EXHIBIT 10.57
PURCHASE AND SALE AGREEMENT, CONTRIBUTION AGREEMENT
AND JOINT ESCROW INSTRUCTIONS
This PURCHASE AND SALE AGREEMENT, CONTRIBUTION AGREEMENT AND JOINT ESCROW
INSTRUCTIONS (the "Agreement") is made on May 12, 1997 (the "Effective Date"),
by and between Xxxxxxx West Acquisition Company, LLC, a California limited
liability company ("Seller"), and Xxxxxx Realty, L.P., a Delaware limited
partnership ("Buyer"), with reference to the facts set forth below.
R E C I T A L S
A. Seller, as assignee of Xxxxxxx West Investment Corporation, on the one
hand, and Xxxxxxx X. Xxxxx, Trustee of The Nobbs Family Trust, and Jeunique
International, Inc., on the other hand (collectively, the "Existing Owner"),
have entered into that certain Purchase and Sale Agreement, Settlement Agreement
and Joint Escrow Instructions dated February 28, 1997 (the "Underlying Purchase
Agreement").
B. Pursuant to the Underlying Purchase Agreement, Seller has the right to
purchase from the Existing Owner (a) that certain real property located in the
City of Irvine, County of Orange, State of California, known as the Pacifica
Building and more particularly described in Exhibit "A-1 " attached hereto and
incorporated herein (the "Pacifica Property") and (b) that certain real property
located in the City of Irvine, County of Orange, State of California, known as
the Xxxxxx Technology Center and more particularly described in Exhibit "A-2"
attached hereto and incorporated herein (the "Xxxxxx Technology Property"). The
Pacifica Property and the Xxxxxx Technology Property may each be individually
referred to as the "Property" and collectively referred to as the "Properties. "
C. Seller desires to sell, and Buyer desires to purchase, a portion of
the Properties, and Seller desires to contribute the remaining portion of the
Properties to Buyer in exchange for Partnership Units (as defined below), all on
the terms and conditions set forth herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as set forth
below.
1. PURCHASE AND SALE; CONTRIBUTION. Upon and subject to the terms and
conditions set forth in this Agreement, Seller hereby agrees to sell to Buyer,
and Buyer hereby agrees to buy from Seller, a portion of the Properties ("Sale
Portion"), together with all easements, hereditaments and appurtenances thereto
and all improvements situated thereon and all personal property and intangible
property to be acquired by Seller pursuant to the Underlying Purchase Agreement
and located on and used in connection with the operation of the Properties, as
more particularly described herein. The remaining portion of the Properties
("Contribution Portion") shall be contributed by Seller to Buyer in exchange for
the Partnership Units, subject to Section 3.3 below. Buyer and Seller expressly
agree that the purchase and sale of the Pacifica Property and the Xxxxxx
Technology Property, and the transfers of title thereto, shall occur together at
the Closing (as defined below). Seller's simultaneous transfer of the Pacifica
Property and the Xxxxxx Technology Property is a
condition precedent to the parties' obligation to close. No party shall have the
right to separate the purchase and sale of these Properties.
2. PURCHASE PRICE. The purchase price for the Sale Portion of the
Properties (the "Purchase Price") shall be Twenty Million Two Hundred Fifty
Thousand Dollars ($20,250,000). The Purchase Price shall be allocated as
follows: Eight Million Dollars ($8,000,000) to the Pacifica Property and Twelve
Million Two Hundred Fifty Thousand Dollars ($12,250,000) to the Xxxxxx
Technology Property.
3. METHOD OF PAYMENT OF PURCHASE PRICE; ISSUANCE OF PARTNERSHIP UNITS.
The Purchase Price shall be paid by Buyer to Seller at the Closing (as defined
in Section 4.3 hereof). Buyer shall make the following deposits into the Escrow
(as defined in Section 4.1 hereof):
3.1 DEPOSIT. Upon opening of Escrow pursuant to Section 4.1, Buyer shall
deposit into Escrow the sum of Seven Hundred Fifty Thousand Dollars ($750,000)
(the "Initial Deposit") in cash. Unless Buyer terminates this Agreement prior to
expiration of the Contingency Period (as defined below) pursuant to Section 6,
prior to expiration of the Contingency Period, Buyer shall deposit into Escrow
an additional Two Hundred Fifty Thousand Dollars ($250,000) (the "Additional
Deposit") in cash. The Initial Deposit and, if required to be made, the
Additional Deposit, are collectively referred to herein as the "Deposit." The
Deposit shall be held in an interest bearing account selected by Buyer and
reasonably approved by Seller, with all interest accruing thereon to be paid to
Buyer at Closing or, at Buyer's election, credited against the Purchase Price
upon Closing. In the event the sale of the Properties is consummated, the
Deposit shall be paid to the Seller and credited in full against the Purchase
Price. Should the transaction fail to close for any reason other than Seller's
Default (as defined below) or the failure of a condition precedent in favor of
Buyer set forth in Sections 5 and 6 below, then the Deposit (plus any accrued
interest) shall be paid to the Seller as liquidated damages pursuant to Section
9.1 hereof.
3.2 CASH AT CLOSING. Buyer shall deposit into Escrow in cash, at least one
business day prior to the Closing Deadline (as defined below), an amount equal
to the Purchase Price, less the amount of the Deposit and any interest thereon
that Buyer elects to apply to the Purchase Price, plus the amounts of any
prorations, charges or costs payable by Buyer hereunder.
3.3 CONTRIBUTION. Seller shall contribute the Contribution Portion of the
Properties to Buyer in exchange for limited partnership units in Buyer (the
"Partnership Units") to be issued to Seller. The value of the Contribution
Portion shall be Four Million Four Hundred Seventy-Five Thousand Dollars
($4,475,000). Seller agrees to reimburse Buyer for all out-of-pocket costs
reasonably incurred by Buyer, including attorneys' fees and costs, relating to
the structuring of the Partnership Units, provided that Seller's responsibility
for such costs shall not exceed Ten Thousand Dollars ($10,000). Prior to
Closing, Buyer shall provide to Seller reasonable evidence of such costs,
including a separate breakdown of Buyer's attorneys' fees relating to the
structuring of the Partnership Units. Seller shall reimburse Buyer for such
costs at Closing. Notwithstanding the foregoing, Seller may elect to sell the
Contribution Portion to Buyer by delivering written notice to
2
Buyer and Escrow Holder at least two business days prior to the Closing
Deadline, in which event the Purchase Price to be paid in cash at Closing shall
be increased by Four Million Four Hundred Seventy-Five Thousand Dollars
($4,475,000) (for a total cash Purchase Price of Twenty-Four Million Seven
Hundred Twenty-Five Thousand Dollars ($24,725,000)), and Seller shall not
receive any Partnership Units.
3.3.1 Calculation of Number of Units. The number of Partnership
------------------------------
Units to be issued hereunder shall equal Four Million Four Hundred Seventy-Five
Thousand Dollars ($4,475,00~0) divided by the average closing price for the
Common Stock par value $.01 per share, of Xxxxxx Realty Corporation, a Delaware
corporation ("KRC"), as reported on the New York Stock Exchange Composite Tape
for the ten trading days ending on the trading day next preceding the Closing
Deadline (as defined below).
3.3.2 Issuance of Units. The issuance of Partnership Units shall
-----------------
be made pursuant to the Amended and Restated Agreement of Limited Partnership,
dated as of January 31, 1997 (the "Partnership Agreement"), of Buyer. The
parties shall take such additional actions and execute such additional
documentation as may be required by the Partnership Agreement to effect the
transactions contemplated hereby.
3.3.3 Agreement to be Bound by Partnership Agreement. Seller
----------------------------------------------
agrees that, upon receipt of the Partnership Units in consideration for the sale
of the Property, Seller will be bound by the terms of the Partnership Agreement,
which will be amended to reflect the issuance of the Partnership Units and as
otherwise provided herein. The other representations, warranties and agreements
contained in this Agreement shall not limit the generality of the foregoing.
3.3.4 Representations of Investors. Seller acknowledges its
----------------------------
understanding that the offering and sale of the Partnership Units to be acquired
by it pursuant to this Agreement are intended to be exempt from registration
under the Securities Act of 1933, as amended and the rules and regulations in
effect thereunder (the "Act"), as well as state securities laws. In furtherance
thereof, Seller represents and warrants to Buyer as follows:
(a) Seller is acquiring the Partnership Units solely for
its own account for the purpose of investment and not as a nominee or agent for
any other person and not with a view to, or for the offer or sale in connection
with, any distribution or sale thereof All of the members of Seller (the
"Members") are listed on the Member Signature Page attached hereto. Seller may,
notwithstanding the foregoing, distribute the Partnership Units to the Members,
provided that, as a condition precedent to any such distribution, all of the
Members execute and deliver to Buyer the Member Signature Page attached hereto.
By so executing the Member Signature Page, the Members acknowledge and agree
that their respective interests in the Properties are being transferred in part
in exchange for Partnership Units (whether directly or through Seller with a
distribution of the Partnership Units to the Members) and will be held by
Members. The Members further hereby make each representation and warranty of
Seller, and agree to be bound by each agreement by or for the benefit of Seller,
provided in Sections 3.3.1 through 3.3.9 of this Agreement as if "Seller."
Execution
3
and delivery of the Member Signature Page shall not otherwise be a condition to
the effectiveness of this Agreement.
(b) Seller is knowledgeable, sophisticated and
experienced in business and financial matters; Seller understands the
limitations on transfer imposed by the federal and state securities laws and as
described in this Agreement and in the Partnership Agreement. Seller is able to
bear the economic risk of holding the Partnership Units for an indefinite period
of time and is able to afford the complete loss of its investment in the
Partnership Units. Seller has reviewed all information regarding Buyer, KRC and
the Partnership Units as Seller deems necessary or desirable, and has been given
the opportunity to obtain any additional information or documents and to ask
questions and receive answers about such information and documents, Buyer, KRC
and the Partnership Units as Seller deems reasonably necessary or desirable to
evaluate the merits and risks of its investment in the Partnership Units.
(c) Seller is an "accredited investor" (as such term is
defined in Rule 501(a) of Regulation D under the Act).
(d) Seller has reviewed the representations and
warranties and agreements set forth in the Partnership Agreement, including
without limitation those set forth in Section 3.4 thereof, and hereby makes such
representations and warranties and agreements for the benefit of Buyer and all
other parties to the Partnership Agreement, as of the date hereof.
3.3.5 Transferability of Units; Redemption Rights: Registration
---------------------------------------------------------
Rights. Seller acknowledges that the Partnership Units will be subject to
------
substantial restrictions on transfer, as provided in the Partnership Agreement,
including without limitation Section 11.3 thereof. Seller further acknowledges
that its redemption rights with respect to the Partnership Units shall be
governed by Section 8.6 of the Partnership Agreement, including without
limitation the absence of any such rights thereunder prior to January 31, 1999.
Seller shall be a beneficiary of the Registration Rights Agreement, dated
January 31, 1997, by and between KRC and certain other parties thereto (the
"Registration Agreement"), with respect to the registration of any shares of
Common Stock issued with respect to the redemption of Partnership Units, as if
named as a "Holder" therein and acknowledges the limitations on such
registration (including the timing thereof) contained in the Registration
Agreement .
3.3.6 Holding Period. To allow Seller to continue to defer its
--------------
built-in gain, Buyer shall not dispose of either or both of the Properties in a
taxable transaction before January 31, 1999, or thereafter unless a shelf
registration statement is then effective with respect to all Registrable
Securities (as defined in the Registration Agreement) held by Seller, its
members or their permitted transferees.
3.3.7 Covenants. Representations and Warranties. Buyer
-----------------------------------------
represents and warrants to Seller that KRC has made all filings required under
the Securities and Exchange Act of 1934, and covenants that it will cause KRC to
continue to do so. Buyer further covenants that
4
neither Buyer nor KRC shall grant registration rights to any other party that
would materially interfere with the rights granted to Seller.
3.3.8 Distributions and Allocations.
-----------------------------
(a) Buyer and Seller agree that, pursuant to Section 5.4
of the Partnership Agreement, KRC, in its capacity as general partner of Buyer,
shall cause the Partnership Agreement to be amended to provide that for the
quarter in which the Partnership Units are issued to Seller, Seller shall be
entitled only to a distribution equal to its pro rata share of the distributions
made on all Limited Partnership Interests (as defined therein) multiplied by a
fraction, the numerator of which shall be the number of days in such quarter on
which Seller has held the Partnership Units, and the denominator of which shall
be the total number of days in such quarter.
(b) Buyer and Seller agree that, pursuant to Section 6.2B
of the Partnership Agreement, KRC, in its capacity as general partner to Buyer,
shall cause the Partnership Agreement to be amended to provide that for the
quarter in which the Partnership Units are issued to Buyer, net income and net
loss (and items thereof) shall be allocated to Seller and the other Partners in
Buyer by taking into account their varying interests in the Partnership during
the year using a method selected by the General Partner in its sole discretion,
which is in accordance with Section 706(d) of the Internal Revenue Code of 1986,
as amended.
3.3.9 Partnership Agreement Amendment. KRC, in its capacity as
-------------------------------
general partner to Buyer, hereby amends the Partnership Agreement to provide for
all the foregoing provisions.
4. ESCROW.
4.1 OPENING; JOINT INSTRUCTIONS. Within two days after the Effective
Date, Buyer and Seller shall open an escrow (the "Escrow") with Commerce Escrow
(the "Escrow Holder"). Buyer acknowledges and agrees that Seller intends to
convey (or to cause the Existing Owner to convey) to Buyer the Properties
concurrently with the closing under the Underlying Purchase Agreement.
Accordingly, Buyer agrees that Seller shall have the right to direct Commerce
Escrow to transfer the Escrow, including the Deposits and any interest thereon,
to Fidelity Title Company. In such event, Fidelity Title Company shall act as
the Escrow Holder from and after the date of such transfer. In addition, Seller
may elect to assign its rights and obligations under the Underlying Purchase
Agreement to Buyer, in which case (a) Seller and Buyer shall execute an
assignment and assumption agreement reasonably acceptable to each party and
shall deliver the same to Escrow at least one business day prior to the Closing,
(b) this Agreement shall be amended as appropriate to reflect such assignment,
and (c) Seller shall obtain the Existing Owner's consent to such assignment.
Buyer agrees to cooperate with Seller's efforts to transfer the Escrow, to cause
the closing to occur concurrently with the Closing under the Underlying Purchase
Agreement, and, at Seller's election, to cause such an assignment of the
Underlying Purchase Agreement, including executing any documents reasonably
necessary to effect such purposes. The purchase and sale of the
5
Properties shall be completed through the Escrow. This Agreement shall
constitute joint escrow instructions to the Escrow Holder in connection with the
Escrow.
4.2 ADDITIONAL INSTRUCTIONS. Buyer and Seller hereby agree to execute
such additional instructions and other documents not inconsistent with this
Agreement as may be reasonably required by the Escrow Holder.
4.3 CLOSING DEADLINE. The Actions At Closing (as defined in Section
4.5 hereof shall occur and the Escrow shall close (the "Closing") on June 3,
1997 (the "Closing Deadline"). Seller shall have the unilateral right to extend
the Closing Deadline to up to June 18, 1997, by giving Buyer and Escrow Holder
notice of its intention to extend prior to the original Closing Deadline. Time
is specifically of the essence as to the Closing Deadline, and the Closing
Deadline shall not be further extended except by the mutual written agreement of
both the Buyer and the Seller. If the Closing does not occur by the Closing
Deadline for any reason other than the default of Seller or Buyer, either party
may terminate this Agreement and the Escrow upon written notice to the other
party and Escrow Holder, in which event (a) the Deposit and any interest thereon
shall be returned to Buyer, (b) all documents and other funds delivered to
Escrow shall be returned to the party who delivered the same, and (c) the
parties shall be released from their obligations under this Agreement other than
Buyer's obligations under Sections 6.1.1, 10.4, 11 and 12.4.
4.4 SELLER'S CLOSING DOCUMENTS. Seller shall deliver to the Escrow
Holder, prior to the Closing, the following documents:
4.4.1 Deeds to the Properties, in the form attached hereto as
Exhibit "B" and incorporated herein, duly executed and acknowledged by Seller
and in recordable form (the "Grant Deeds"). Alternatively, Seller may elect to
cause the Existing Owner to convey title to the Properties directly to Buyer
pursuant to Grant Deeds executed and acknowledged by the Existing Owner;
4.4.2 A certificate of non-foreign tax status in the form of the
affidavit attached hereto as Exhibit "C" and incorporated herein which satisfies
the requirements of Section 1445 of the Internal Revenue Code, and a California
Form 590-RE which satisfies the requirements of Section 18662 of the California
Revenue and Taxation Code, duly executed by Seller's authorized signatory
(collectively, the "Non-Foreign Tax Status Certificate").
4.4.3 A duly executed Assignment of Leases ("Assignment of
Leases") in the form of Exhibit "D" attached hereto and incorporated herein,
assigning all of the Seller's rights to any leases affecting the Properties
("Leases") and the original of the promissory note from Executive Suites, duly
endorsed to Buyer;
4.4.4 A duly executed Assignment of Agreements, Warranties and
Intangible Property ("General Assignment") for each of the Properties in the
form of Exhibit "E" attached hereto and incorporated herein;
6
4.4.5 A duly executed Xxxx of Sale ("Xxxx of Sale") for each of
the Properties, in the form attached hereto as Exhibit "F" and incorporated
herein, transferring all of the Seller's interest acquired pursuant to the
Underlying Purchase Agreement in all personal property located on the Properties
to the Buyer. Alternatively, Seller may elect to cause the Existing Owner to
execute and deliver to Escrow the Assignments of Leases, the General Assignments
and the Bills of Sale in favor of Buyer;
4.4.6 Notice to each tenant of the Properties ("Tenant Notice")
advising it of the sale of the Properties and directing it to make future lease
payments to Buyer at the place designated by Buyer;
4.4.7 Any security deposits and pre-paid rent due under the
Leases that are received by Seller pursuant to the Underlying Purchase
Agreement;
4.4.8 To the extent such documents exist and are received by
Seller pursuant to the Underlying Purchase Agreement, all plans, specifications,
mechanical, electrical and plumbing layouts, operating manuals and similar
documents used by the Existing Owner in the maintenance or operation of the
Properties;
4.4.9 To the extent such documents exist and are received by
Seller pursuant to the Underlying Purchase Agreement, the originals of all
building permits, certificates of occupancy and permits and approvals of any
type or kind relating to the Properties;
4.4.10 To the extent such documents exist and are received by
Seller pursuant to the Underlying Purchase Agreement, the originals of all
current Leases (as hereinafter defined) relating to the Properties;
4.5 ACTIONS AT CLOSING. At the Closing, the Escrow Holder
shall do the following (collectively, the "Actions At Closing"):
4.5.1 Cause the Grant Deeds to be recorded in the Official
Records of Orange County, California.
4.5.2 Deliver to the Seller, the Cash Purchase Price and the
Partnership Units.
4.5.3 Transmit the Tenant Notice described in Section 4.4.6
hereof to each tenant of the Properties.
4.5.4 Deliver or cause to be delivered to Buyer the other
documents deposited by Seller with Escrow Holder under Section 4.4.
7
4.5.5 Deliver to each of Buyer and Seller a copy of the Grant
Deeds (conformed to show recording information) and deliver to Seller a copy of
each other document delivered to Escrow Holder.
4.6 CANCELLATION OF ESCROW.
4.6.1 In the event of a material default by Buyer under this
Agreement, Seller shall have the right to cancel the Escrow by notice to Buyer
and the Escrow Holder, and upon such cancellation all costs of cancellation of
the Escrow, including without limitation the cost of the preliminary title
report furnished to Buyer pursuant to Section 5.1 hereof (collectively, the
"Cancellation Costs"), shall be paid by Buyer.
4.6.2 In the event that the Closing does not occur at the time
and in the manner provided in this Agreement due to the material failure of
Seller to comply with any of its obligations under this Agreement ("Seller
Default"), Buyer shall have the right to (i) cancel the Escrow by notice to
Seller and the Escrow Holder, and upon such cancellation the Cancellation Costs
shall be paid by Seller and the Deposit, together with interest thereon, shall
be refunded to Buyer, and (ii) pursue any remedies available pursuant to Section
9.1 hereof.
4.6.3 In the event that the Closing does not occur at the time
and in the manner provided in this Agreement for any reason other than Buyer
default or Seller Default, either Buyer or Seller may cancel the Escrow by
notice to the Escrow Holder and the other, and upon such cancellation the
Cancellation Costs shall be divided equally between Buyer and Seller.
4.6.4 Upon any cancellation of the Escrow, all instruments and
documents deposited into Escrow shall be returned to the parties who deposited
the same, and Buyer shall return to Seller all reports and information delivered
to Buyer by Seller in connection with the Properties.
4.7 CLOSING COSTS AND PRORATIONS. The costs incidental to the Closing
shall be paid as follows:
4.7.1 Seller shall pay: (i) the premium for the CLTA standard
coverage policy of title insurance obtained pursuant to Section 5.2 hereof
(provided that if Buyer elects to obtain an ALTA extended coverage policy of
title insurance pursuant to Section 5.2 hereof, Buyer shall pay the additional
premium for such policy over the premium for a CLTA policy); (ii) the
documentary transfer tax on the Grant Deeds; and (iii) one-half of the Escrow
Holder's fees in connection with the Escrow.
4.7.2 Buyer shall pay: (i) the cost of recording the Grant
Deeds; (ii) the additional premium for any ALTA extended coverage policy of
title insurance and any title endorsements that Buyer elects to obtain; and
(iii) one-half of the Escrow Holder's fees in connection with the Escrow.
8
4.7.3 Except as provided in Sections 3 and 12.3 hereof, Buyer
and Seller shall each pay their own legal fees and other incidental expenses
incurred in connection with the transaction contemplated by this Agreement.
4.7.4 Taxes and assessments attributable to the Properties shall
be prorated as of the date of the Closing, based upon the latest available
information and subject to adjustment subsequent to the Closing if any such item
shall not at the time of the Closing have been finally determined for the fiscal
period in which the Closing occurs. The proceeds from the successful appeal of
any property taxes which were paid prior to the Closing shall belong to the
Seller, subject to any obligation which might exist to reimburse certain tenants
under the terms of their leases.
4.7.5 Seller shall not consent, to the extent Seller's consent
is required under the Underlying Purchase Agreement, to any new lease or lease
modifications, without the prior consent of the Buyer, which shall not be
unreasonably withheld. The Buyer's failure to respond within three business days
to Seller's presentation of the material economic terms of any proposed lease or
amendment shall constitute the Buyer's approval of the proposed lease or
amendment. The Buyer shall be responsible for all tenant improvement costs and
leasing commissions due over $2,000.00 per transaction for any transactions
approved by the Buyer prior to Closing. To the extent incurred by Seller as of
the Closing, Buyer shall reimburse Seller at Closing for such excess costs.
4.7.6 Seller shall be entitled to all rents accruing for the
period prior to Closing and Buyer shall be entitled to all rents accruing for
the period after Closing. With respect to any rent arrearages under the Leases,
Buyer shall pay to Seller any rent actually collected after Closing which is
applicable to the period preceding the Closing. Buyer shall be given a credit
against the Purchase Price for all security and damage deposits and prepaid
rents, operating reserves and payments for operating expenses which were paid
under the Leases and not paid to the Buyer in the same amount of the credit that
Seller receives therefor under the Underlying Purchase Agreement. Seller shall
cause all the utility meters to be read on the day preceding Closing and shall
be responsible for the cost of all utilities used through the day before
Closing, except to the extent such utility charges are billed and paid by
tenants directly. Tax contributions, insurance contributions and/or common area
maintenance charges and other similar items in the nature of "Additional Rent",
if any, under the Leases shall be equitably prorated as of the Closing.
4.7.7 Any dispute as to proration shall not delay the Closing,
but shall be submitted to arbitration pursuant Section 12.2 hereof.
4.8 COOPERATION. Buyer and Seller acknowledge that it may be
necessary to execute documents other than those specifically referred to herein
in order to complete the transactions contemplated by this Agreement. Buyer and
Seller hereby agree to cooperate with each other by executing such other
documents or taking such other action as may be reasonably necessary to complete
this transaction in accordance with the intent of the parties as evidenced in
this Agreement.
9
5. TITLE.
5.1 PRELIMINARY TITLE REPORT. Buyer acknowledges receipt of (a) the
Updated Preliminary Report dated March 26, 1997, issued by Fidelity National
Title (the "Title Company"), Order No. 61763-CT and the Supplemental Reports
dated April 18, 1997, and April 28, 1997, issued by the Title Company
(collectively, the "Preliminary Report"), together with copies of the documents
described in the Preliminary Report, and (b) ALTA Survey for 000 Xxxxxxxxxx
Xxxxx prepared by Xxxxxxx Engineering (the "Surveyor") dated April 19, 1997, and
the ALTA Survey of 111 Pacifica prepared by the Surveyor dated April 29, 1997
(collectively, the "Surveys") (the Preliminary Report and the Surveys may
sometimes collectively be referred to as the "Title Documents"). Buyer shall
have the right, on or before May 27, 1997, to object to any exception shown in
the Title Documents by notice to Seller (the "Objection Notice"). In the event
that Buyer fails to deliver an Objection Notice to Seller on or before May 27,
1997, Buyer shall be conclusively deemed to have approved the Title Documents
and the exceptions contained therein, and the transaction contemplated by this
Agreement shall proceed. In the event that Buyer timely delivers an Objection
Notice to Seller, Seller shall have the right to remove or agree to remove the
exceptions disapproved by the terms of the Objection Notice by delivery of
notice of its election to do so to Buyer within three business days of receipt
of the Objection Notice. If Seller removes or agrees to remove such exceptions
pursuant to this Section 5.1, the transaction contemplated by this Agreement
shall proceed. In the event that Seller does not elect to remove or agree to
remove such exceptions within five days of receipt of the Objection Notice,
Buyer may, on or before the date which is two business days after the earlier of
Seller's delivery of notice of its election not to remove such exceptions or the
expiration of Seller's five-day response period, either waive its objection in
writing, in which case the transaction contemplated by this Agreement shall
proceed, or cancel the Escrow by written notice to Seller and the Escrow Holder.
If Buyer does not waive such objection in writing by such date, then Buyer shall
be deemed to have elected to cancel the Escrow. In the event of such
cancellation of the Escrow by Buyer, this Agreement and the Escrow shall
terminate as provided in Section 4.3, and the Cancellation Costs shall be paid
in the manner provided in Section 4.6.3 hereof Notwithstanding the foregoing,
Seller shall reasonably enforce its rights to cause the Existing Owner to remove
any monetary liens of record other than liens for non-delinquent bonds, taxes
and assessments.
5.2 TITLE INSURANCE. At the time of the Closing and as a condition
thereto, the Title Company shall be unconditionally committed to issue to Buyer
a CLTA standard coverage policy of title insurance issued by the Title Company
or a commitment by the Title Company to issue such a policy, naming Buyer as
insured, in a policy amount equal to the Purchase Price, showing title to the
Properties to be vested in Buyer, subject only to (a) nondelinquent taxes and
assessments; (b) exceptions created by or resulting from the acts or omissions
of Buyer; (c) the exceptions contained in the Title Documents approved or deemed
approved by Buyer pursuant to Section 5.1 hereof; and (d) the standard printed
exceptions. Buyer shall have the right to elect to receive an ALTA owner's
extended coverage policy of title insurance with the same liability amount and
subject to the same exceptions in lieu of such CLTA policy, provided that Buyer
pays the difference in premium and any other additional costs (including without
limitation any costs of required surveys other than the
10
Surveys) attributable to such policy and provided further that the procurement
of such policy shall not result in an extension of the Closing Deadline.
6. BUYER'S CONDITIONS. Buyer's obligation to Close is subject to the
conditions provided in this Section 6. These conditions are in favor of the
Buyer only and may be waived only by the Buyer.
6.1 FEASIBILITY STUDIES. At any time on or before May 27, 1997
("Contingency Period"), Buyer shall have the right to review and approve the
matters set forth below in this Section 6.1, and Buyer's obligations under this
Agreement shall be conditioned upon Buyer's approval of such matters, in its
sole and absolute discretion. Buyer may extend the Contingency Period to no
later than June 2, 1997, if Buyer cannot complete its review of certain of the
due diligence items described in this Section 6.1 due to Buyer's inability to
obtain reports and information (other than those provided by Seller) that are
reasonably necessary to complete such review. Buyer may exercise such extension
right by delivering written notice to Seller prior to expiration of the
Contingency Period. Such notice shall state in reasonable detail the reasons
that Buyer has been unable to complete such review and shall specify which due
diligence items Buyer will be unable to complete during the original Contingency
Period (the "Incomplete Due Diligence Items"). Notwithstanding any such
extension of the Contingency Period, Buyer shall be deemed to have approved all
feasibility matters set forth in this Section 6.1 other than the Incomplete Due
Diligence Items as of expiration of the original Contingency Period.
6.1.1 INSPECTION. Buyer's approval of the results of any
inspections of the Properties or conditions that may adversely affect the
Properties to be made by consultants selected by Buyer at Buyer's sole cost.
During the Escrow, Buyer shall the right to enter the Properties during
reasonable business hours for any purpose in connection with this purchase of
the Properties. Buyer shall (a) give Seller at least two business days notice of
any entry onto the Properties, (b) be accompanied by a representative of Seller
at all times during any such entry, (c) not violate the terms of the
confidentiality provision contained in Xxxxxxx 00 xxxxxx, (x) not unreasonably
interfere with the rights of the Existing Owner or any tenant or occupant of the
Properties, and (e) not perform any invasive testing. Buyer will keep the
Properties free and clear of any mechanics' liens or materials' liens arising
out of any such entry. If the Closing does not occur for any reason, Buyer shall
promptly restore any damage to the Properties caused by Buyer or its agents,
employees or contractors. Buyer shall be responsible for all investigations of
the condition of the Properties and shall be responsible for obtaining, and for
the cost of obtaining, any and all third party reports. Buyer hereby agrees to
indemnify, defend and hold Seller, the Existing Owner and their respective
officers, shareholders, directors, employees, agents and affiliates harmless
from and against any and all claims, demands, actions, losses, liabilities,
obligations, damages, costs and expenses, including without limitation,
attorneys' fees and court costs, mechanics' liens and materialmens' liens
incurred in connection with such access, investigations or inspections. Buyer's
obligations under this Section 6.1.1 shall survive the Closing, the termination
of this Agreement, and the cancellation of the Escrow.
11
6.1.2 SOILS, GEOLOGY, STRUCTURAL AND ENVIRONMENTAL REPORTS.
Buyer's approval of soils, geology, structural and environmental and any other
engineering reports obtained by Buyer at Buyer's election and sole cost. Seller
has provided to Buyer copies of any such reports in Seller's possession without
any warranty or representation by Seller as further described in Section 10.1
below.
6.1.3 ZONING. Buyer's receipt of evidence satisfactory to Buyer
that the Properties are zoned for the purposes to which Buyer intends to utilize
them.
6.1.4 RECORDS, LEASES AND PLANS. Buyer's approval of all books,
records and reports prepared in connection with the ownership and maintenance of
the Properties to the extent in Seller's possession, including any and all
existing leases, letters of intent from prospective tenants, audited income and
expense statements and quarterly data through December 1996 which include all
sources of revenue and expense (including utility rates, ad valorem tax rates,
maintenance expenses and any anticipated capital improvements), existing notes
and deeds of trust (if any), as-built plans and specifications for the
improvements of the Properties, prior soils and engineering reports, all
recorded and unrecorded parking agreements, common area maintenance agreements
or other agreements affecting the Properties, and all governmental agency
related correspondence, building permits, and certificates of occupancy
pertaining to the Properties. Buyer acknowledges receipt of such information
prior to the Effective Date. Upon reasonable demand by Buyer, Seller shall
request additional information from the Existing Owner regarding the Properties.
6.1.5 UNDERLYING PURCHASE AGREEMENT. Buyer's approval of the
Underlying Purchase Agreement which has been delivered to Buyer prior to the
Effective Date.
6.1.6 ESTOPPEL CERTIFICATES. Estoppel certificates addressed to
Seller in the form attached hereto as Exhibit G. executed by each of the tenants
or by the Existing Owner in lieu thereof ("Estoppel Certificates"), which have
been delivered to Buyer prior to the Effective Date, and Buyer's approval of the
tenants and leases of the Property.
6.1.7 REIT DILIGENCE. Buyer's review and approval of the leases
and other agreements relating to the Properties with respect to the character of
the payments received thereunder as qualifying income under the REIT gross
income tests set forth in Section 856 of the Internal Revenue Code. Seller
agrees to make such leases and other agreements (and any other related
information) available to Buyer for its review to the extent received by Seller
under the Underlying Purchase Agreement.
The conditions set forth in this Section 6.1 shall be deemed irrevocably
and unconditionally satisfied unless Buyer delivers to Seller and Escrow Holder
on or before the expiration of the Contingency Period a written notice of
failure of such conditions, termination of this Agreement and cancellation of
Escrow. If Buyer approves or is deemed to have approved such matters, Buyer
shall deliver the Additional Deposit to Escrow prior to expiration of the
Contingency Period, which,
12
together with the Initial Deposit, shall be nonrefundable except as otherwise
expressly provided herein.
6.2 CLOSING DATE CONDITIONS. As of the Closing:
6.2.1 SELLER'S PERFORMANCE, REPRESENTATIONS AND WARRANTIES.
Seller shall have performed each and every undertaking and agreement to be
performed by it hereunder and Seller's representations and warranties shall be
true and correct in all material respects as of the Closing.
6.2.2 TITLE POLICY. The Title Company shall be irrevocably and
unconditionally committed to issue the Title Policy as set forth in Section 5.2
hereof.
6.2.3 UNDERLYING CLOSING. The closing of the sale of the
Properties to Seller pursuant to the Underlying Purchase Agreement shall have
occurred prior to or concurrently with the Closing. If, for any reason, the
Underlying Purchase Agreement terminates prior to closing thereunder, this
Agreement shall automatically terminate in accordance with Section 4.3 above.
6.2.4 ESTOPPEL CERTIFICATES. Updated Estoppel Certificates
dated as of a date not more than 30 days before the Closing shall have been
delivered by Seller to Buyer.
6.2.5 No MATERIAL ADVERSE CHANGE. There shall not have occurred
any material change with respect to the Properties that may materially and
adversely affect Buyer's use and enjoyment thereof, including without
limitation, any taking, pending taking or threatened taking of all or any
portion of the Properties by any public or quasi-public authority under the
power of eminent domain.
6.3 FAILURE OF CONDITIONS. If any of the conditions precedent set
forth in Sections 6.1 or 6.2 are neither satisfied nor waived by Buyer as
provided above, any party who is not then in default hereunder may terminate
Escrow and this Agreement by giving written notice of termination to the other
party and Escrow Agent. In such event, the Escrow and this Agreement shall
terminate as provided in Section 4.3 above. Seller's inability to satisfy any of
the foregoing conditions as specified above shall not be considered a breach of
this Agreement, and in such event, Buyer's only remedy shall be to obtain a
refund of the Deposit, and Buyer shall not, under any circumstances, be entitled
to pursue any claims for specific performance, damages or any other
reimbursements or compensation from Seller; provided, however, if the condition
precedent set forth in Section 6.2.1 is not satisfied as a result of a Seller
Default, Buyer shall be entitled to pursue its remedies under Section 9.2.
7. SELLER'S CONDITIONS. Seller's obligation to Close is subject to the
conditions provided in this Section 7. These conditions are in favor of the
Seller only and may be waived only by the Seller:
13
7.1 BUYER'S PERFORMANCE, REPRESENTATIONS AND WARRANTIES. As of the
Closing, Buyer shall have performed each and every undertaking and agreement to
be performed by it hereunder and Buyer's representations and warranties shall be
true and correct in all material respects as of the Closing.
7.2 UNDERLYING CLOSING. The closing of the sale of the Properties to
Seller pursuant to the Underlying Purchase Agreement shall have occurred prior
to or concurrently with the Closing. If, for any reason, the Underlying Purchase
Agreement terminates prior to closing thereunder, this Agreement shall
automatically terminate in accordance with Section 4.3 above.
8. POSSESSION. Upon the Closing, possession of the Properties shall be
delivered to Buyer, subject to all Leases and other matters approved by Buyer.
9. LIMITATION OF REMEDIES.
9.1 LIQUIDATED DAMAGES ON BUYER DEFAULT. IF THE CLOSING FAILS TO
OCCUR (AFTER SATISFACTION OF THE CONDITIONS SET FORTH IN SECTIONS 5.1 AND 6
HEREOF) AT THE TIME AND IN THE MANNER PROVIDED IN THIS AGREEMENT FOR ANY REASON
OTHER THAN THE FAILURE OF SELLER TO COMPLY WITH ANY OF ITS MATERIAL OBLIGATIONS
UNDER THIS AGREEMENT, BUYER AND SELLER HEREBY ACKNOWLEDGE AND AGREE THAT SELLER
WILL SUFFER DAMAGES IN AN AMOUNT WHICH WILL, DUE TO THE SPECIAL NATURE OF THE
TRANSACTION CONTEMPLATE BY THIS AGREEMENT AND THE SPECIAL NATURE OF THE
NEGOTIATIONS WHICH PRECEDED THIS AGREEMENT, BE IMPRACTICAL OR EXTREMELY
DIFFICULT TO ASCERTAIN. IN ADDITION, BUYER WISHES TO HAVE A LIMITATION PLACED
UPON THE POTENTIAL LIABILITY OF BUYER TO SELLER IN THE EVENT THE CLOSING DOES
NOT OCCUR DUE TO A BUYER DEFAULT, AND WISHES TO INDUCE SELLER TO WAIVE OTHER
REMEDIES WHICH SELLER MAY HAVE IN THE EVENT OF SUCH A BUYER DEFAULT. BUYER AND
SELLER, AFTER DUE NEGOTIATION, HEREBY ACKNOWLEDGE AND AGREE THAT THE AMOUNT OF
THE DEPOSIT, TOGETHER WITH ANY INTEREST THEREON, REPRESENTS A REASONABLE
ESTIMATE OF THE DAMAGES WHICH SELLER WILL SUSTAIN IN THE EVENT OF SUCH A BUYER
DEFAULT. BUYER AND SELLER HEREBY AGREE THAT SELLER MAY, IN THE EVENT OF SUCH A
BUYER DEFAULT, TERMINATE THIS AGREEMENT BY NOTICE TO BUYER, UNILATERALLY CANCEL
THE ESCROW AND RETAIN THE DEPOSIT AS LIQUIDATED DAMAGES. SELLER'S RIGHT TO SUCH
LIQUIDATED DAMAGES SHALL BE SELLER'S SOLE AND EXCLUSIVE REMEDY IN THE EVENT OF
THE FAILURE TO CLOSE ESCROW AS A RESULT OF A BUYER DEFAULT; PROVIDED, HOWEVER,
THAT THE PARTIES AGREE THAT IN NO EVENT SHALL THIS LIQUIDATED DAMAGES PROVISION
APPLY TO ANY BREACH OF BUYER'S OBLIGATIONS UNDER SECTIONS 6.1.1, 10.4, ll AND
12.4. THE COSTS OF THE ESCROW FOLLOWING SUCH CANCELLATION SHALL BE PAID IN THE
MANNER PROVIDED IN SECTION 4.6.1 HEREOF. SUCH RETENTION OF THE DEPOSIT BY SELLER
IS INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO
14
SELLER PURSUANT TO SECTIONS 1671, 1676 AND 1677 OF THE CALIFORNIA CIVIL CODE,
AND SHALL NOT BE DEEMED TO CONSTITUTE A FORFEITURE OR PENALTY WITHIN THE MEANING
OF SECTION 3275 OR SECTION 3369 OF THE CALIFORNIA CIVIL CODE, OR ANY SIMILAR
PROVISIONS. FOLLOWING TERMINATION OF THIS AGREEMENT, CANCELLATION OF THE ESCROW
AND RETENTION OF THE DEPOSIT AS LIQUIDATED DAMAGES PURSUANT TO THIS SECTION 9.1,
ALL OF THE RIGHTS AND OBLIGATIONS OF BUYER AND SELLER UNDER THIS AGREEMENT
(EXCEPT BUYER'S OBLIGATIONS UNDER SECTIONS 6.1.1, 10.4, 11 AND 12.4 HEREOF)
SHALL BE TERMINATED.
BUYER AND SELLER ACKNOWLEDGE THAT THEY HAVE READ AND UNDERSTAND THE PROVISIONS
OF THIS SECTION 9.1 AND BY THEIR INITIALS BELOW AGREE TO BE BOUND BY ITS TERMS
/s/ ??
-------------------- ___________________
Initials of Seller Initials of Buyer
9.2 NO EQUITABLE RELIEF ON SELLER'S DEFAULT. Buyer expressly waives
all rights to seek and to receive equitable relief, including without limitation
specific performance of this Agreement, by reason of any failure of Seller to
perform according to the terms of this Agreement, and agrees that Buyer's sole
remedy in the event of any such failure of Seller to perform shall be to receive
a refund of the Deposit and any interest accrued on the Deposit, and to seek to
recover any monetary damages in excess of such sums through arbitration pursuant
to Section 12.2 hereof, which damages Buyer expressly agrees are and shall be an
adequate remedy at law.
10. REPRESENTATIONS AND WARRANTIES.
10.1 DISCLAIMER OF WARRANTY; AS-IS SALE. Buyer and Seller hereby
acknowledge and agree that, except for the representations and warranties set
forth in Sections 10.2 and 10.3 hereof, neither Seller nor anyone on behalf of
Seller has made any statements, representations or warranties, express or
implied, written or oral, in connection with the transaction contemplated by
this Agreement, the Properties or improvements or fixtures thereon or
appurtenances thereto or their condition or fitness for use, and that following
the satisfaction of the conditions set forth in Sections 5.1 and 6 hereof, Buyer
shall accept the Properties and any improvements or fixtures thereon or
appurtenances thereto, and title to the foregoing, "AS IS" and without
representation or warranty, express or implied, written or oral, including,
without limitation, any representation or warranty in connection with hazardous,
toxic or infectious materials and substances, including, without limitation,
petroleum and petroleum products, the physical condition of the Properties, the
status of title to the Properties (including the existence of any exceptions not
shown of record), compliance of the Properties with any applicable laws or any
fees, charges or exactions that may be applicable to the Properties
(collectively, the "Property Conditions"). To the extent assignable, Seller
shall upon Closing assign to Buyer any representations and warranties made by
the Existing Owner under the Underlying Purchase Agreement. Buyer acknowledges
that it has made or will make its own
15
investigations as deemed necessary or appropriate concerning the Properties, and
that Buyer will rely solely on such investigations. Buyer specifically
acknowledges and agrees that, to the extent Seller has made or in the future
makes any documents, reports or other information regarding any aspect of the
Properties available to Buyer, including the documents, reports and information
described in Section 6.1 above, Seller has done or will be doing so only as an
accommodation to Buyer, and that Seller has made, is making and shall make no
representation or warranty of any nature concerning the accuracy or completeness
of Seller's files or concerning the authenticity, source, accuracy or
completeness of any information contained in them or furnished or to be
furnished by Seller to Buyer. Buyer further acknowledges and agrees that most of
such reports, documents and other information has been provided by the Existing
Owner under the Underlying Purchase Agreement or provided by third party
consultants. Buyer waives any claim of any nature against Seller relating to any
information, conclusion, projection or other statement of any nature contained
in such documents, reports or other information. No patent or latent condition
affecting the Properties in any way, whether or not known or discoverable or
hereafter discovered, shall affect Buyer's obligation to purchase the
Properties, nor shall give rise to any right of damages, rescission, specific
performance or otherwise against Seller. Buyer hereby irrevocably and
unconditionally releases, discharges and forever acquits Seller and its past,
present and future employees, partners, officers, directors, successors,
assigns, executors and administrators and affiliates (collectively, the
"Releasees") from all actions, suits, obligations, rights, claims, liabilities,
damages, losses, costs and expenses including attorneys fees, of any nature
whatsoever known or unknown, suspected or unsuspected, fixed or contingent,
which it now has, owns, holds or claims to have, own or hold, or at any time
heretofore had, owned, held, or claimed to have, own or hold, against Seller and
the Releasees, which Buyer may suffer or incur arising out of or relating to the
Properties, or any aspect of the Properties, including, without limitation, the
Property Conditions.
BUYER EXPRESSLY WAIVES ANY OF ITS RIGHTS GRANTED UNDER CALIFORNIA CIVIL
CODE SECTION 1542, WHICH PROVIDES AS FOLLOWS: "A GENERAL RELEASE DOES NOT EXTEND
TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT
THE TIME OR EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY
AFFECTED HIS SETTLEMENT WITH THE DEBTOR. "
10.2 REPRESENTATIONS AND WARRANTIES OF SELLER.
10.2.1 AUTHORITY OF SELLER. Seller has full authority to enter
into this Agreement and is a limited liability company duly formed and in good
standing under the laws of California and this Agreement has been duly and
validly executed by Seller and is a binding and enforceable agreement of Seller.
10.2.2 UNDERLYING PURCHASE AGREEMENT. Seller represents that, to
the actual knowledge of Seller, (a) the Underlying Purchase Agreement is in full
force and effect and has not been amended other than to revise the extended
Closing Deadline to June 18, 1997, and (h) Seller and the Existing Owner are not
in default under the Underlying Purchase Agreement in any material
16
respect. The "actual knowledge" of Seller shall mean the actual, present
knowledge, without duty of inquiry or investigation, of Xxxx Xxxxxxx, Xxx
Xxxxxxxx and Xxxx Xxxxxxxx.
10.3 AUTHORITY OF BUYER. Buyer has full authority to enter into this
Agreement and is a limited partnership duly formed and in good standing under
the laws of Delaware and is duly qualified to transact business in California,
and this Agreement has been duly and validly executed by Seller and is a binding
and enforceable agreement of Seller.
10.4 INDEMNIFICATION. Buyer and Seller agree to indemnify, protect,
defend (with legal counsel acceptable to the other party) and hold the other
party and the other party s employees, general partners, trustees, directors,
officers, affiliates, subsidiaries, agents and representatives, harmless from
and against any and all losses, claims, demands, damages, costs and expenses of
whatever nature (including, without limitation, attorneys' fees) relating to or
arising out of a breach of such party's representations and warranties set forth
in this Agreement. The covenants contained in this Section 10.4 shall survive
the termination of this Agreement and the Closing.
11. CONFIDENTIALITY. As a material inducement to Seller, Buyer covenants
that it shall at all times prior to Closing maintain strict confidentiality with
respect to (i) any documents or other information provided to Buyer by Seller or
otherwise obtained by Buyer with respect to the Properties, including any
information obtained through Buyer's inspection of the Properties, (ii) the fact
that the letter of intent dated May 1, 1997, has been signed or that this
Agreement has been entered into, (iii) negotiations concerning the purchase and
sale of the Properties and (iv) the terms of such purchase and sale, including,
without limitation, the Purchase Price. In connection therewith, neither Buyer
nor its agents, officers, directors, employees, affiliates, attorneys, or
consultants ("Buyer's Parties") shall disclose to any party, or issue any press
release or public statement regarding, any of the above matters prior to Closing
without the prior written consent of Seller, which consent may be withheld in
the sole and absolute discretion of Seller. The term "public statement"
includes, but is not limited to, (a) any oral or written statement made to any
representative of the media, or (b) any statement in reports to stockholders,
financial statements or otherwise to any person or entity. Without limiting the
foregoing, during any entry onto the Properties, Buyer shall not disclose any
such matters to the Existing Owner, any of its representatives, any tenant or
occupant or any other party. Notwithstanding the foregoing, Buyer may disclose
such information to its attorneys, accountants or lenders to the extent such
disclosure is necessary to enable such parties to provide their services to
Buyer in connection with the purchase of the Properties, provided that each such
party shall sign a confidentiality agreement in favor of Seller whereby such
party agrees to keep all such information strictly confidential.. If the Closing
does not occur for any reason, Buyer shall return all documents and information
provided by Seller to Seller immediately upon termination of this Agreement.
Buyer acknowledges that Seller will be irreparably harmed by any violation of
this confidentiality provision and that monetary damages will be inadequate to
compensate Seller. Therefore, in addition to any other remedies available to
Seller, Seller shall have the right to seek equitable relief, including, without
limitation, injunctive relief or specific performance, against Buyer in order to
enforce this confidentiality provision. Buyer's obligations under this Section
11 shall survive the termination of this Agreement.
17
12. MISCELLANEOUS.
12.1 NOTICES. All notices, consents, approvals, disapprovals or
elections required or permitted to be given under this Agreement shall be in
writing and shall be delivered personally or mailed, certified or registered
mail, return receipt requested, or sent by Federal Express or other professional
carrier or by facsimile (if confirmed by overnight delivery), to the parties at
the following addresses:
Buyer: Xxxxxx Realty L.P.
c/o Kilroy Realty Corporation
0000 Xxxx Xxxxxxxx Xxxxxxx, Xxxxx 0000
Xx Xxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx
fax no.: (000) 000-0000
with a copy to: Xxxxxx & Xxxxxxx
000 Xxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxx, Esq.
fax no.: (000) 000-0000
Seller: Xxxxxxx West Acquisition Company, LLC
0000 Xxxxxx xxx Xxx X., Xxx. 000
Xxx Xxxxx, XX 00000
Attention: Xxxx Xxxxxxx
fax no.: (000) 000-0000
with a copy to: Xxxx, Forward, Xxxxxxxx & Scripps LLP
000 Xxxx Xxxxxxxx, 00xx Xxxxx
Xxx Xxxxx, XX 00000
Attn: Xxxxx Xxxxx, Esq.
fax no.: (000) 000-0000
Notices shall be deemed given upon delivery or tender of delivery to the
intended recipient.
12.2 ARBITRATION OF DISPUTES. Any controversy or claim arising out
of or relating to the subject matter of this Agreement, or the breach thereof,
including both tort and contract claims, shall be settled as follows: the
parties to the controversy or claim shall first attempt to resolve the
controversy or claim by meeting with a mutually agreeable mediator. If the
parties to the controversy or claim are unable to agree on a mediator, then the
mediator shall be appointed by JAMS/Endispute, San Diego, California ("JAMS").
If the controversy or claim is not resolved by mediation within 60 days after
the party raising the controversy or claim first notifies the other party(ies)
thereof in
18
writing, then the controversy or claim shall be submitted to JAMS for binding
arbitration at San Diego, California, in accordance with JAMS's then current
rules. The award from the arbitration shall be binding upon all parties and
their successors, regardless of whether one of said parties fails or refuses to
participate therein, and judgment upon the award rendered by the arbitrator may
be entered in any court having jurisdiction thereof Attorneys' fees and costs
may be awarded in the discretion of the arbitrator. BY INITIALING IN THE SPACE
BELOW, YOU ARE AGREEING TO HAVE ANY DISPUTE ARISING OUT OF THE MATTERS INCLUDED
IN THE "ARBITRATION OF DISPUTES" PROVISION DECIDED BY NEUTRAL ARBITRATION AS
PROVIDED BY CALIFORNIA LAW AND YOU ARE GIVING UP ANY RIGHTS YOU MAY HAVE TO HAVE
THE DISPUTE LITIGATED IN A COURT OR JURY TRILL. BY INITIALING IN THE SPACE
BELOW, YOU ARE GIVING UP YOUR JUDICIAL RIGHTS TO DISCOVERY AND APPEAL, UNLESS
SUCH RIGHTS ARE SPECIFICALLY INCLUDED IN THE "ARBITRATION OF DISPUTES"
PROVISION. IF YOU REFUSE TO SUBMIT TO ARBITRATION AFTER AGREEING TO THIS
PROVISION, YOU MAY BE COMPELLED TO ARBITRATE UNDER THE AUTHORITY OF THE
CALIFORNIA CODE OF CIVIL PROCEDURE. YOUR AGREEMENT TO THIS PROVISION IS
VOLUNTARY.
WE HAVE READ AND UNDERSTAND THE FOREGOING, AND AGREE TO SUBMIT DISPUTES
ARISING OUT OF THE "ARBITRATION OF DISPUTES" PROVISION TO NEUTRAL ARBITRATION.
/s/[SIGNATURE ILLEGIBLE
------------------------- _____________________
Initials of Seller Initials of Buyer
12.3 ATTORNEYS' FEES. In the event of any action or arbitration
between Buyer and Seller for enforcement or interpretation of any of the terms
or conditions of this Agreement, the prevailing party in such action shall be
entitled to recover its reasonable costs and expenses, including without
limitation court costs and attorneys' fees and costs actually incurred in such
action, to enforce any judgment and on appeal, as awarded by a court of
competent jurisdiction or any arbitrator(s).
12.4 BROKERS. Each party hereby represents and warrants to the other
that it has not engaged or dealt with any broker, finder or other agent in
connection with entry into this Agreement or the transactions contemplated
hereby. Buyer and Seller each hereby indemnify, defend and hold the other
harmless from and against all costs, expenses or liabilities (including without
limitation attorneys' fees and court costs, incurred by the indemnified party in
connection with any claim or demand by any person or entity for any broker's,
finder's or other commission or fee claiming through, under or by reason of the
indemnifying party's conduct.
12.5 RISK OF LOSS. In the event that any portion of the Properties
are damaged by fire or other casualty, or all or any portion of the Properties
is condemned or taken by eminent domain by any competent authority for any
public or quasi-public use or purpose, or preliminary steps in such condemnation
or eminent domain proceedings shall have been taken before the Closing, Seller
shall give notice thereof to Buyer. In such event, if, in Buyer's reasonable
business judgment, the
19
casualty loss is expected to exceed $1,000,000 (exclusive of loss of rents) or
result in a reduction of gross income from the Properties of at least 5%, Buyer
may terminate this Agreement by notice to Seller within five days after Buyer
has received the notice referred to above, together with an estimate of the loss
or the reduction, or two business days prior to the Closing, whichever occurs
first. In the event that Buyer fails to so terminate this Agreement as
aforesaid, or if such loss is not expected to exceed $1,000,000 or result in a
5% reduction of gross income as aforesaid, then the Closing shall take place as
provided herein, and Seller shall assign to Buyer at Closing any insurance
proceeds or condemnation awards which may be paid or payable to Seller on
account of any such occurrence.
12.6 ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement among the parties pertaining to the subject matter hereof, and
supersedes all prior and contemporaneous agreements, representations and
understandings of the parties. No supplement, modification or amendment hereof
shall be binding unless executed in writing by all the parties. No waiver of any
of the provisions hereof shall be deemed, or shall constitute, a waiver of any
other provision, whether or not similar, nor shall any waiver constitute a
continuing waiver. No waiver shall be binding unless executed in writing by the
party making the waiver.
12.7 AMENDMENT. This Agreement shall not be modified or amended
except by an instrument in writing duly executed by both Buyer and Seller.
12.8 BINDING ON SUCCESSORS. Subject to Section 12.9 hereof, the
provisions of this Agreement shall inure to the benefit of and be binding on
each of the parties and on each of their respective heirs, executors,
administrators, conservators, personal representatives, successors, and assigns.
12.9 ASSIGNMENT. Neither party may assign its rights or obligations
under this Agreement.
12.10 RECORDATION. Buyer shall not record this Agreement or a
memorandum hereof.
12.11 SEVERABILITY. In the event that all or any portion of any
provision in this Agreement is held by a court of competent jurisdiction to be
illegal or unenforceable, such illegal or unenforceable provision or portion of
a provision shall be severed from the other provisions and/or portions of a
provision which shall remain in full force and effect as if the illegal or
unenforceable provision or portion of provision was not a part of this
Agreement.
12.12 COUNTERPARTS. This Agreement may be executed simultaneously in
one or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
12.13 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of California.
20
12.14 HEADINGS. The section headings and captions in this Agreement
are for convenience only and shall not limit or define the contents of this
Agreement or in any way affect the construction or interpretation of any
provision hereof.
12.15 RULES OF CONSTRUCTION. In this Agreement, unless the context
otherwise requires, words in the singular include the plural and in the plural
include the singular, and words of the masculine gender include the feminine and
the neuter, and when the sense so indicates words of the neuter gender may refer
to any gender. The word "include" shall not imply any limitation to the items
listed thereafter. This Agreement and each provision hereof have been negotiated
between the parties and their respective legal and financial advisers, and
therefore shall not be construed against any party as the drafter thereof.
12.16 TIME IS OF THE ESSENCE. Time is of the essence of this
Agreement, it being understood that the time for performance of each obligation,
including without limitation the Closing Deadline, has been the subject of
negotiation by the parties.
12.17 OPERATION OF PROPERTY. Seller shall use reasonable efforts to
enforce any provisions of the Underlying Purchase Agreement requiring the
Existing Owner to continue to manage and maintain the Properties in their
current condition or repair until the Closing. Notwithstanding the foregoing,
Seller may enter into a listing agreement for each Property substantially in the
form of and on the terms of Exhibit "I" attached hereto and incorporated herein
and any such agreements shall be binding on Buyer after the Close of Escrow.
12.18 AUDIT REQUIREMENTS. Promptly after the earlier of (a) any
assignment of the Underlying Purchase Agreement by Seller to Buyer or (b) the
Closing, Seller agrees to make a request to the Existing Owner to agree to
perform the obligations of "Seller" described in Exhibit "H" attached hereto and
incorporated herein. Buyer acknowledges and agrees that Seller makes no
assurances regarding the Existing Owner's willingness to agree to such
obligations and that Seller shall have no obligation beyond making such request.
[Remainder of Page Intentionally Left Blank]
21
12.19 TENDER. Submission of this Agreement for examination, even
though executed by Buyer, shall not bind Seller in any manner and no obligation
on the part of Seller shall arise unless and until this Agreement is executed in
the space provided below and delivered by Seller to Buyer.
IN WITNESS WHEREOF, this Agreement has been executed as of the day and year
first above written.
SELLER: XXXXXXX WEST ACQUISITION
COMPANY, LLC, a California limited
liability company
By:/s/Xxxx Xxxxxxx
-----------------------------------
Xxxx Xxxxxxx, Managing Member
BUYER: XXXXXX REALTY, L.P., a Delaware
limited partnership
By: XXXXXX REALTY CORPORATION,
a Maryland corporation, its general
partner
By:___________________________________
Its:_______________________________
22
Member Signature Page
The undersigned, constituting all of the members of Xxxxxxx West
Acquisition Company, LLC, a California limited liability company ("Seller"),
hereby execute this Member Signature Page pursuant to Section 3.3.4(a) of the
Purchase and Sale Agreement, Contribution Agreement, and Joint Escrow
Instructions dated May 12, 1997, between Seller and Xxxxxx Realty, L.P., a
Delaware limited partnership.
/s/ Xxxx Xxxxxxx /s/ Xxxxx Xxxxxxxx
-------------------- --------------------
Xxxx Xxxxxxx Xxxxx Xxxxxxxx
____________________ ____________________
Xxx Xxxxxxx Xxxxxxxx Xxxx
23
Member Signature Page
The undersigned, constituting all of the members of Xxxxxxx West
Acquisition Company, LLC, a California limited liability company ("Seller"),
hereby execute this Member Signature Page pursuant to Section 3.3.4(a) of the
Purchase and Sale Agreement, Contribution Agreement, and Joint Escrow
Instructions dated May 12, 1997, between Seller and Xxxxxx Realty, L.P., a
Delaware limited partnership.
/s/ Xxxx Xxxxxxx /s/ Xxxxx Xxxxxxxx
---------------- ------------------
Xxxx Xxxxxxx Xxxxx Xxxxxxxx
/s/ Xxx Xxxxxxx /s/ Xxxxxxxx Xxxx
--------------- ------------------
Xxx Xxxxxxx Xxxxxxxx Xxxx
24
CONSENT OF ESCROW AGENT
The undersigned Escrow Agent hereby agrees to (i) accept the foregoing
Agreement, (ii) be escrow agent under said Agreement and (iii) be bound by said
Agreement in the performance of its duties as escrow agent; provided, however,
the undersigned shall have no obligations, liability or responsibility under (i)
this Consent or otherwise unless and until said Agreement, fully signed by the
parties, has been delivered to the undersigned or (ii) any amendment to said
Agreement unless and until the same shall be accepted by the undersigned in
writing.
DATED:5/23/97 COMMERCE ESCROW
--------
("Escrow Agent")
By: /s/[SIGNITURE ILLEGIBLE]
--------------------------
Its: PRESIDENT
-------------------------
25
LIST OF EXHIBITS TO
PURCHASE AND SALE AGREEMENT
AND JOINT ESCROW INSTRUCTIONS
EXHIBIT A
Legal Descriptions of the Properties
EXHIBIT B
Form of Grant Deeds
EXHIBIT C
Form of Certificate of Non-Foreign Status
EXHIBIT D
Form of Assignment of Leases
EXHIBIT E
Form of Assignment of Agreements, Warranties and Intangible Property
EXHIBIT F
Form of Xxxx of Sale
EXHIBIT G
Form of Estoppel Certificate
EXHIBIT H
Audit Requirements
EXHIBIT I
Listing Agreement
25
EXHIBIT A-1
LEGAL DESCRIPTION OF THE PACIFICA PROPERTY
Parcel 6 of Parcel Map No. 86-438, in the City of Irvine, County of Orange,
State of California, as shown on a map filed in Book 226, Pages 36 to 39
inclusive, of Parcel Maps, in the office of the County Recorder of said County.
Except any and all oil, oil rights, minerals, mineral rights, natural gas rights
and other hydrocarbons by whatsoever name known, geothermal steam, other
material resources and all products derived from any of the foregoing that may
be within or under the land, together with the perpetual right of drilling,
mining, exploring and operating therefor and storing in and removing the same
from the land or any other land, including the right to whipstock directionally
drill and mine from lands other than those conveyed hereby, oil or gas xxxxx,
tunnels and shafts into, through or across the subsurface of the land, and to
bottom such whipstocked or directionally drilled walls, tunnels and shafts under
and beneath or beyond the exterior limits thereof, and to redrill, retunnel,
equip, maintain, repair, deepen and operate any such xxxxx or mines, without,
however, the right to drill, mine, store, explore and operate through the
surface or the upper 500 feet of the subsurface of the land as reserved by The
Irvine Company in the deed recorded December 15, 1987, as Instrument No. 87-
693030 Official Records.
Also except any and all water rights or interest therein, no matter how acquired
by Grantor, and owned or used by Grantor in connection with or with respect to
the land, together with the right and power to explore, drill, redrill, remove
and store the same from the land or to divert or otherwise utilize such water
rights or interest on any other property owned or leased by Grantor, whether
such water rights shall be riparian, overlying, appropriative, littoral,
percolating, prescriptive, adjudicated, statutory or contractual; but without,
however, any right to enter upon the surface of the land in the exercise of such
rights, as reserved by The Irvine Company in the deed recorded December 15,
1987, as Instrument No. 87-693030 Official Records.
26
EXHIBIT A-2
LEGAL DESCRIPTION OF THE XXXXXX TECHNOLOGY PROPERTY
Parcel A:
Parcels 1, 2 and 3 in the City of Irvine, County of Orange, State of California,
as shown on Parcel Map No. 85-371 filed in Book 208, Pages 30 to 33 inclusive,
of Parcel Maps, in the office of the County Recorder of said County.
Excepting therefrom all oil, oil rights, minerals, mineral rights, natural gas
rights, and other hydrocarbons by whatsoever name known, geothermal steam, any
other material resources and all products derived from any of the foregoing,
that may be within or under the land, together with the perpetual right of
drilling, mining, exploring and operating therefor and storing in and removing
the same from the land or any other land, including the right to whipstock or
directionally drill and mine from lands other than those conveyed hereby, oil or
gas xxxxx, tunnels and shafts into, through or across the subsurface of the
land, and to bottom such whipstocked or directionally drilled xxxxx, tunnels and
shafts under and beneath or beyond the exterior limits thereof, and to redrill,
equip, maintain, repair, deepen and operate any such xxxxx or mines; without,
however, the right of entry on the surface of the land or the upper 500 feet of
the subsurface of the land, as reserved by The Irvine Company, a Michigan
corporation, by deed recorded October 14, 1988, as Instrument No. 88-526481,
Official Records.
Also excepting all water rights or interests therein, no matter how acquired by
Grantor, and owned or used by Grantor in connection with or with respect to the
land, together with the right and power to explore, drill, redrill, remove and
store the same from the land or to divert or otherwise utilize such water rights
or interests on any other property owned or leased by Grantor, whether such
water rights shall be riparian, overlying, appropriative, littoral, percolating,
prescriptive, adjudicated, statutory or contractual; but without, however, any
right to enter upon the surface of the land in the exercise of such rights, as
reserved by The Irvine Company, a Michigan corporation, by deed recorded October
14, 1988, as Instrument No. 88-526481, Official Records.
Parcel B:
An easement for access, ingress and egress over and across that portion of
Parcel 4 of the aforementioned Parcel Map No. 85-371, lying within the land
described and delineated as the "Easement Area" in that certain Declaration as
to access easements affecting Parcels 1 through 11 of Final Parcel Map No. 85-
371, in the City of Irvine, California, recorded February 4, 1986, as Instrument
No. 86-047982, in the Official Records of Orange County, California, and re-
recorded February 24, 1986, as Instrument No. 86-073497, Official Records, which
easement shall be upon the same Terms and Conditions as deemed and established
in the Declaration aforementioned.
27
EXHIBIT B
FORM OF GRANT DEED
RECORDING REQUESTED BY,
AND WHEN RECORDED RETURN TO:
_______________________
_______________________
_______________________
Attn: _________________
MAIL TAX STATEMENTS TO:
_______________________
_______________________
_______________________
_______________________
Documentary Transfer Tax is not of public record and is shown on a separate
sheet attached to this deed.
GRANT DEED
FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged,
__________, hereby grants to Xxxxxx Realty, L.P., a Delaware limited
partnership, the real property located in the City of Irvine, County of Orange,
State of California, described on Exhibit A attached hereto and made a part
hereof. This conveyance is made subject to all liens, easements, covenants,
conditions, encumbrances and other matters of record.
Executed as of this _______ day of _________, 1997.
_______________________
28
EXHIBIT C
FORM OF CERTIFICATE OF NON-FOREIGN STATUS
Section 1445 of the Internal Revenue Code provides that a transferee of a
U.S. real property interest must withhold tax if the transferee is a foreign
person. To inform Xxxxxx Realty L.P., in connection with a disposition of a U.S.
real property interest by Xxxxxxx West Investment Corporation ("Transferor"),
the undersigned hereby certifies the following on behalf of Transferor:
1. Transferor is not a nonresident alien for purposes of U.S. income
taxation or a foreign corporation, foreign partnership, foreign trust, or
foreign estate (as those terms are defined in the Internal Revenue Code and
Income Tax Regulations);
2. Transferor's taxpayer identification number is ______________; and
3. Transferor's address is Xxxxxxx West Acquisition Company, LLC, 0000
Xxxxxx xxx Xxx X., Xxx. 000, Xxx Xxxxx, XX 00000
Transferor understands that this certificate may be disclosed to the
Internal Revenue Service by the transferee and that any false statement
contained herein could be punished by fine, imprisonment, or both.
Under penalty of perjury, I declare that I have examined this certificate
and to the best of my knowledge and belief it is true, correct and complete, and
I further declare that I have the authority to sign this document on behalf of
Transferor.
Dated: ______________,1997 Xxxxxxx West Acquisition Company, LLC, a
California limited liability company
By: ____________________________________
Xxxx Xxxxxxx, Managing Member
NOTICE TO TRANSFEREE: You are required by law to retain this Certificate until
the end of the fifth taxable year following the taxable year in which the
transfer takes place and to make it available to the Internal Revenue Service is
requested during that period.
29
EXHIBIT D
FORM OF ASSIGNMENT OF LEASES--PACIFICA PROPERTY
This Assignment of Leases ("Assignment") is made by ______________
("Assignor"), in favor of Xxxxxx Realty L.P., a Delaware limited partnership
("Assignee").
R E C I T A L S
A. Assignor is the lessor under certain leases executed with respect to
all improvements and fixtures located on that certain real property commonly
known as _______________, located in the City of Irvine, California (the
"Property") as more fully described in Exhibit A attached hereto, which leases
are described in Schedule 1 attached hereto (the "Leases").
B. Assignee has acquired the Property pursuant to that certain Purchase
and Sale Agreement, Contribution Agreement and Joint Escrow Instructions (the
"Purchase Agreement"), executed on May ___, 1997, between Assignee and Xxxxxxx
West Acquisition Company, LLC.
C. Assignor desires to assign its interest as lessor in the Leases to
Assignee, and Assignee desires to accept the assignment thereof.
A G R E E M E N T
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter set forth, the Assignor agrees as follows:
1. Effective as of the date hereof, Assignor hereby assigns to Assignee
all of its right, title and interest in and to the Leases.
2. Except as otherwise set forth in the Purchase Agreement, effective as
of the date hereof, by accepting this Assignment, Assignee assumes all of the
lessor's obligations under the Leases and agrees to indemnify Assignor against
and hold Assignor harmless from any and all cost, liability, loss, damage or
expense, including, without limitation, reasonable attorneys' fees, originating
after the date hereof and arising out of the lessor's obligations under the
Leases.
3. Any rental and other payments under the Leases shall be prorated
between the parties as provided in the Purchase Agreement.
4. In the event of any litigation arising out of this Assignment, the
losing party shall pay the prevailing party's costs and expenses of such
litigation, including, without limitation, reasonable attorney's fees.
30
5. This Assignment shall be binding on and inure to the benefit of the
parties hereto, their heirs, executors, administrators, successors in interest
and assigns.
6. This Assignment shall be governed by and construed in accordance with
the laws of the State of California.
Dated: __________, 1997
__________________________
31
EXHIBIT E
FORM OF ASSIGNMENT OF AGREEMENTS, WARRANTIES AND INTANGIBLE
PROPERTY -
This Assignment of Agreements, Warranties and Intangible Property
("Assignment") is made by ______________("Assignor"), in favor of Xxxxxx Realty
L.P., a Delaware limited partnership ("Assignee").
RECITALS
A. Assignor is the owner of that certain real property commonly known as
_______________, located in the City of Irvine, California (the "Property") as
more fully described in Exhibit A attached hereto.
B. The agreements and warranties (collectively, the "Agreements") and
other intangible property (collectively, the "Intangibles") described in
Schedule l attached hereto relate to the Property and Assignor's use thereof
C. Assignee has acquired the Property pursuant to that certain Purchase
and Sale Agreement, Contribution Agreement and Joint Escrow Instructions (the
"Purchase Agreement"), executed on May ___ 1997, between Assignee and Xxxxxxx
West Acquisition Company, LLC.
D. Assignor desires to assign its interest in the Agreements and
Intangibles to Assignee, and Assignee desires to accept the assignment thereof.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter set forth, the Assignor agrees as follows:
1. FOR GOOD AND VALUABLE CONSIDERATION, the receipt of which is hereby
acknowledged, effective as of the date hereof Assignor hereby assigns and
transfers unto Assignee all of Assignor's right, title, claim and interest in
and under:
(A) all warranties and guaranties made by or received from any third
party with respect to any building, building component, structure, fixture,
machinery, equipment, or material situated on, contained in any building or
other improvement situated on, or comprising a part of any building or other
improvement situated on, the Property, including, without limitation, those
warranties and guaranties listed in Schedule 1 attached hereto (collectively,
"Warranties");
(B) all of the agreements listed in Schedule l attached hereto; and
32
(C) all of the Intangibles. [IF THE ASSIGNMENT IS MADE BY SELLER,
SELLER WILL ASSIGN TO BUYER, TO THE EXTENT ASSIGNABLE, ALL REPRESENTATIONS AND
WARRANTIES OF THE EXISTING OWNER MADE IN THE ASSIGNMENTS OF AGREEMENTS,
WARRANTIES AND INTANGIBLE PROPERTY REQUIRED TO BE DELIVERED UNDER THE UNDERLYING
PURCHASE AGREEMENT.]
2. Except as otherwise set forth in the Purchase Agreement, as of the
date hereof, by accepting this Assignment, Assignee hereby assumes all of the
owner's obligations under the Agreements and agrees to indemnify Assignor
against and hold Assignor harmless from any and all cost, liability, loss,
damage or expense, including, without limitation, reasonable attorney's fees,
arising out of the owner's obligations under the Agreements on or after the date
hereof
3 . If either party hereto fails to perform any of its obligations under
this Assignment or if a dispute arises between the parties hereto concerning the
meaning or interpretation of any provision of this Assignment, and an action is
filed, the prevailing party in any such action shall be entitled to recover from
the other party, in addition to any other relief that may be granted, its court
costs and reasonable attorney's fees and disbursements. Any such reasonable
attorney's fees and other expenses incurred by either party in enforcing a
judgment in its favor under this Assignment shall be recoverable separately from
and in addition to any other amount included in such judgment, and such
attorney's fees obligation is intended to be severable from the other provisions
of this Assignment and to survive and not be merged into any such judgment.
4. This Assignment shall be binding on and inure to the benefit of the
parties hereto, their heirs, executors, administrators, successors in interest
and assigns.
5. This Assignment shall be governed by and construed in accordance with
the laws of the State of California.
_______________
33
EXHIBIT F
FORM OF XXXX OF SALE
For good and valuable consideration, the receipt of which is hereby
acknowledged, _______________ ("Seller"), does hereby sell, transfer, and convey
to Xxxxxx Realty L.P., a Delaware limited partnership ("Buyer"), without
representation or warranty, express or implied, all personal property owned by
Seller and located on or in or used in connection with the , located in the City
of Irvine California, including without limitation, those items described in
Schedule 1 attached hereto.
Dated: _______________, 1997
SELLER:
________________________________________
34
[SCHEDULE 1 TO BE PROVIDED]
35
EXHIBIT G
FORM OF ESTOPPEL CERTIFICATE
THE UNDERSIGNED, _____________ ("TENANT"), HEREBY CERTIFIES TO XXXXXXX WEST
INVESTMENT CORPORATION, AND ITS AFFILIATES, ASSIGNEES AND SUCCESSORS-IN-INTEREST
(COLLECTIVELY "PURCHASER"), AND ANY LENDER THAT MAY MAKE A LOAN TO PURCHASER
SECURED BY A LIEN ON ALL OR A PORTION OF THE PROPERTY OF WHICH THE PREMISES
DESCRIBED BELOW ARE A PART (COLLECTIVELY, "LENDER"), AS FOLLOWS:
1. Annexed hereto as Exhibit A is a true and current copy of the lease,
dated as of ______________, 19__ together with those certain amendments,
supplements and modifications thereto dated as of ______________ (write "NONE"
if no amendments) (collectively, the "Lease"), by and between the undersigned,
as Tenant, and _____________ as landlord ("Landlord"), covering certain office
space ("Premises") in the buildings) located at [111 Pacifica or 000-000
Xxxxxxxxxx Xxxxx], Xxxx xx Xxxxxx, Xxxxxxxxxx ("Building").
2. The Lease is valid and in full force and effect on the date hereof and
has been duly executed and delivered on behalf of the undersigned pursuant to
proper authority. The termination date of the present term of the Lease,
excluding renewals, is _______________. Tenant has no options to extend the term
of the Lease except as follows: _______________.
3. There are no other agreements between Landlord and Tenant with respect
to the Premises.
4. There are no uncured defaults on the part of Tenant or on the part of
Landlord under the Lease, and no event has occurred and no condition exists
which, with the giving of notice or the lapse of time, or both, would constitute
a default of the Lease.
5. Fixed Rent (including any cost of living increases) payable by Tenant
presently is $ _________ per month, and no such rent has been paid more than 30
days in advance of its due date. Tenant's security deposit is $ _________.
Tenant has no claim against Landlord for any other deposit.
6. Additional Rent including Tenant's share of taxes and common area
expenses) payable by Tenant is presently $ __________ per month, and no such
rent has been paid more than 30 days in advance of its due date.
7. Tenant neither has nor claims any present charge, lien, claim,
counterclaim, defense or offset against Landlord under the Lease or otherwise,
against rents or other charges due or to become due thereunder, or against any
other person in connection with the Lease or the Premises. Tenant is not
entitled to any concession, rebate, allowance or free rent for any period after
the date of this certificate, except as follows: _________________________.
36
8. Tenant has accepted possession of the Premises, and any improvements
required by the terms of the Lease to be made by the lessor thereunder have been
completed to the satisfaction of Tenant. All duties of Landlord of an inducement
nature have been fulfilled.
9. There are no actions, whether voluntary or otherwise, pending against
the undersigned under the bankruptcy or insolvency laws or codes of the United
States or any state thereof.
10. The address for notices to be sent to Tenant is as set forth in the
Lease.
11. Tenant has no option to expand the Premises.
12. Tenant has no right of first refusal, option or other right to
purchase the Premises or the Building, nor does Tenant have any right to
unilaterally cancel or terminate the Lease with respect to all or any portion of
the Premises demised thereunder.
13. There are no subleases or assignments under or in connection with the
Lease.
14. Tenant has not received notice of any prior sale, transfer or
assignment of the Lease or the rents thereunder.
15. Tenant recognizes acknowledges that it is making these certifications
to Purchaser with the intent that Purchaser will fully rely on Tenant's
certifications in purchasing the Property and that any Lender will rely on
Tenant's certifications in making a loan to Purchaser and accepting an
assignment of Purchaser's interest in the Lease.
16. The provisions hereof shall be binding upon and inure to the benefit
of the successors, assigns, personal representatives and heirs of Tenant and
Purchaser (including, without limitation, any of Purchaser's lenders that may
make a loan secured by the Property).
Dated: ________________, 1997
37
EXHIBIT H
8-K AND AUDIT REQUIREMENTS
For the period time commencing on the Effective Date and continuing through
the first anniversary of the Closing Date, Seller shall, from time to time, upon
reasonable advance notice from Buyer, provide Buyer and its representatives,
agents and employees with access to all financial and other information
pertaining to the period of Seller's ownership and operation of the Property,
which information is relevant and reasonably necessary, in the opinion of
Buyer's outside, third-party accountants (the "Accountants"), to enable Buyer
and its Accountants to prepare financial statements in compliance with any or
all of (a) Rule 3-14 of Regulation S-X of the Securities and Exchange Commission
(the "Commission"), (b) any other rule issued by the Commission and applicable
to Buyer, and (c) any registration statement, report or disclosure statement
filed with the Commission by, or on behalf of Buyer; provided, however, that in
any such event(s), Buyer shall reimburse Seller for those third-party, out-of-
pocket costs and expenses that Seller incurs in order to comply with the
foregoing requirement. Seller shall provide such information, and documentation
on a per-building basis, if available. Seller agrees to provide the following
information and documentation that Buyer and the Accountants may require in
order to comply with (a), (h) and (c) above.
1. Rent rolls for the calendar month in which the Closing occurs and the
eleven (11) calendar months immediately preceding the calendar month in which
the Closing occurs;
2. Seller's written analysis of both (a) scheduled increases in base rent
required under the Lease in effect on the Closing Date; and (h) rent concessions
imposed by those Leases, and the straight line effect of (a) and (h);
3. Seller's internally-prepared operating statements;
4. Most currently available real estate tax bills;
5. Access to Seller's cash receipt journal(s) and bank statements for
the Property;
6. Seller's general ledger with respect to the Property;
7. Seller's schedule of expense reimbursements required under the tenant
leases in effect on the Closing Date;
8. Schedule of those items of repairs and maintenance performed by, or at
the direction of Seller, during Seller's final fiscal year in which Seller owns
and operates the Property (the "Final Fiscal Year");
9. Schedule of those capital improvements and fixed asset additions made
by, or at the direction of, Seller during the Final Fiscal Year;
38
10. Access to Seller's invoices with respect to expenditures made during
the Final Fiscal Year;
11. Access (during normal and customary business hours) to responsible
personnel to answer accounting questions; and
12. A representation letter in such form as is reasonably required by
Buyer, signed by the individual(s) responsible for Seller's financial reporting,
as prescribed by generally accepted auditing standards promulgated by the
Auditing Standards Division of the American Institute of Certified Public
Accountants, which representation letter may be required to assist the
Accountants in rendering an opinion on such financial statements.
39
EXHIBIT 1
XXXXXXX WEST INVESTMENT CORPORATION
EXCLUSIVE AUTHORIZATION & RIGHT TO LEASE
--------------------------------------------------------------------------------
BROKER: ITC REAL ESTATE GROUP
OWNER: XXXXXXX WEST INVESTMENT CORPORATION,
A DELAWARE CORPORATION, OR ASSIGNEE
OWNER'S AGENT: XXXXXXX WEST INVESTMENT CORPORATION,
A DELAWARE CORPORATION
OUTSIDE BROKER: Any broker other than Broker.
LISTING PERIOD: Commencing on April 1, 1997 and ending ninety (90) days
after the date Owner closes escrow on the purchase of
the subject property or upon thirty (30) days written
notice by Owner, Owner's Agent or Broker, whichever is
sooner.
LEASE TERMS: Lease Rate as acceptable to Owner and Tenant.
PROPERTIES: 000 Xxxxxxxx
Xxxxxx, Xxxxxxxxxx
COMMISSION SCHEDULE: Owner's Agent shall pay Broker a commission per the
Schedule below in the event a lease is fully executed
during the listing period, whether by or through
Owner's Agent, Broker, Owner, or any party prior to the
expiration of this Listing or any extension hereof. The
amount of the lease commission shall be calculated as a
percent of the base rental and stated rental increases
per year for the first ten (10) years of the initial
lease term expressed as percentages during years 1-5 &
years 6-10 as follows. Lease commissions are calculated
based on the total base rental, including fixed
increases, but excluding variable inflation adjustment
clauses, parking fees, amounts paid under any
percentage rent clause, amounts paid pursuant to
escalation clauses for taxes and operating costs, or
amounts paid to amortize the cost of any allowances
funded for the benefit of the tenant (e.g., tenant
improvements and/or moving allowances).
-For a new tenant
Years 1-5: Five percent (5%)
Years 6-10: Two percent (2%).
-If an existing tenant renews, relocates or expands
within this Office Building.
Years 1-5: Three percent (3%)
Years 6-10: Two Percent (2%).
The lease commission shall be due, once Owner closes
escrow, and payable one-half upon mutual non-contingent
lease execution and one-half upon occupancy by the
tenant or is mutually agreed upon between Owner's Agent
and Broker Notwithstanding the foregoing Owner's Agent
will pay commissions only if Owner closes escrow on the
Property.
TENANT: Owner's Agent further agrees to pay Broker a commission
in accordance with the Authorization, if, within sixty
(60) calendar days after the expiration or termination
of the Listing Period the property is leased to any
person or entity (excluding successors, assigns or
affiliates of Owner) with whom Owner's Agent or Broker
has negotiated (either directly or through another
broker or agent) or to whom the property has been
submitted prior to the expiration or termination of the
term. Broker agrees to submit a list of such persons or
entities to Owner not later than five (5) days
following the expiration or termination of the term,
provided however, that if a written offer has been
submitted, it shall not be necessary to include the
offeror's name on the list.
RELEASING: If any tenant fails to take possession of the leased
premises or having taken possession, ceases to pay rent and
vacates the same for any reason other than the default of
Owner or Owner's Agent within one (1) year after taking
possession had Broker still has an Exclusive Authorization
in force on the project, Owner's Agent and Broker will use
its best efforts for a period of one (1) one year after the
date the tenant should have take possession of the leased
premises or vacates the same (and ceases paying rent) to
obtain a replacement tenant. If a replacement tenant is
obtained and executes a lease, Broker shall be entitled to
lease commissions calculated on the basis of the total
rental for the full terms of the replacement lease in
accordance with the commission schedule above and the
Owner's Agent shall receive credit for any commission
actually paid to Broker (exclusive of amounts paid to
Outside Broker) for the original lease.
RESPONSIBILITIES: Broker agrees to diligently contact tenants for the leasing
to solicit their interest in the project. This will be
accomplished through the use of brochures, signage,,
telephone contact, personal canvassing and any other
reasonable means. The cost of these items will be assumed by
Broker.
Broker shall be present at all property showings whenever
possible. Broker shall distribute to the local brokerage
community information on all available spaces at least once
every month. Broker shall submit writtens activity reports
to Owner's Agent at least once every two weeks. The reports
shall include a prospective tenant activity, break down of
traffic within the sub-market, a cold calling agenda. lease
and sale comparables, and available properties. Broker shall
submit with signed leases, copies of insurance certificates,
a lease application, financial statements personal balance
sheet (if personal guarantee is required). Tenant Fact Sheet
and check list. Broker will visit existing facilities of
prospective Tenant when the question of hazardous materials
arises.
DISCLOSURE: Broker shall not withhold from prospective tenants
information of which Broker has actual knowledge regarding
present and future acting and environmental matters
affecting the property and the condition of the property,
including but not limited to structural, mechanical and
???? conditions, the presence and location of asbestos, PCB
transformers, other toxic, hazardous or contaminated
substances and underground storage tanks in, on, or about
the property. Broker is authorized to disclose any such
information to prospective tenants.
AGENCY: Broker agrees that it shall not represent the interest of
any third party prospective tenant in connection with any
transaction or potential transaction with Owner whereby
Broker additionally receives any commission, fee, payment or
other compensation from any tenant, provided, however.
Broker may do any of the foregoing if Owner Agent (1)
requests Owner's consent to such representation in writing
(ii) discloses the existence of the conflict of interest
raised thereby and the amount of compensation that would be
payable to Broker in connection with such representation,
and (iii) Owner's Agent consents thereto (which consent may
be granted or withheld in Owner's Agent sole and absolute
discretion).
CONTINGENCY: This Authorization is contingent upon Owner's successful
close of escrow on the purchase of the subject property.
GENERAL COMMENTS: The prevaling party may recover from the other party his
costs and attorney's fees incurred in any action brought
by either party to enforce any terms of this Agreement.
Owner's Agent agrees to save and hold Broker harmless from
all claims, disputes, litigation, and/or judgments arising
from any incorrect information applied by Owner's Agency or
from any material fact concerning the property which Owner's
Agent fails to disclose, or from any action taken by Owner's
Agent or Broker pursuant to Owner's Agent instructions,
concerning the subject property.
If Owner's Agent fails to make any payment at the time
required herein, the delinquent sum(s) shall bear interest
at the maximum rate permitted by law.
It is understood that it is illegal for Owner,
Owner's Agent or Broker to refuse to present,
lease, or sell to any person because of race,
color, religion, national origin, sex, marital
status, or physical disability.
This listing supersedes all previous listing
agreements for the subject property.
Owner's Agent and Broker hereby acknowledge
receipt of a copy of this Exclusive Authorization.
Accepted this _____ day of _____ 19 __ Approved this 18th day of April 1997
---- ----- --
OWNER'S AGENT: BROKER:
XXXXXXX WEST INVESTMENT CORPORATION, ITC REAL ESTATE GROUP,
A DELAWARE CORPORATION
BY:_____________________________ BY: /s/ X . X . XXXXXX
Xxxx X Xxxxxxx, President ------------------
ADDRESS: ADDRESS:
0000 Xxxxxx xxx Xxx Xxxxx, Xxxxx 000 111 Pacifica, Suite 100
San Diego, CA 92108 Xxxxxx, XX 00000
(000)000-0000 (000)000-0000
(000)000-0000(1) (000)000-0000(1)
XXXXXXX WEST INVESTMENT CORPORATION
EXCLUSIVE AUTHORIZATION & RIGHT TO LEASE
--------------------------------------------------------------------------------
BROKER: ITC REAL ESTATE GROUP
OWNER: XXXXXXX WEST INVESTMENT CORPORATION,
A DELAWARE CORPORATION, OR ASSIGNEE
OWNER'S AGENT: XXXXXXX WEST INVESTMENT CORPORATION,
A DELAWARE CORPORATION
OUTSIDE BROKER: Any broker other than Broker.
LISTING PERIOD: Commencing on April 1, 1997 and ending ninety (90)
days after the date Owner closes escrow on the
purchase of the subject property or upon thirty (30)
days written notice by Owner, Owner's Agent or Broker,
whichever is sooner.
LEASE TERMS: Lease Rate as acceptable to Owner and Tenant.
PROPERTIES: 000-000 Xxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxx
COMMISSION SCHEDULE: Owner's Agent shall pay Broker a commission per the
Schedule below in the event a lease is fully executed
during the listing period, whether by or through
Owner's Agent, Broker, Owner, or any party prior to
the expiration of this Listing or any extension
hereof. The amount of the lease commission shall be
calculated as a percent of the base rental and stated
rental increases per year for the first ten (10) years
of the initial lease term expressed as percentages
during years 1-5 & years 6-10 as follows. Lease
commissions are calculated based on the total base
rental, including fixed increases, but excluding
variable inflation adjustment clauses, parking fees,
amounts paid under any percentage rent clause, amounts
paid pursuant to escalation clauses for taxes and
operating costs, or amounts paid to amortize the cost
of any allowances funded for the benefit of the tenant
(e.g. tenant improvements and/or moving allowances).
-If Outside Broker procures a new tenant".
Years 1-5: Seven percent (7%)
Broker pays Outside Broker five percent (5%)
Broker retains two percent (2%)
Years 6-10: Two percent (2%)
Broker pays Outside Broker one percent (1%)
Broker retains one percent (1%)
* The total commission for a lease at the 220
Technology building, however, shall be:
Years 1-5: Five percent (5%)
Broker pays Outside Broker three percent (3%)
Broker retains two percent (2%)
Years 6-10: Two and a half percent (2.5%)
Broker pays Outside Broker one and a half percent
(1.5%)
Broker retains one percent (1%)
except that this reduction shall not apply for any
lease with Midas International Corp. or Sentinal
Monitoring Corp., H & H Glass, and Zee Medical.
-If Broker procures a new tenant,
Years 1-5: Five percent (5%)
Years 6-10: Two percent (2%)
If an existing tenant renews, relocates or expands within
this Industrial Park.
Years 1-5: Three percent (3%)
Years 6-10: Two percent (2%)
Not withstanding anything above to the contrary, in no event
shall the commission to ITC on any transaction be less than
$250 per transaction, net of the amount it pays the outside
broker.
The lease commission shall be done, once Owner closes
escrow, and payable one-half upon mutual non-contingent
lease execution and one-half upon occupancy by the tenant or
as mutually agreed upon between Owner's Agent and Broker.
Notwithstanding the foregoing, Owner's Agent will pay
commission only if Owner closes escrow on the Property.
TENANT: Owner's Agent further agrees to pay Broker a commission in
accordance with the Authorization, if, within sixty (60)
calendar days after the expiration or termination of the
Listing Period the property is leased to any person or
entity (excluding successors, assigns or affiliate of Owner)
with whose Owner's Agent or Broker has negotiated (either
directly or through another broker or agent) or to whom the
property has been submitted prior to the expiration or
termination of the term. Broker agrees to submit a list of
such persons or entities to Owner not later than five(5)
days following the expiration or termination of the term,
provided however, that if a written offer has been
submitted, it shall not be necessary to include the
offeror's name on the list.
RE-LEASING: If any tenant fails to take possession of the leased
premises or having taken possession, ceases to pay rent and
vacates the same for any reason other than the default of
Owner or Owner's Agent within one (1) year after taking
possession and Broker still has an Exclusive Authorization
in force on the project, Owner's Agent and Broker will use
its best efforts for a period of one (1) year after the date
the tenant should have taken possession of the leased
premises or vacates the same (and ceases paying rent) to
obtain a replacement tenant. If a replacement tenant is
obtained and executes a lease, Broker shall be entitled to
lease commission calculated on the basis of the total rental
for the full term of the replacement lease in accordance
with the commission schedule above and the Owner's Agent
shall receive credit for any commission actually paid to
Broker (exclusive of amounts paid to Outside Broker) for the
original lease.
RESPONSIBILITIES: Broker agrees to diligently contact tenants for the leasing
to solicit their interest in the project. This will be
accomplished through the use of brochures, signage,
telephone contact, personal canvassing and any other
reasonable means. The cost of these items will be assumed by
Broker.
Broker shall to be present at all property showings
whenever possible. Broker shall distribute to the local
brokerage community information on all available spaces at
least once every month. Broker shall submit written activity
reports to Owner's Agent at least once every two weeks. The
reports shall include a prospective tenant activity, break
down of traffic within the sub-market, a cold calling
agenda, least and sale comparables, and available
properties. Broker shall submit with signed leases, copies
of insurance certificates, a lease application, financial
statement, personal balance sheet (if personal guarantee is
required). Tenant Fact Sheet and check list. Broker will
visit existing facilities of prospective Tenants when the
question of hazardous materials arises.
DISCLOSURE: Broker shall not withhold from prospective tenants
information of which Broker has actual knowledge regarding
present and future zoning and environmental matters
affecting the property and the condition of the property,
including, but not limited to structural, mechanical and
soils conditions, the presence and location of asbestos, PCB
transformers, other toxic, hazardous or contaminated
substances and underground storage tanks in, on or about the
property. Broker is authorized to disclose any such
information to prospective tenants.
AGENCY: Broker agrees that it shall not represent the interest of
any third party prospective tenant in connection with any
transaction or potential transaction with Owner
whereby Broker additionally receives any commission, for,
payment or other compensation from any tenant, provided,
however, Broker may do any of the foregoing if Broker (i)
requests Owner's Agent's consent to such representation in
writing, (ii) discloses the existence of the conflict of
Interest raised thereby and the amount of compensation
that would be payable to Broker in connection with such
representation, and (iii) Owner's Agent consents thereto
(which consent may be granted or withheld in Owner's sole
absolute discretion).
CONTINGENCY: This Authorization is contingent upon Owner's successful
close of escrow on the purchase of the subject property.
GENERAL COMMENTS: The prevailing party may recover from the other party his
costs and attorney's fees incurred in any action brought by
either party to enforce any terms of this Agreement.
Owner's Agent agrees to save and hold Broker harmless from
all claims, disputes, litigation, and/or judgments arising
from any incorrect information supplied by Owner's Agent or
from any material fact concerning the property which Owner's
Agent fails to disclose, or from any action taken by Owner's
Agent or Broker pursuant to Owner's Agent's instructions,
concerning the subject property.
If Owner's Agent fails to make any payment at the time
required herein, the delinquent sum(s) shall bear interest
at the maximum rate permitted by law.
It is understood that it is illegal for Owner, Owner's Agent
or Broker to refuse to present, lease, or sell to any person
because of race, color, religion, national origin, sex,
marital status, or physical disability.
This listing supersedes all previous listing agreements for
the subject property.
Owner's Agent and Broker hereby acknowledges receipt of a
copy of this Exclusive Authorization and further agrees that
it shall be binding upon the heirs, successors and assigns
of the undersigned.
Accepted this ___ day of ____ 199__ Approved this 18th day of April 1997
---- ----- --
OWNER'S AGENT: BROKER:
XXXXXXX WEST INVESTMENT CORPORATION, ITC REAL ESTATE GROUP,
A DELAWARE CORPORATION
BY:______________________________ BY:/s/ X.X. Xxxxxx
Xxxx X. Xxxxxxx, President ------------------
ADDRESS: ADDRESS:
0000 Xxxxxx xxx Xxx Xxxxx, Xxxxx 000 111 Pacifics,Suite 100
Xxx Xxxxx, XX 00000 Xxxxxx, XX 00000
(000) 000-0000 (000) 000-0000
(000) 000-0000(1) (000) 000-0000(1)
