any
portion of the Property, TGC shall have the option either to (i) elect not to
acquire the Property, in which case this Agreement shall be terminated, or (ii)
complete the acquisition of the Property, in which case TGC shall be entitled to
the proceeds of such taking.
12. INDEMNITY
12.1. Developer. Developer hereby agrees to indemnify and hold TGC
harmless from and against any and all loss, claims, damages, penalties,
liabilities, costs, or allegations of any of the foregoing, including all out of
pocket litigation costs and the actual fees and expenses of counsel,
investigation and appeal which may arise in connection with any
misrepresentation
-16-
17
made by or on behalf of Developer in connection with any certificate or other
instrument furnished or to be furnished by Developer or at its request
hereunder, any breach of Developer's warranties and representations, the failure
of Developer to fulfill any of its covenants or agreement under this Agreement,
or for any cause arising with respect to the Property prior to the Closing Date,
including but not limited to all foreseeable consequential damages. The term
"TGC" as contained herein shall include TGC, its directors, officers, employees,
partners, joint venturers and agents, and any successors to TGC's interest in
the chain of title to the Property, its directors, officers, employees,
partners, joint venturers and agents.
12.2. TGC. TGC hereby agrees to indemnify and hold Developer harmless
from and against any and all loss, claims, damages, penalties, liabilities,
costs, or allegations of any of the foregoing, including all out-of pocket
litigation costs and the actual fees and expenses of counsel, investigation and
appeal which may arise on or after the Closing Date in connection with any cause
arising with respect to the Property other than the causes discussed in Section
12.1 above, including but not limited to all foreseeable consequential damages.
13. MISCELLANEOUS
13.1. Attorneys' Fees. In the event of any action between TGC and
Developer seeking enforcement of any of the terms and conditions of this
Agreement, or in connection with the Property, the prevailing parry in such
action shall be awarded, in addition to damage, injunctive or other relief, its
reasonable costs and expenses, including but not limited to taxable costs and
reasonable attorneys' fees.
13.2. Notices. All notices under this Agreement shall be deemed
delivered upon personal delivery to TGC or Developer, as the case may be, or
five (5) business days after deposit in the United States mail, registered or
certified, postage fully prepaid and addressed to the respective parties,
effective, in the case of mailing, as at the date deposited in the mail, or on
receipt if by reputable courier service which provides written evidence of
delivery, to the addresses stated in the first paragraph of this Agreement, or
such other address as the parties may from time to time designate in writing. A
copy of notices to Developer shall be sent to:
Panattoni Xxxxxxx & Xxxxx
0000 Xxx Xxxxxx Xxxxx, Xxxxx 0
Xxxxxxxxxx, XX. 00000
Facsimile no. (000) 000-0000
Attention: Mr. Xxx Xxxxxxx
Notices to TGC shall be sent to:
The Gymboree Corporation
000 Xxxxxxx Xxxx. Xxxxx 000
Xxxxxxxxxx, XX. 00000-0000
Attention: Xxxx Xxxx, Director of
Corporate Real Estate and Facilities
Facsimile no. (000) 000-0000
-17-
18
A copy of any notice to TGC shall be sent to:
Xxxxxx X. Xxxxxx, Esq.
Bartko, Zankel, Tarrant & Xxxxxx
000 Xxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
Facsimile No. (000) 000-0000
As a matter of convenience, however, communications between TGC and Developer
shall, to the extent feasible, be conducted orally, by telephone or in person,
between counsel or other authorized agents of the parties, with such
communications to be confirmed and made effective in writing as set forth above.
13.3. Entire Agreement. This Agreement and the items incorporated
herein contain all of the agreements of the parties hereto with respect to the
matters contained herein and no prior agreement or understanding pertaining to
any such matter shall be effective for any purpose. No provisions of this
Agreement may be amended or modified in any manner whatsoever except by an
agreement in writing signed by duly authorized officers or general partners of
each of the parties hereto, except that any modifications which relate to the
adjustment of tine limitations (except the Closing Date) or the form of
documents may be made by legal counsel to the parties.
13.4. Successors. The terms, covenants and conditions of this Agreement
shall be binding upon and shall inure to the benefit of the heirs, executors,
administrators and assigns of the respective parties hereto.
13.5. Assignment. Developer may not assign its rights hereunder without
the prior written consent of TGC. TGC may assign its rights hereunder so long as
it covenants to remain responsible for the full performance hereof through Close
of Escrow.
13.6. Choice of Laws. This Agreement shall be governed by the laws of
the State of California and any question arising hereunder shall be construed or
determined according to such law.
13.7. Headings. Headings at the beginning of each numbered section of
this Agreement are solely for the convenience of the parties and are not a part
of this Agreement.
13.8. Survival, Developer's obligations pursuant to the Agreement, and
with particular reference, but not limited in any way to the indemnity set forth
in Section 14 shall survive the Close of Escrow. Developer expressly agrees that
the representations and warranties and the indemnity stated herein are not
personal to TGC and, so long as Developer is given written notice thereof by TGC
or a subsequent party in interest, the benefits hereunder may be assigned to
subsequent parties in interest to the chain of title to the Property, which
subsequent parties in interest may proceed directly against Developer to recover
pursuant to this Section.
13.9. Counterparts. This Agreement may be signed by the parties in
different counterparts and the signature pages combined to create a document
binding on all parties.
-18-
19
13.10. Brokers and Finders. In the event of a claim for broker's fee,
finder's fee, commission or other similar compensation in connection herewith
other than as set forth above, TGC, if such claim is based upon any agreement
alleged to have been made by TGC, hereby agrees to indemnify and hold Developer
harmless against any and all liability, loss, cost, damage or expense (including
reasonable attorneys' fees and costs) which Developer may sustain or incur by
reason of such claim, and Developer, if such claim is based upon any agreement
alleged to have been made by Developer, hereby agrees to indemnify and hold TGC
harmless against any and all liability, loss, cost, damage or expense (including
reasonable attorneys' fees and costs) which TGC may sustain or incur by reason
of such claim. The provisions of this Section shall survive the Closing.
13.11. No Offer. The submittal or execution of this Agreement, or a
draft thereof, by either party shall not constitute an offer, nor shall either
party be bound to any of the terms hereof until both parties have executed this
document and an original signature copy of such executed document has been
received by each party.
14. EXHIBITS
The following Exhibits are attached hereto and made a part hereof by
reference:
Exhibit A - Legal Description of Tract
Exhibit B - Legal Description of Property
Exhibit C - Plat of Property
Exhibit D - Guideline Specifications for the Project
Exhibit E - The Construction Contract
Exhibit F - Option Land
Exhibit G - Option
Exhibit H - The Proposal
Exhibit I - Letter of Assurance
Exhibit J - East Street Drawings
IN WITNESS WHEREOF, TGC and Developer have executed this Agreement as
of the date first above written.
TGC: DEVELOPER:
THE GYMBOREE CORPORATION
/s/ Xxxx X. Xxxxxxxxx
----------------------------------
By: [SIG] Xxxx X. Xxxxxxxxx
----------------------------------
By:
---------------------------------- XXXXXXXX PROPERTIES
By: [SIG]
-------------------------------
By:
-------------------------------
-19-
20
EXHIBIT A
Legal Description of Tract
(To be attached upon receipt by Buyer of the Preliminary Report.)
21
EXHIBIT B
Legal Description of Property
(To be attached upon receipt by Buyer of the Preliminary Report.)
22
[PARCEL MAP]
