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EXHIBIT 10.3
INDUSTRIAL PORTFOLIO
AGREEMENT OF PURCHASE AND SALE
(WEST SACRAMENTO INDUSTRIAL CENTER)
This Agreement of Purchase and Sale ("Agreement"), dated as of December
11, 1998, is between SPT Real Estate Corp. D, a Delaware corporation ("Seller"),
and Pacific Gulf Properties Inc., a Maryland corporation ("Buyer").
ARTICLE I
PURCHASE AND SALE OF PROPERTY
SECTION 1.1 SALE.
Seller agrees to sell to Buyer, and Buyer agrees to purchase from
Seller, subject to the terms, covenants and conditions set forth herein, (i)
that certain industrial real property, together with any and all rights,
privileges and easements appurtenant thereto owned by Seller, (ii) all
improvements, buildings systems and fixtures located therein or thereon owned by
Seller, which real property is more particularly described in EXHIBIT A attached
hereto and made a part hereof (collectively the "Real Property"), together with
Seller's interest in all tenant leases and any other occupancy agreements
(hereinafter collectively referred to as the "leases") affecting the right to
occupy any portion of the Real Property, Seller's interest in any intangible
personal property now or hereafter used in connection with the operation,
Seller's interest in maintenance, management, or occupancy of the Real Property,
including, without limitation, Seller's interest in any trade names and
trademarks associated with the Real Property (provided Seller makes absolutely
no representation that it has any rights whatsoever with respect to trade names
or trademarks), and (iii) any personal property owned by Seller, if any, located
on the Real Property and used exclusively in the operation or maintenance of the
Real Property, as the same may be further described in any list which is in
Seller's possession and furnished to Buyer prior to the Closing (the "Personal
Property"). The Real Property and Personal Property are collectively referred to
herein as the "Property".
SECTION 1.2 PURCHASE PRICE.
(a) The purchase price of the Property is Six Million Four
Hundred Thousand Dollars ($6,400,000)(the "Purchase Price").
(b) The Purchase Price shall be paid as follows:
(1) Upon the execution of this Agreement by Buyer and
Seller, Buyer's cash on deposit in escrow with Chicago Title Company (the "Title
Company") shall be allocated in the amount of Fifty Thousand Dollars ($50,000)
(the "Deposit") to this Agreement.
(2) THE DEPOSIT SHALL BE HELD IN AN INTEREST BEARING ACCOUNT
AND ALL INTEREST THEREON SHALL IN ALL EVENTS BELONG SOLELY TO BUYER. IF THE SALE
OF THE PROPERTY AS CONTEMPLATED HEREUNDER IS CONSUMMATED, THEN THE DEPOSIT SHALL
BE PAID TO SELLER AT THE CLOSING AND CREDITED AGAINST THE PURCHASE PRICE. IF THE
SALE OF THE
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PROPERTY IS NOT CONSUMMATED DUE TO SELLER'S DEFAULT HEREUNDER, THEN, AS BUYER'S
SOLE REMEDIES, BUYER MAY EITHER: (1) TERMINATE THIS AGREEMENT AND RECEIVE A
REFUND OF THE DEPOSIT, IN WHICH EVENT NEITHER PARTY SHALL HAVE ANY FURTHER
RIGHTS OR OBLIGATIONS HEREUNDER EXCEPT AS PROVIDED IN SECTIONS 6.1, 9.3 AND 9.9
BELOW, OR (2) BUYER MAY ENFORCE SPECIFIC PERFORMANCE OF THIS AGREEMENT. IF THE
SALE IS NOT CONSUMMATED DUE TO ANY DEFAULT BY BUYER HEREUNDER, THEN SELLER AS
ITS SOLE AND EXCLUSIVE REMEDY SHALL RETAIN THE DEPOSIT AS LIQUIDATED DAMAGES.
THE PARTIES HAVE AGREED THAT SELLER'S ACTUAL DAMAGES, IN THE EVENT OF A FAILURE
TO CONSUMMATE THIS SALE DUE TO BUYER'S DEFAULT, WOULD BE EXTREMELY DIFFICULT OR
IMPRACTICABLE TO DETERMINE. AFTER NEGOTIATION, THE PARTIES HAVE AGREED THAT,
CONSIDERING ALL THE CIRCUMSTANCES EXISTING ON THE DATE OF THIS AGREEMENT, THE
AMOUNT OF THE DEPOSIT IS A REASONABLE ESTIMATE OF THE DAMAGES THAT SELLER WOULD
INCUR IN SUCH EVENT. BY PLACING THEIR INITIALS BELOW, EACH PARTY SPECIFICALLY
CONFIRMS THE ACCURACY OF THE STATEMENTS MADE ABOVE AND THE FACT THAT EACH PARTY
WAS REPRESENTED BY COUNSEL WHO EXPLAINED, AT THE TIME THIS AGREEMENT WAS MADE,
THE CONSEQUENCES OF THIS LIQUIDATED DAMAGES PROVISION. IF THE SALE OF THE
PROPERTY IS NOT CONSUMMATED DUE TO ANY REASON OTHER THAN BUYER OR SELLER'S
DEFAULT HEREUNDER, THEN, THE DEPOSIT SHALL BE RETURNED TO BUYER AND NEITHER
PARTY SHALL HAVE ANY FURTHER RIGHTS OR OBLIGATIONS HEREUNDER EXCEPT AS PROVIDED
IN SECTIONS 6.1, 9.3 AND 9.9 BELOW. THE FOREGOING IS NOT INTENDED TO LIMIT
BUYER'S OBLIGATIONS UNDER SECTIONS 6.1, 9.3 AND 9.9.
INITIALS: SELLER ________ BUYER _______
(3) The balance of the Purchase Price, which is Six Million
Three Hundred Fifty Thousand Dollars ($6,350,000), shall be paid to Seller all
in cash at the consummation of the purchase and sale contemplated hereunder (the
"Closing").
ARTICLE II
CONDITIONS
SECTION 2.1 CONDITION PRECEDENT.
Buyer's obligation to purchase the Property is conditioned upon the
following:
(a) Buyer's review and approval of updated preliminary title
report, together with copies of the underlying documents, and any survey of the
Property in Seller's possession. These items have been furnished to Buyer prior
to the execution of this Agreement.
(b) Buyer's review and approval of all leases affecting the
Property and any rent roll in Seller's possession provided that, notwithstanding
any other provision of this Agreement, Seller makes no representation as to, and
Buyer agrees that it shall not rely on, the accuracy of any information
contained in such rent roll. Seller has furnished to Buyer copies of the leases
and any rent roll.
(c) Buyer's review and approval of the physical condition of the
Property.
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(d) Buyer's review and approval of all zoning, land use,
building, environmental and other statutes, rules, or regulations applicable to
the Property.
(e) Buyer's review and approval of operating statements with
respect to the Property for 1996, 1997 and for the first eight (8) months of
1998, bills for the most recent real property taxes and assessments for the
Property, certificates of occupancy, plans and specifications, soils,
environmental and other reports, service contracts, guaranties, warranties and
other contracts or documents which will be binding on Buyer, or benefit the
Property, after the Closing. Seller has made available to Buyer copies of all
such items in Seller's possession for Buyer's inspection and copying, at Buyer's
expense, during reasonable business hours. Notwithstanding the foregoing,
Buyer's review shall not include a review of Seller's internal economic
memoranda or reports, attorney-client privileged materials or Seller's
appraisals of the Property, if any.
(f) Buyer's review and approval of any other matters Buyer deems
relevant to the Property.
(g) Approval by Buyer's Board of Directors of the transactions
contemplated by this Agreement by November 20, 1998. If Buyer does not notify
Seller that Buyer's Board of Directors has disapproved the transactions
contemplated by this Agreement on or before said date, this condition shall be
deemed satisfied.
SECTION 2.2 CONTINGENCY PERIOD.
Buyer shall have until 5:00 p.m., California time, on December 17, 1998
(such period being referred to herein as the "Contingency Period") to review and
approve the matters described in Sections 2.1(a)-(f) above in Buyer's sole
discretion. If Buyer determines to proceed with the purchase of the Property,
then Buyer shall, before the end of the Contingency Period, notify Seller in
writing that Buyer has approved all of the matters described in Section
2.1(a)-(f) above, including, without limitation, all documents, agreements,
surveys, reports and other items and materials delivered to or made available to
Buyer in connection with this Agreement (the "Due Diligence Materials"). If
before the end of the Contingency Period Buyer fails to give Seller such written
notice, then Buyer shall be deemed to have elected to terminate this Agreement,
the Deposit shall be returned to Buyer, and neither party shall have any further
rights or obligations hereunder except as provided in Sections 6.1, 9.3 and 9.9
below. Notwithstanding the foregoing, Buyer acknowledges and agrees that it has
reviewed and unconditionally approved of all matters described in Sections
2.1(b)-(g) above, including, without limitation, the Due Diligence Materials
referenced therein. Consequently, Buyer shall have until the end of the
Contingency Period to review and approve the title and survey matters described
in Subsection 2.1(a) above.
SECTION 2.3 CONSIDERATION.
Notwithstanding anything in this Agreement to the contrary, to induce
Buyer to enter into this Agreement and to expend the time and resources
necessary to evaluate the Property and possibly forego other opportunities while
doing so, Seller hereby grants to Buyer the rights to terminate this Agreement
as provided herein. Such expenditures of time and resources and
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possible loss of opportunity by Buyer constitute adequate consideration for
Seller's remaining bound by this Agreement notwithstanding such termination
rights in Buyer.
SECTION 2.4 [INTENTIONALLY DELETED].
ARTICLE III
BUYER'S EXAMINATION
SECTION 3.1 REPRESENTATIONS AND WARRANTIES OF SELLER.
Subject to the provisions of Sections 3.2 and 3.3 below, Seller hereby
makes the following representations and warranties with respect to the Property,
provided that Seller makes no representations or warranties with respect to the
matters (the "Disclosure Items") which are set forth in SCHEDULE 1 attached
hereto and made a part hereof. Notwithstanding anything to the contrary
contained herein or in any document delivered in connection herewith, Seller
shall have no liability with respect to the Disclosure Items.
(a) Seller has not (i) made a general assignment for the benefit
of creditors, (ii) filed any voluntary petition in bankruptcy or suffered the
filing of any involuntary petition by Seller's creditors, (iii) suffered the
appointment of a receiver to take possession of all, or substantially all, of
Seller's assets, (iv) suffered the attachment or other judicial seizure of all,
or substantially all, of Seller's assets, (v) admitted in writing its inability
to pay its debts as they come due, or (vi) made an offer of settlement,
extension or composition to its creditors generally.
(b) Seller is not a "foreign person" as defined in Section 1445
of the Internal Revenue Code of 1986, as amended (the "Code") and any related
regulations.
(c) This Agreement and all documents executed by Seller which
are to be delivered at the Closing (i) have been or will be duly authorized,
executed and delivered by Seller, and (ii) do not or will not violate any
provision of any agreement or judicial order to which Seller is a party or to
which Seller or the Property is subject.
(d) Seller has the power and authority to enter into this
Agreement and to perform its obligations hereunder.
(e) Copies of the leases and contracts delivered or made
available to Buyer by Seller are true and accurate copies of such items.
(f) The only tenant leases and amendments thereto in force for
the Property as of the date hereof are set forth in a list which is attached
hereto as EXHIBIT B and made a part hereof.
(g) To the best of Seller's knowledge, there is no litigation
pending with respect to the Property.
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(h) To the best of Seller's knowledge, Seller has received no
written notice that the Property or its current use and operation are in
material violation of any applicable law.
(i) To the best of Seller's knowledge, the documents which will
be delivered by Seller to Buyer or made available by Seller to Buyer for Buyer's
inspection and copying are true and complete copies of all documents in Seller's
possession related to the Property except for Seller's internal economic
memoranda and reports, attorney-client privileged materials and Seller's
appraisals of the Property, if any.
(j) To the best of Seller's knowledge, Seller has received no
written notice of any (i) condemnation, environmental, zoning or other land-use
proceedings, instituted or threatened, against the Property, or (ii) special
assessment proceedings affecting the Property (other than as set forth in the
preliminary title report).
(k) To the best of Seller's knowledge, Seller has received no
written notice of any material litigation or arbitration, instituted or intended
to be instituted, against the Property or against Seller as owner of the
Property except as set forth on SCHEDULE 1.
(l) To the best of Seller's knowledge, Seller has received no
written notice that any tenant of the Property has either filed or been the
subject of any filing of a petition under any federal or state bankruptcy or
insolvency laws except as set forth on SCHEDULE 1.
(m) Seller has received no written notice of any defaults by
Seller under any of the leases except as set forth on SCHEDULE 1. Except as set
forth on SCHEDULE 1, Seller has given no written notice to any tenants of the
Property of any defaults under its lease which has not been cured.
(n) Seller has received no written notice of any defaults by
Seller which have not been cured under the service contracts, guaranties, or
warranties which will be binding on Buyer, after the Closing.
(o) Seller is duly formed, validly existing and in good standing
under the laws of the State of Delaware and is qualified to do business as a
foreign corporation in California.
(p) SCHEDULE 2 attached hereto is a complete and accurate list
of all employee benefit or other plans described in Section 3.5(e) below which
are investors in Seller.
Each of the representations and warranties of Seller contained in this
Section 3.1: (1) is true as of the date of this Agreement; (2) except for the
representations and warranties contained in Sections 3.1 (l) and (m), shall be
deemed remade by Seller, and shall be true in all material respects as of the
date of Closing, subject in either case to (A) any Exception Matters (as defined
below), (B) the Disclosure Items, and (C) other matters expressly permitted in
this Agreement or otherwise approved in writing by Buyer including, without
limitation, the Due Diligence Materials; and (3) shall survive the close of
escrow as provided in Section 3.3 below. In connection with the representations
and warranties contained in Sections 3.1 (l) and (m), Seller shall deliver to
Buyer: (x) three (3) days prior to the expiration of the Contingency Period, an
updated SCHEDULE 1, as necessary, effective as of such date, for matters
relating to the representation and warranty in Section 3.1(l), and (y) three (3)
days prior to the expiration of the
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Contingency Period, an updated aged receivable report, effective as of the date
that is seven (7) days prior to the expiration of the Contingency Period, for
matters relating to the representation and warranty in Section 3.1(m).
SECTION 3.2 NO LIABILITY FOR EXCEPTION MATTERS.
As used herein, the term "Exception Matter" shall refer to a matter
disclosed to Buyer in writing or discovered by Buyer before the Closing, that
would make a representation or warranty of Seller contained in this Agreement
untrue or incorrect, including, without limitation, matters disclosed in writing
to Buyer by Seller or by any other person. If Buyer obtains knowledge of any
Exception Matter after the date hereof, Buyer may terminate this Agreement and
receive a return of the Deposit upon written notice to Seller within five (5)
business days after Buyer learns of such Exception Matter. (For purposes of this
Agreement, "business day" shall mean any day other than a Saturday or Sunday, a
California State holiday, a national holiday or other day on which commercial
bankers in California are generally not open for business.) Buyer shall promptly
notify Seller in writing of any Exception Matter of which Buyer obtains
knowledge before the Closing. If Buyer obtains knowledge of any Exception Matter
before the Closing, but nonetheless elects to proceed with the acquisition of
the Property, Buyer shall consummate the acquisition of the Property subject to
such Exception Matter and Seller shall have no liability with respect to such
Exception Matter, notwithstanding any contrary provision, covenant,
representation or warranty contained in this Agreement. If Buyer elects to
terminate this Agreement on the basis of any Exception Matter, Buyer shall so
notify Seller in writing within five (5) business days following Buyer's
discovery of the Exception Matter, and the Deposit shall be returned to Buyer.
Buyer's failure to give such notice within such 5 business-day period shall be
deemed a waiver by Buyer of such Exception Matter. Upon a termination of this
Agreement pursuant to this Section 3.2, neither party shall have any further
rights or obligations hereunder, except as provided in Sections 6.1, 9.3 and 9.9
below. If Buyer first obtains knowledge of an Exception Matter within five (5)
business days of the Closing Date, the Closing shall be automatically extended
for the number of business days necessary to give Buyer five (5) business days
to respond to such Exception Matter. Seller shall have no obligation to cure or
remedy any Exception Matter, and, subject to Buyer's right to terminate this
Agreement as set forth above, Seller shall have no liability whatsoever to Buyer
with respect to any Exception Matters.
SECTION 3.3 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
The representations and warranties of Seller and Buyer contained herein
shall survive for a period of twelve (12) months after the Closing, except that
Buyer's representations and warranties in Sections 3.5(d) and 3.5(e), Seller's
representations and warranties in Sections 3.1(p) and Seller's and Buyer's
representations and warranties in Section 6.1 shall survive indefinitely. Any
claim which Buyer or Seller may have at any time against the other for a breach
of any such representation or warranty (other than those contained in Sections
3.1(p), 3.5(d), 3.5(e) and 6.1), whether known or unknown, which is not asserted
by written notice to Seller or Buyer within such twelve (12) month period shall
not be valid or effective, and the party shall have no liability with respect
thereto.
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SECTION 3.4 SELLER'S KNOWLEDGE.
For purposes of this Agreement and any document delivered at Closing,
whenever the phrase "to the best of Seller's knowledge" or the "knowledge" of
Seller or words of similar import are used, they shall be deemed to refer to the
current actual knowledge of Xxxx Xxxxxxx (the person at Seller who is in charge
of disposition of the Property) and Xxxxx Xxxxxx, Vice President and Director of
Properties, at the times indicated only and not any implied, imputed or
constructive knowledge, without any independent investigation having been made
or any implied duty to investigate.
SECTION 3.5 REPRESENTATIONS AND WARRANTIES OF BUYER.
Buyer represents and warrants to Seller as follows:
(a) Buyer represents and warrants to Seller that this Agreement
and all documents executed by Buyer which are to be delivered to Seller at
Closing do not and at the time of Closing will not violate any provision of any
agreement or judicial order to which Buyer is a party or to which Buyer is
subject.
(b) Buyer represents and warrants to Seller that Buyer has not
(i) made a general assignment for the benefit of creditors, (ii) filed any
voluntary petition in bankruptcy or suffered the filing of any involuntary
petition by Buyer's creditors, (iii) suffered the appointment of a receiver to
take possession of all, or substantially all, of Buyer's assets, (iv) suffered
the attachment or other judicial seizure of all, or substantially all, of
Buyer's assets, (v) admitted in writing its inability to pay its debts as they
come due, or (vi) made an offer of settlement, extension or composition to its
creditors generally.
(c) Buyer is duly formed, validly existing and in good standing
under the laws of the State of Maryland. Buyer has duly authorized, executed and
delivered this Agreement.
(d) Buyer is purchasing the Property as investment rental
property, and not for Buyer's own operations or use.
(e) Buyer is not a party in interest with respect to any
employee benefit or other plan within the meaning of Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or of
Section 4975(e)(1) of the Internal Revenue Code of 1986, as amended (the
"Code"), which is subject to ERISA or Section 4975 of the Code and which is
listed on SCHEDULE 2 attached hereto.
Each of the representations and warranties of Buyer contained in this Section
shall be deemed remade by Buyer as of the Closing and shall survive the Closing
as provided in Section 3.3 above.
SECTION 3.6 BUYER'S INDEPENDENT INVESTIGATION.
(a) Buyer acknowledges and agrees that it has been given or will
be given before the end of the Contingency Period, a full opportunity to inspect
and investigate each and
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every aspect of the Property, either independently or through agents of Buyer's
choosing, including, without limitation:
(1) All matters relating to title, together with all
governmental and other legal requirements such as taxes, assessments, zoning,
use permit requirements and building codes.
(2) The physical condition and aspects of the Property,
including, without limitation, the interior, the exterior, the square footage
within the improvements on the Real Property and within each tenant space
therein, the structure, seismic aspects of the Property, the paving, the
utilities, and all other physical and functional aspects of the Property. Such
examination of the physical condition of the Property shall include an
examination for the presence or absence of Hazardous Materials, as defined
below, which shall be performed or arranged by Buyer at Buyer's sole expense.
For purposes of this Agreement, "Hazardous Materials" shall mean inflammable
explosives, radioactive materials, asbestos, polychlorinated biphenyls, lead,
lead-based paint, under and/or above ground tanks, hazardous materials,
hazardous wastes, hazardous substances, oil, or related materials, which are
listed or regulated in the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended (42 U.S.C. Sections 6901, et seq.), the
Resources Conservation and Recovery Act of 1976 (42 U.S.C. Section 6901, et
seq.), the Clean Water Act (33 U.S.C. Section 1251, et seq.), the Safe Drinking
Water Act (14 U.S.C. Section 1401, et seq.), the Hazardous Materials
Transportation Act (49 U.S.C. Section 1801, et seq.), the and Toxic Substance
Control Act (15 U.S.C. Section 2601, et seq.), the California Hazardous Waste
Control Law (California Health and Safety Code Section 25100, et seq.), the
Xxxxxx-Cologne Water Quality Control Act (California Water Code Section 13000,
et seq.), and the Safe Drinking Water and Toxic Enforcement Act of 1986
(California Health and Safety Code Section 25249.5, et seq.); and any other
applicable federal, state or local laws and regulations.
(3) Any easements and/or access rights affecting the
Property.
(4) The leases and all matters in connection therewith,
including, without limitation, the ability of the tenants to pay the rent and
the economic viability of the tenants.
(5) The service contracts and any other documents or
agreements of significance affecting the Property.
(6) All other matters of material significance affecting the
Property.
(b) BUYER SPECIFICALLY ACKNOWLEDGES AND AGREES THAT SELLER IS
SELLING AND BUYER IS PURCHASING THE PROPERTY ON AN "AS IS WITH ALL FAULTS" BASIS
AND THAT BUYER IS NOT RELYING ON ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND
WHATSOEVER, EXPRESS OR IMPLIED, FROM SELLER, ITS AGENTS, OR BROKERS AS TO ANY
MATTERS CONCERNING THE PROPERTY EXCEPT AS EXPRESSLY SET FORTH IN SECTION 3.1
ABOVE, INCLUDING WITHOUT LIMITATION: (i) the quality, nature, adequacy and
physical condition and aspects of the Property, including, but not limited to,
the structural elements, seismic aspects of the Property, foundation, roof,
appurtenances, access, landscaping,
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parking facilities and the electrical, mechanical, HVAC, plumbing, sewage, and
utility systems, facilities and appliances, the square footage within the
improvements on the Real Property and within each tenant space therein, (ii) the
quality, nature, adequacy, and physical condition of soils, geology and any
groundwater, (iii) the existence, quality, nature, adequacy and physical
condition of utilities serving the Property, (iv) the development potential of
the Property, and the Property's use, habitability, merchantability, or fitness,
suitability, value or adequacy of the Property for any particular purpose, (v)
the zoning or other legal status of the Property or any other public or private
restrictions on use of the Property, (vi) the compliance of the Property or its
operation with any applicable codes, laws, regulations, statutes, ordinances,
covenants, conditions and restrictions of any governmental or quasi-governmental
entity or of any other person or entity, (vii) the presence of Hazardous
Materials on, under or about the Property or the adjoining or neighboring
property, (viii) the quality of any labor and materials used in any improvements
on the Real Property, (ix) the condition of title to the Property, (x) the
leases, service contracts, or other agreements affecting the Property and (xi)
the economics of the operation of the Property.
SECTION 3.7 RELEASE.
(a) Without limiting the above, and subject to the
representations and warranties of Seller contained in Section 3.1 hereof, Buyer
on behalf of itself and its successors and assigns waives its right to recover
from, and forever releases and discharges, Seller, Seller's affiliates, Seller's
investment manager, the partners, trustees, beneficiaries, shareholders,
members, directors, officers, employees and agents of each of them, and their
respective heirs, successors, personal representatives and assigns
(collectively, the "Seller Related Parties"), from any and all demands, claims,
legal or administrative proceedings, losses, liabilities, damages, penalties,
fines, liens, judgments, costs or expenses whatsoever (including, without
limitation, attorneys' fees and costs), whether direct or indirect, known or
unknown, foreseen or unforeseen, that may arise on account of or in any way be
connected with (i) the physical condition of the Property including, without
limitation, all structural and seismic elements, all mechanical, electrical,
plumbing, sewage, heating, ventilating, air conditioning and other systems, the
environmental condition of the Property and Hazardous Materials on, under or
about the Property, or (ii) any law or regulation applicable to the Property,
including, without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended (42 U.S.C. Sections 6901, et
seq.), the Resources Conservation and Recovery Act of 1976 (42 U.S.C. Section
6901, et seq.), the Clean Water Act (33 U.S.C. Section 1251, et seq.), the Safe
Drinking Water Act (14 U.S.C. Section 1401, et seq.), the Hazardous Materials
Transportation Act (49 U.S.C. Section 1801, et seq.), the and Toxic Substance
Control Act (15 U.S.C. Section 2601, et seq.), the California Hazardous Waste
Control Law (California Health and Safety Code Section 25100, et seq.), the
Xxxxxx-Cologne Water Quality Control Act (California Water Code Section 13000,
et seq.), and the Safe Drinking Water and Toxic Enforcement Act of 1986
(California Health and Safety Code Section 25249.5, et seq.), and any other
applicable federal, state or local laws and regulations.
(b) In connection with section 3.7(a) above, Buyer expressly
waives the benefits of Section 1542 of the California Civil Code, 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 OF EXECUTING
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THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT
WITH THE DEBTOR."
SECTION 3.8 SURVIVAL.
The provisions of this Article III shall survive the Closing subject to
the limitations and qualifications contained in such provisions.
ARTICLE IV
TITLE
SECTION 4.9 CONDITIONS OF TITLE.
At the Closing, Seller shall convey its title to the Property to Buyer
by grant deed in the form attached hereto as EXHIBIT C (the "Deed") subject to
no exceptions other than:
(a) Interests of tenants in possession;
(b) Non-delinquent liens for real estate taxes and assessments;
and (C) Any exceptions disclosed by the preliminary title report and any
amendments or supplements thereto, the public records or the Due Diligence
Materials, and any other exceptions to title which would be disclosed by an
inspection and/or survey of the Property except for trust deeds, mortgages and
other monetary liens granted or caused by Seller other than non-delinquent liens
for real estate taxes and assessments. Buyer may at its option approve or
disapprove exceptions which are first disclosed to Buyer after the date which is
five (5) days prior to the end of the Contingency Date within five (5) days of
the date of such disclosure to Buyer. If Buyer disapproves of such new
exceptions, Buyer may, as Buyer's sole rights and remedies, either: (i)
terminate this Agreement in which event the Deposit shall be returned to Buyer,
and neither party under this Agreement shall have any rights or obligation
except as provided in Sections 6.1, 9.3 and 9.9 below, or (ii) waive its
disapproval and take title to the Property subject to such new exceptions.
All of the foregoing exceptions shall be referred to collectively as the
"Conditions of Title." By acceptance of the Deed and the Closing of the purchase
and sale of the Property, (i) Buyer agrees it is assuming for the benefit of
Seller all of the obligations of Seller with respect to the Conditions of Title
but only to the extent such obligations arise from and after the Closing, and
(ii) Buyer agrees that Seller shall have conclusively satisfied its obligations
with respect to title to the Property. The provisions of this Section shall
survive the Closing.
SECTION 4.2 EVIDENCE OF TITLE.
Delivery of title in accordance with the foregoing shall be evidenced by
the willingness of the Title Company to issue, at Closing, its Owner's ALTA
Policy of Title Insurance (Form B, rev. 10/17/70) in the amount of the Purchase
Price showing title to the Real Property vested in Buyer, subject to the
Conditions of Title and with the following CLTA endorsements: 100 (modified for
an owner), 101.4, 103.7, 116, 116.1, 116.4 and 116.7 (the "Title Policy"), or
the
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equivalent, but only to the extent that Buyer shall confirm in writing with the
Title Company prior to the end of the Contingency Period that the Title Company
will issue the aforesaid form of title insurance and endorsements at Closing and
Buyer shall, prior to the end of the Contingency Period, provide Seller with a
copy of such confirmation. Seller is under no obligation to provide any
indemnity or other agreement or undertaking to the Title Company in order for
Title Company to issue the foregoing endorsements. Buyer shall have prepared, at
Buyer's cost, the ALTA survey of the Property necessary to support the issuance
of the Title Policy.
ARTICLE V
RISK OF LOSS AND INSURANCE PROCEEDS
SECTION 5.1 MINOR LOSS.
Buyer shall be bound to purchase, and Seller shall be bound to sell, the
Property for the full Purchase Price as required by the terms hereof, without
regard to the occurrence or effect of any damage to the Property or destruction
of any improvements thereon or condemnation of any portion of the Property,
provided that: (a) the cost to repair any such damage or destruction, or the
diminution in the value of the remaining Property as a result of a partial
condemnation, does not exceed Five Hundred Thousand Dollars ($500,000) and (b)
upon the Closing, there shall be a credit against the Purchase Price due
hereunder equal to the amount of any insurance proceeds or condemnation awards
collected by Seller as a result of any such damage or destruction or
condemnation, plus the amount of any insurance deductible, less any sums
expended by Seller toward the restoration or repair of the Property. If the
proceeds or awards have not been collected as of the Closing, then such proceeds
or awards shall be assigned to Buyer, except to the extent needed to reimburse
Seller for sums expended to repair or restore the Property, and Seller shall
retain the rights to such proceeds and awards.
SECTION 5.2 MAJOR LOSS.
If the amount of the damage or destruction or condemnation as specified
above exceeds Five Hundred Thousand Dollars ($500,000), then Buyer may, at its
option to be exercised within five (5) business days of Buyer's receipt of
Seller's notice of the occurrence of the damage or destruction or the
commencement of condemnation proceedings, either terminate this Agreement or
consummate the purchase for the full Purchase Price as required by the terms
hereof. If Buyer elects to terminate this Agreement or fails to give Seller
notice within such 5 business-day period that Buyer will proceed with the
purchase, then the Deposit shall be returned to Buyer and neither party shall
have any further rights or obligations hereunder except as provided in Sections
6.1, 9.3 and 9.9 below. If Buyer elects to proceed with the purchase, then upon
the Closing, there shall be a credit against the Purchase Price due hereunder
equal to the amount of any insurance proceeds or condemnation awards collected
by Seller as a result of any such damage or destruction or condemnation, plus
the amount of any insurance deductible, less any sums expended by Seller toward
the restoration or repair of the Property. If the proceeds or awards have not
been collected as of the Closing, then such proceeds or awards shall be assigned
to Buyer, except to the extent needed to reimburse Seller for sums expended to
repair or restore the Property, and Seller shall retain the rights to such
proceeds and awards.
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ARTICLE VI
BROKERS AND EXPENSES
SECTION 6.1 BROKERS.
The parties represent and warrant to each other that no broker or finder
was instrumental in arranging or bringing about this transaction except for
Xxxxxxx & Xxxxxxxxx of California, Inc. ("Seller's Broker"). At Closing, Seller
shall pay the commission due, if any, to Seller's Broker, which shall be paid
pursuant to a separate agreement between Seller and Seller's Broker. If any
other person brings a claim for a commission or finder's fee based upon any
contact, dealings or communication with Buyer or Seller, then the party through
whom such person makes his claim shall defend the other party (the "Indemnified
Party") from such claim, and shall indemnify the Indemnified Party and hold the
Indemnified Party harmless from any and all costs, damages, claims, liabilities
or expenses (including without limitation, reasonable attorneys' fees and
disbursements) incurred by the Indemnified Party in defending against the claim.
The provisions of this Section 6.1 shall survive the Closing or, if the purchase
and sale is not consummated, any termination of this Agreement.
SECTION 6.2 EXPENSES.
Except as provided in Sections 4.2 above and 8.5(b) below, each party
hereto shall pay its own expenses incurred in connection with this Agreement and
the transactions contemplated hereby.
ARTICLE VII
LEASES AND OTHER AGREEMENTS
SECTION 7.1 BUYER'S APPROVAL OF NEW LEASES AND AGREEMENTS AFFECTING THE
PROPERTY.
Between the date hereof and the Closing, Seller shall not enter into any
new lease or other agreement affecting the Property, or modify or terminate any
existing lease or other agreement affecting the Property, without first
obtaining Buyer's approval, which will not be unreasonably withheld or delayed
and which approval may take into account, without limitation, any tenant
improvement work, leasing commissions, free rent and other concessions for which
Buyer may be responsible or which may be allocated to Buyer. If Buyer fails to
give Seller notice of its approval or disapproval of any such proposed action
within two (2) business days after Seller notifies Buyer of Seller's desire to
take such action, then Buyer shall be deemed to have given its approval.
SECTION 7.2 TENANT IMPROVEMENT COSTS AND LEASING COMMISSIONS.
Seller shall be responsible for the cost of any and all tenant
improvement work and leasing commissions for the current term of any lease
affecting the Property fully executed and delivered by Seller and a tenant prior
to the date of this Agreement, provided that to the extent there are any such
outstanding tenant improvement costs as of the Closing, Buyer shall receive a
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credit therefor and shall assume all such obligations on and after the Closing.
With respect to any new lease or lease modification entered into by Seller,
between the date of this Agreement and the Closing Date and approved, or deemed
approved, by Buyer pursuant to Section 7.1, or lease renewal or lease extension
pursuant to the existing terms of a lease which is exercised after the date
hereof, if Seller performs or pays or contracts for any tenant improvement work
or pays or contracts for any leasing commissions before the Closing, then at
Closing, such expenses shall be prorated as provided hereafter, and Buyer shall
assume pursuant to the assignment and assumption agreement described in Section
8.3(a)(3) any and all obligations outstanding with respect to Buyer's share of
such tenant improvements and leasing commissions. On and after the Closing,
Seller shall have no further obligations with respect to Buyer's share of such
costs which are prorated as hereafter provided. Notwithstanding the foregoing,
Buyer hereby approves the leases set forth on SCHEDULE 3 attached hereto. With
respect to any tenant improvement work, or leasing commissions, to be prorated
pursuant to this Section 7.2, such shall be prorated between Buyer and Seller as
follows: If, as a result of such new lease or lease modification, lease renewal
or lease extension, the gross rent payable by all tenants of the Property does
not exceed the gross rent payable pursuant to all leases in effect as of the
date of this Agreement which gross rent shall be determined as set forth on
SCHEDULE 4 attached hereto and made a part hereof, all such tenant improvement
work, and leasing commissions, attributable to such new lease, lease
modification, lease renewal or lease extension shall be paid by Seller. If, as a
result of such new lease or lease modification, lease renewal or lease extension
the gross rent payable by all tenants of the Property does exceed the gross rent
payable pursuant to all leases in effect as of the date of this Agreement, all
such tenant improvement work, and leasing commissions attributable to such new
lease, lease modification, lease renewal or lease extension shall be prorated so
that Seller pays or Buyer receives a credit (if Seller has not paid) for a
portion thereof determined by multiplying the amounts thereof by the number of
days of the initial term of the applicable lease which have elapsed at the
Closing, dividing by the total number of days in the initial term of such lease,
and further multiplying by a fraction which is the portion of the gross rent
under such lease which does not represent an increase in the gross rent payable
pursuant to all leases in effect as of the date of this Agreement, and Buyer
pays or Seller receives a credit (if Seller has paid) for the balance. Anything
contained herein to the contrary notwithstanding, Seller shall pay and Buyer
shall have no liability for, any and all commissions, bonuses or incentives
payable to Seller's employees arising out of any such new lease, lease
modification, lease renewal or lease extension. The provisions of this Section
shall survive the Closing.
SECTION 7.3 SERVICE CONTRACTS.
Seller will terminate all property management, brokerage and leasing
contracts affecting the Property at Closing.
SECTION 7.4 TENANT NOTICES.
At the Closing, Seller shall furnish Buyer with a signed notice to be
given to each tenant of the Property. The notice shall disclose that the
Property has been sold to Buyer, that, after the Closing, all rents should be
paid to Buyer at an address to be supplied by Buyer and that Buyer shall be
responsible for all the tenant's security deposit. The form of the notice and
the amount of each tenant's security deposit listed therein shall be otherwise
reasonably acceptable to the parties.
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ARTICLE VIII
CLOSING AND ESCROW
SECTION 8.1 ESCROW INSTRUCTIONS.
Upon execution of this Agreement, the parties hereto shall deposit an
executed counterpart of this Agreement with the Title Company, and this
instrument shall serve as the instructions to the Title Company as the escrow
holder for consummation of the purchase and sale contemplated hereby. Seller and
Buyer agree to execute such reasonable additional and supplementary escrow
instructions as may be appropriate to enable the Title Company to comply with
the terms of this Agreement; provided, however, that in the event of any
conflict between the provisions of this Agreement and any supplementary escrow
instructions, the terms of this Agreement shall control.
SECTION 8.2 CLOSING.
The Closing hereunder shall be held and delivery of all items to be made
at the Closing under the terms of this Agreement shall be made at the offices of
the Title Company on December 22, 1998, or such other earlier date and time as
Buyer and Seller may mutually agree upon in writing (the "Closing Date").
Notwithstanding the foregoing, Buyer shall have the right to extend the Closing
Date to December 28, 1998, before 10:00 a.m. local time, provided that
(a) on or before December 22, 1998, (i) Buyer delivers to Seller
and Title Company written notice of its election to extend the Closing
Date, and (ii) Buyer deposits in escrow all documents to be executed and
delivered by Buyer at Closing, including without limitation the Closing
Statement; and
(b) on or before December 24, 1998, the balance of the Purchase
Price, which is Six Million Three Hundred Fifty Thousand Dollars
($6,350,000), shall be deposited in cash in escrow with the Title
Company.
Except as expressly provided in this Agreement, such date and time may not be
extended without the prior written approval of both Seller and Buyer. All funds
of Buyer to be deposited in escrow for the Closing shall be deposited by Buyer
in escrow no later than the last business day prior to the Closing Date. In the
event that Buyer extends the Closing Date as specified above, Seller agrees to
deposit in escrow on or before December 22, 1998, all documents to be executed
and delivered by Seller at Closing, including without limitation the Closing
Statement.
SECTION 8.2 DEPOSIT OF DOCUMENTS.
(a) At or before the Closing, Seller shall deposit into escrow
the following items with respect to its portion of the Property:
(1) the duly executed and acknowledged Deed conveying all of
the Seller's right, title and interest to the Real Property to Buyer subject to
the Conditions of Title;
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(2) four (4) duly executed counterparts of the Xxxx of Sale
in the form attached hereto as EXHIBIT D (the "Xxxx of Sale") conveying all of
the Seller's right, title and interest in and to the Personal Property, with
Exhibit C to said Xxxx of Sale listing the Conditions of Title;
(3) four (4) duly executed counterparts of an Assignment and
Assumption of Leases, Service Contracts and Warranties in the form attached
hereto as EXHIBIT E pursuant to the terms of which Buyer shall assume all of
Seller's obligations under the leases, equipment leases, service contracts,
leasing commission agreements and tenant improvement agreements affecting the
Property to the extent set forth in said EXHIBIT E (the "Assignment of Leases"),
with Exhibit D to said document listing the Conditions of Title;
(4) an affidavit pursuant to Section 1445(b)(2) of the
Federal Code, and on which Buyer is entitled to rely, that Seller is not a
"foreign person" within the meaning of Section 1445(f)(3) of the Federal Code;
(5) California 590RE Certificate; and
(6) Four (4) duly executed counterparts of a closing
statement in form and content satisfactory to Buyer and Seller (the "Closing
Statement") duly executed by Seller.
(b) At or before Closing, Buyer shall deposit into escrow the
following items:
(1) funds necessary to close this transaction;
(2) four (4) duly executed counterparts of the Xxxx of Sale;
(3) four (4) duly executed counterparts of the Assignment of
Leases; and
(4) Four (4) duly executed counterparts of the Closing
Statement.
(c) Buyer and Seller shall each deposit such other instruments
as are reasonably required by the Title Company or otherwise required to close
the escrow and consummate the purchase and sale of the Property in accordance
with the terms hereof, including, without limitation, an agreement (the
"Designation Agreement") designating Title Company as the "Reporting Person" for
the transaction pursuant to Section 6045(e) of the Federal Code and the
regulations promulgated thereunder, and executed by Seller, Buyer and Title
Company. The Designation Agreement shall appear in Seller's and Buyer's escrow
instructions and shall be in a form reasonably acceptable to the parties, and,
in any event, shall comply with the requirements of Section 6045(e) of the
Federal Code and the regulations promulgated thereunder.
(d) Seller shall deliver to Buyer originals of the leases, copies of the tenant
correspondence files (for the three (3) most recent years of Seller's ownership
of the Property only), and originals of any other items which Seller was
required to furnish Buyer copies of or make available at the Property pursuant
to Section 2.1(e) above, except for Seller's general ledger and other internal
books or records which shall be retained by Seller, within five (5)
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business days after the Closing Date. Seller shall deliver to Buyer a set of
keys to the Property on the Closing Date.
SECTION 8.4 ESTOPPEL CERTIFICATES. Buyer has reviewed and approved all
of the tenant estoppel certificates obtained with respect to the Property, and
obtaining any additional estoppel certificates shall not be a condition to
Buyer's obligations hereunder.
SECTION 8.5 PRORATIONS.
(a) Rents, including, without limitation, percentage rents, if
any, and any additional charges and expenses payable under tenant leases, all as
and when actually collected (whether such collection occurs prior to, on or
after the Closing Date); real property taxes and assessments; water, sewer and
utility charges; amounts payable under any service contracts; annual permits
and/or inspection fees (calculated on the basis of the period covered); and any
other expenses of the operation and maintenance of the Property (including,
without limitation, those expenses listed on SCHEDULE 5 attached hereto already
paid by Seller but which are being amortized over time by Seller and with
respect to which Seller shall receive a credit at Closing in the amount of the
unamortized portion thereof), together with tenant improvement costs, leasing
commissions, as provided in Section 7.2 above, shall all be prorated as of 12:01
a.m. on the date the Deed is recorded, on the basis of a 365-day year. Any sums
collected by Buyer from tenants after the Closing shall be promptly paid to
Seller to the extent of any rents and other sums which were delinquent at
Closing, after first applying all such amounts collected to current obligations.
Buyer shall use reasonable efforts to collect such delinquent rents but shall
not be obligated to expend any sums, commence any litigation, terminate any
lease or threaten to terminate any lease to do so. Seller retains the rights to
collect any such delinquent rents from tenants after Closing provided that
Seller shall not commence any legal or equitable proceedings in the nature of an
unlawful detainer, eviction or other proceeding which would have the effect of
interfering with any tenant's quiet enjoyment of its leased premises or result
in a lien or encumbrance on such leased premises. The amount of any security
deposits under tenant leases shall be credited against the Purchase Price.
Seller shall receive credits at Closing for the amount of any utility or other
deposits with respect to the Property, in which case all such deposits for which
Seller receives credit shall remain in place for the benefit of Buyer and Seller
shall execute and deliver such documents as shall be necessary to assign such
deposits to Buyer. Buyer shall cause all utilities to be transferred into
Buyer's name and account at the time of Closing. Seller and Buyer hereby agree
that if any of the aforesaid prorations and credits cannot be calculated
accurately on the Closing Date, then the same shall be calculated as soon as
reasonably practicable after the Closing Date and either party owing the other
party a sum of money based on such subsequent proration(s) or credits shall
promptly pay said sum to the other party. Seller and Buyer shall jointly prepare
and approve a preliminary Closing Statement on the basis of the leases and other
sources of income and expenses, and shall deliver such computation to the Title
Company prior to the Closing.
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(b) Seller shall pay one-half (1/2) of the escrow fee, any
county transfer taxes applicable to the sale, and the costs of obtaining the
CLTA portion of the title insurance policy. Buyer shall pay the costs of
obtaining the ALTA portion of the title insurance policy, the cost of any
endorsements, and one-half (1/2) of the escrow fee. Recording charges and any
other expenses of the escrow for the sale shall be paid by Buyer and Seller in
accordance with customary practice as determined by the Title Company. In
addition, Seller shall be liable for any prepayment fee or other charge payable
in connection with any payoff of deeds of trusts or mortgages entered into by
Seller.
(c) The provisions of this Section 8.5 shall survive the
Closing.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 NOTICES.
Any notices required or permitted to be given hereunder shall be given
in writing and shall be delivered (a) in person, (b) by certified mail, postage
prepaid, return receipt requested, (c) by facsimile with confirmation of
receipt, or (d) by a commercial overnight courier that guarantees next day
delivery and provides a receipt, and such notices shall be addressed as follows:
To Buyer: Pacific Gulf Properties Inc.
0000 Xxx Xxxxxx Xxxxxx
Xxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
Telephone: (000) 000-0000
Fax No.: (000) 000-0000
with a copy to: Xxx, Castle & Xxxxxxxxx LLP
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxx, Esq.
Telephone: (000) 000-0000
Fax No.: (000) 000-0000
To Seller: c/o RREEF America L.L.C.
000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxxx
Telephone: (000) 000-0000
Fax No.: (000) 000-0000
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with a copy to: Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Fax No.: (000) 000-0000
To Title Company: Chicago Title Company
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxx Xxxxx
Telephone: (000) 000-0000
Fax No.: (000) 000-0000
or to such other address as either party may from time to time specify in
writing to the other party. Any notice shall be effective only upon delivery.
SECTION 9.2 ENTIRE AGREEMENT.
This Agreement, together with the Exhibits hereto, contains all
representations, warranties and covenants made by Buyer and Seller and
constitutes the entire understanding between the parties hereto with respect to
the subject matter hereof. Any prior correspondence, memoranda or agreements are
replaced in total by this Agreement together with the Exhibits hereto.
SECTION 9.3 ENTRY AND INDEMNITY.
In connection with any entry by Buyer, or its agents, employees or
contractors onto the Property, Buyer shall give Seller reasonable advance notice
of such entry and shall conduct such entry and any inspections in connection
therewith so as to minimize, to the extent reasonably possible, interference
with Seller's business and the business of Seller's tenants and otherwise in a
manner reasonably acceptable to Seller. Without limiting the foregoing, prior to
any entry to perform any on-site testing, Buyer shall give Seller written notice
thereof, including the identity of the company or persons who will perform such
testing and the proposed scope of the testing. Seller shall approve or
disapprove, in Seller's sole discretion, the proposed testing within three (3)
business days after receipt of such notice. If Seller fails to respond within
such three (3) business day period, Seller shall be deemed to have disapproved
the proposed testing. If Buyer or its agents, employees or contractors take any
sample from the Property in connection with any such approved testing, Buyer
shall provide to Seller a portion of such sample being tested to allow Seller,
if it so chooses, to perform its own testing. Seller or its representative may
be present to observe any testing or other inspection performed on the Property.
Buyer shall not contact any governmental authority with respect to any
environmental matter relating to the Property, except for the sole and limited
purpose of obtaining information necessary to prepare a Phase I environmental
study, without first obtaining the prior written consent of Seller thereto, and
Seller, at Seller's election, shall be entitled to have a representative on any
phone or other contact made by Buyer to a governmental authority and present at
any meeting by Buyer with a governmental authority. In the event Buyer contacts
any governmental authority with respect to
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any matter other than environmental matters relating to the Property, Buyer
shall provide Seller with prior notice of such contact. Buyer shall maintain,
and shall assure that its contractors maintain, public liability and property
damage insurance in amounts and in form and substance adequate to insure against
all liability of Buyer and its agents, employees or contractors, arising out of
any entry or inspections of the Property pursuant to the provisions hereof, and
Buyer shall provide Seller with evidence of such insurance coverage upon request
by Seller. Buyer shall indemnify and hold Seller harmless from and against any
costs, damages, liabilities, losses, expenses, liens or claims (including,
without limitation, reasonable attorney's fees) arising out of or relating to
any entry on the Property by Buyer, its agents, employees or contractors in the
course of performing the inspections, testings or inquiries provided for in this
Agreement. The foregoing indemnity shall survive beyond the Closing, or, if the
sale is not consummated, beyond the termination of this Agreement.
SECTION 9.4 TIME.
Time is of the essence in the performance of each of the parties'
respective obligations contained herein.
SECTION 9.5 ATTORNEYS' FEES.
If either party hereto fails to perform any of its obligations under
this Agreement or if any dispute arises between the parties hereto concerning
the meaning or interpretation of any provision of this Agreement, then the
defaulting party or the party not prevailing in such dispute, as the case may
be, shall pay any and all costs and expenses incurred by the other party on
account of such default and/or in enforcing or establishing its rights
hereunder, including, without limitation, court costs and reasonable attorneys'
fees and disbursements. Any such attorneys' fees and other expenses incurred by
either party in enforcing a judgment in its favor under this Agreement shall be
recoverable separately from and in addition to any other amount included in such
judgment, and such attorneys' fees obligation is intended to be severable from
the other provisions of this Agreement and to survive and not be merged into any
such judgment.
SECTION 9.6 ASSIGNMENT.
Buyer's rights and obligations hereunder shall not be assignable without
the prior written consent of Seller. Notwithstanding the foregoing, Seller's
consent shall not be required for any assignment by Buyer to an entity of which
Buyer has majority ownership and control. Buyer shall in no event be released
from any of its obligations or liabilities hereunder in connection with any
assignment. Without limiting the above, in no event shall Buyer have the right
to assign its rights or obligations hereunder to any party which could not make
the representation and warranty contained in subsection 3.5(e) above, and in
connection with any assignment pursuant to the terms hereof, the assignee shall
reconfirm in a written instrument acceptable to Seller and delivered to Seller
prior to the assignment said representation and warranty as applied to the
assignee. Subject to the provisions of this Section, this Agreement shall inure
to the benefit of and be binding upon the parties hereto and their respective
successors and assigns.
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SECTION 9.7 COUNTERPARTS.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which taken together shall
constitute one and the same instrument.
SECTION 9.8 GOVERNING LAW.
This Agreement shall be governed by and construed in accordance with the
laws of the State of California.
SECTION 9.9 CONFIDENTIALITY AND RETURN OF DOCUMENTS.
Buyer and Seller shall each maintain as confidential any and all
material obtained about the other or, in the case of Buyer, about the Property,
this Agreement or the transactions contemplated hereby, and shall not disclose
such information to any third party other than (i) each party's respective
consultants and professionals in connection with their review, evaluation,
negotiation and closing of the subject transaction, (ii) the parties= actual and
prospective lenders and investors, or (iii) the parties= officers, directors,
employees, agents, contractors, affiliates and representatives (collectively,
the "Representatives"), provided that all such parties shall keep such
information confidential as provided herein. The parties agree to keep, and to
use all reasonable efforts to cause the Representatives to keep, any information
and documents received from the other party (or based upon the party's
evaluation of the Property) confidential, except to the extent (a) such
information was known by the party prior to the date hereof on the basis of
information provided to the party by persons other than the other party or its
agents, (b) such information was of general public knowledge prior to the date
hereof, or (c) disclosure is required by law or court order or is used in
connection with any litigation between the parties hereto. This provision shall
survive the Closing or any termination of this Agreement.
SECTION 9.10 INTERPRETATION OF AGREEMENT.
The article, section and other headings of this Agreement are for
convenience of reference only and shall not be construed to affect the meaning
of any provision contained herein. Where the context so requires, the use of the
singular shall include the plural and vice versa and the use of the masculine
shall include the feminine and the neuter. The term "person" shall include any
individual, partnership, joint venture, corporation, trust, unincorporated
association, any other entity and any government or any department or agency
thereof, whether acting in an individual, fiduciary or other capacity.
SECTION 9.11 LIMITED LIABILITY.
The obligations of Seller are intended to be binding only on the
property of Seller and shall not be personally binding upon, nor shall any
resort be had to, the private properties of any of its trustees, officers,
beneficiaries, directors, members, or shareholders, or of its investment
manager, the general partners, officers, directors, members, or shareholders
thereof, or any employees or agents of Seller or its investment manager. The
obligations of Buyer are intended to be binding only on the property of Buyer
and shall not be personally binding upon, nor shall
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any resort be had to, the private properties of any of its trustees, officers,
beneficiaries, directors, members, or shareholders, or any employees or agents
of Buyer.
SECTION 9.12 AMENDMENTS.
This Agreement may be amended or modified only by a written instrument
signed by Buyer and Seller.
SECTION 9.13 NO RECORDING.
Neither this Agreement or any memorandum or short form thereof may be
recorded by Buyer.
SECTION 9.14 DRAFTS NOT AN OFFER TO ENTER INTO A LEGALLY BINDING
CONTRACT.
The parties hereto agree that the submission of a draft of this
Agreement by one party to another is not intended by either party to be an offer
to enter into a legally binding contract with respect to the purchase and sale
of the Property. The parties shall be legally bound with respect to the purchase
and sale of the Property pursuant to the terms of this Agreement only if and
when the parties have been able to negotiate all of the terms and provisions of
this Agreement in a manner acceptable to each of the parties in their respective
sole discretion, including, without limitation, all of the Exhibits and
Schedules hereto, and both Seller and Buyer have fully executed and delivered to
each other a counterpart of this Agreement, including, without limitation, all
Exhibits and Schedules hereto.
SECTION 9.15 ERISA.
Prior to Seller's execution of this Agreement, Buyer shall furnish to
Seller all information regarding Buyer, its affiliates and the shareholders,
members, investors or partners of each of them (collectively, the "Buyer Related
Parties") as Seller requests in order to enable Seller to determine to Seller's
sole satisfaction that Buyer's representation and warranty contained in Section
3.5(e) of this Agreement is true and correct. Buyer represents and warrants to
Seller that there will not be any change in any such information regarding Buyer
or the Buyer Related Parties prior to or on the Closing. Buyer's representation
and warranty in Section 3.5(e) shall be deemed qualified in all respects by any
such information provided to Seller.
SECTION 9.16 NO PARTNERSHIP.
The relationship of the parties hereto is solely that of Seller and
Buyer with respect to the Property and no joint venture or other partnership
exists between the parties hereto. Neither party has any fiduciary relationship
hereunder to the other.
SECTION 9.17 NO THIRD PARTY BENEFICIARY.
The provisions of this Agreement are not intended to benefit any third
parties.
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SECTION 9.18 SEC COMPLIANCE.
Seller hereby agrees to (i) cooperate with the auditors for Buyer to
allow Buyer's auditors to perform and complete in an expeditious manner from the
date hereof and no later than thirty (30) days after the Closing Date, an audit
of financial information prepared in accordance with GAAP for calendar year 1997
for the 314 Securities and Exchange Commission filing report and (ii) execute a
management representation letter in form reasonably acceptable to Seller and
limited to the actual knowledge of the portfolio manager of the Property (the
"Representation Letter"). The word "knowledge" shall be deemed to refer to the
current actual knowledge at the time indicated only and not implied, imputed or
constructive knowledge, without any independent investigation having been made
or any implied duty to investigate. Any representation or warranty contained in
such Representation Letter shall be considered representations of Seller under
this Agreement and shall be subject to all terms and conditions contained in
this Agreement, including without limitation, Sections 3.3, 9.2, 9.11 and 9.19
herein.
SECTION 9.19 LIMITATION ON LIABILITY.
Notwithstanding anything to the contrary contained herein, after the
Closing the maximum aggregate liability of Seller, and the maximum aggregate
amount which may be awarded to and collected by Buyer under this Agreement
(including, without limitation, for any breach of representation and warranty
contained herein), and any and all documents executed pursuant hereto or in
connection herewith (collectively the "Other Documents") including, without
limitation, the Deed, the Xxxx of Sale and the Assignment of Leases, shall under
no circumstances whatsoever exceed Three Percent (3%) of the Purchase Price.
SECTION 9.20 SURVIVAL.
Except as expressly set forth to the contrary herein, no
representations, warranties, covenants or agreements of the Seller contained
herein shall survive the Closing.
SECTION 9.21 SURVIVAL OF ARTICLE IX.
The provisions of this Article IX shall survive the Closing.
SECTION 9.22 POSSESSION.
Seller shall deliver possession of the Property to Buyer upon the
Closing, subject to the Conditions of Title.
SECTION 9.23 MAINTENANCE.
Between the date hereof and Closing, Seller shall operate the Property
pursuant to Seller's customary procedures consistent with the manner in which
Seller has operated the Property during Seller's ownership, provided Seller
shall not be obligated to make any capital expenditures in connection with such
operation.
22
23
SECTION 9.24 INSURANCE.
Between the date hereof and Closing, Seller shall keep in effect all
blanket insurance policies presently in effect as of the date hereof, except
that Seller may modify its insurance coverage as long as Seller is doing so for
all or substantially all of the properties covered by such blanket policies.
SECTION 9.25 SECTION 1031 EXCHANGE.
Buyer may consummate the purchase of the Property as part of a so-called
like kind exchange (the "Exchange") pursuant to Section 1031 of the Internal
Revenue Code of 1986, as amended (the "Code"), provided that: (a) Closing shall
not be delayed or affected by reason of the Exchange nor shall the consummation
or accomplishment of the Exchange be a condition precedent or condition
subsequent to Buyer's obligations under this Agreement; (b) Buyer shall effect
the Exchange through an assignment of this Agreement, or its rights under this
Agreement, to a qualified intermediary, provided that such assignment shall not
release Buyer of its obligations hereunder and that all Closing documents,
including, without limitation, the Deed, Xxxx of Sale and Assignment of Leases
shall be directly between Buyer and Seller; (c) Seller shall not be required to
take an assignment of the purchase agreement for other property or be required
to acquire or hold title to, or any beneficial interest in, any real property
for purposes of consummating the Exchange; and (d) Buyer shall pay any
additional costs or expenses that would not otherwise have been incurred by
Buyer or Seller had Buyer not consummated its purchase through the Exchange.
Seller shall not by this Agreement or acquiescence to the Exchange have its
rights under this Agreement affected or diminished in any manner or be
responsible for compliance with or be deemed to have warranted to Buyer that the
Exchange in fact complies with Section 1031 of the Code and Buyer, will rely
solely and exclusively on its own tax advice with respect thereto. Seller shall
have the right to review and approve any documents to be executed by Seller in
connection with the Exchange, provided that Seller shall have no obligation to
execute any documents or to undertake any action by which Seller would or might
incur any liability or obligation not otherwise provided for in the other
provisions of this Agreement. Buyer shall indemnify and defend Seller and hold
Seller harmless from and against any and all claims, damages, liabilities,
losses, costs and expenses, including, without limitation, attorneys' fees and
costs, arising out of or in any way connected with the Exchange that Seller
would not have incurred but for the Exchange.
SECTION 9.26 SELLER'S CONDITIONS RELATED TO OTHER PURCHASE AGREEMENTS.
Concurrently with the execution and delivery hereof, SPT Real Estate
Corp. E (the "Broadway Seller") and Buyer are entering into a purchase and sale
agreement (the "Broadway Sale Agreement") with respect to certain additional
real property (the "Broadway Property"). It is a condition to Seller's
obligations hereunder that the Broadway Sale Agreement not be terminated on or
before the Closing. If for any reason whatsoever the Broadway Sale Agreement is
terminated on or prior to the Closing hereunder, then Seller shall have the
option, at its sole discretion, to waive such condition or to terminate this
Agreement by written notice to Buyer. Upon such termination, neither party shall
have any further rights or obligations hereunder, except as provided in Sections
6.1, 6.3 and 9.9, provided nothing contained herein shall limit Seller's rights
hereunder, including, without limitation, Seller's rights under Section 1.2, if
the
23
24
termination is as a result of a default hereunder or under the Broadway Sale
Agreement by Buyer. Without limiting the foregoing, any default by Buyer under
the Broadway Sale Agreement shall be a default by Buyer hereunder.
The parties hereto have executed this Agreement as of the respective
dates written below.
SELLER: SPT REAL ESTATE CORP. D,
a Delaware corporation
By:
-------------------------
Xxxxxxx X. Xxxxxx
Its: President
Date: , 1998
----------------------
BUYER: PACIFIC GULF PROPERTIES INC.,
a Maryland corporation
By:
-------------------------
Its:
------------------------
Date: , 1998
----------------------
By:
-------------------------
Its:
------------------------
Date: , 1998
----------------------
24
25
COUNTERPART SIGNATURE PAGE TO
AGREEMENT OF PURCHASE AND SALE
DATED AS OF DECEMBER 11, 1998
(TITLE COMPANY)
Title Company agrees to act as escrow holder and title company in
accordance with the terms of this Agreement and to act as the Reporting Person
in accordance with Section 6045(e) of the Internal Revenue Code and the
regulations promulgated thereunder.
CHICAGO TITLE COMPANY
By:
---------------------------
Its:
--------------------------
Date: , 1998
------------------
25
26
LIST OF EXHIBITS AND SCHEDULES
EXHIBITS
Exhibit A Real Property Description
Exhibit B List of Tenant Leases
Exhibit C California Grant Deed
Exhibit D Xxxx of Sale
Exhibit E Assignment of Leases, Service Contracts and Warranties
SCHEDULES
Schedule 1 Disclosure Items
Schedule 2 Employee Benefit Plans
Schedule 3 Leases Approved by Buyer
Schedule 4 Gross Rent
Schedule 5 Unamortized Expenses
27
SCHEDULE 1
DISCLOSURE ITEMS
(WEST SACRAMENTO INDUSTRIAL CENTER)
1. Natural hazards described in the following California code sections
(the "Natural Hazard Laws") may affect such properties: (A) Govt. Code Section
8589.4; (B) Govt. Code Section 51183.4 (Fire Hazard Severity Zone); (C) Public
Resource Code Section 2621.9 (Earthquake Fault Zone); (D) Public Resource Code
Section 2694 (Seismic Hazard Zone); and (E) Public Resource Code Section 4136
(Wildland Area). Buyer acknowledges and agrees that Buyer will independently
evaluate and investigate whether any or all of such Natural Hazards affect such
properties and Seller shall have no liabilities or obligations with respect
thereto. Without limiting the foregoing, Buyer acknowledges and agrees that
Buyer knowingly and intentionally waives any disclosures, obligations or
requirements of Seller with respect to Natural Hazards, including, without
limitation, any disclosure obligations or requirements under the aforementioned
code sections. BUYER ACKNOWLEDGES AND REPRESENTS THAT BUYER HAS EXTENSIVE
EXPERIENCE ACQUIRING AND CONDUCTING DUE DILIGENCE REGARDING COMMERCIAL
PROPERTIES. THIS WAIVER BY BUYER OF ANY RIGHTS IT MAY HAVE HAS BEEN NEGOTIATED
AND IS AN ESSENTIAL ASPECT OF THE BARGAIN BETWEEN THE PARTIES.
2. Buyer acknowledges the possible presence of asbestos in mastic,
certain drywall paste, and floor tiles as well as PCB's in light fixtures,
although Seller has received no actual written notice of the presence or absence
of these materials.
S1-1
28
SCHEDULE 2
EMPLOYEE BENEFIT PLANS
Shell Pension Trust
S2-1
29
SCHEDULE 3
LEASES APPROVED BY BUYER
[NONE]
S3-1
30
SCHEDULE 4
GROSS RENT
----------------------------- -----------------------------------------------
West Sacramento Industrial Center $ 52,209.00
-----------------------------------------------------------------------------
For purposes hereof, "Gross Rent" shall mean the total of the monthly base rent
payable by the existing tenants of each Property as of October 1998.
S4-1
31
SCHEDULE 5
UNAMORTIZED EXPENSES
[None]
S5-1
32
EXHIBIT A
REAL PROPERTY DESCRIPTION
A1-1
33
EXHIBIT B
LIST OF TENANT LEASES
B-1
34
EXHIBIT C
FORM OF CALIFORNIA GRANT DEED
RECORDING REQUESTED BY
WHEN RECORDED RETURN TO:
Xxx, Castle & Xxxxxxxxx LLP
0000 Xxxxxxx Xxxx Xxxx, 00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Attn: Xxxx X. Xxxx, Esq.
AND MAIL TAX STATEMENTS TO:
---------------------------
---------------------------
---------------------------
Attention:
-----------------
Documentary Transfer Tax is not of public record and is shown on a separate
sheet attached to this deed.
------------------------------------------------------------------------
GRANT DEED
FOR VALUABLE CONSIDERATION, the receipt of which is hereby acknowledged,
________________________ ("Grantor") hereby grants to
___________________________ ("Grantee", the real property located in the City of
_____________, County of _____________, State of California, described on
EXHIBIT A attached hereto and made a part hereof. Grantor is conveying the
Property to Grantee subject to the exceptions to title thereto described on
EXHIBIT B attached hereto and made a part hereof.
Executed as of ______________, 1998.
[SELLER],
a
-----------------------------
By:
-----------------------
Its:
----------------------
X0-0
00
XXXXX XX XXXXXXXXXX )
) ss
COUNTY OF __________________)
On _____________, 1998, before me, ______________________, a notary
public for the State of California, personally appeared ______________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person whose name is subscribed to the within instrument and
acknowledged to me that he/she executed the same in his/her authorized capacity,
and that by his/her signature on the instrument the person, or the entity on
behalf of which the person acted, executed the instrument.
Witness my hand and official seal.
------------------------------
Signature
[SEAL]
C1-2
36
EXHIBIT A
TO GRANT DEED
[LEGAL DESCRIPTION]
C3-1
37
EXHIBIT B
TO GRANT DEED
(a) Interests of tenants in possession pursuant to the terms of
their leases;
(b) Non-delinquent liens for real estate taxes and assessments; and
(c) Any exceptions disclosed by the preliminary title reports and
amendments thereto received by Grantee, the public records or
other documents or items delivered to Grantee, and any other
exceptions to title which would be disclosed by an inspection
and/or survey of the Property.
38
________________, 199__
____________ County Recorder
Re: Request That Statement of Documentary
Transfer Tax Not be Recorded
Dear Sir or Madam:
Request is hereby made in accordance with Section 11932 of the Revenue
and Taxation Code that this statement of tax due not be recorded with the
attached deed but be affixed to the deed after recordation and before return as
directed on the deed.
The attached deed names _______________________, a _______________, as
grantor, and ________________________, a _______________________, as grantee.
The property being transferred and described in the attached deed is
located in the City of ______________, ____________ County, California.
The amount of Documentary Transfer Tax due on the attached deed is
$____________, computed on full value of the property conveyed.
[SELLER]
a _______________________
By: _______________________________
Its: ______________________________
39
EXHIBIT D
XXXX OF SALE
This Xxxx of Sale (the "Xxxx of Sale") is made and entered into
____________, 199__, by and between ____________________("Assignor"), and
__________________("Assignee").
In consideration of the sum of Ten Dollars ($10) and other good and
valuable consideration paid by Assignee to Assignor, the receipt and sufficiency
of which are hereby acknowledged by Assignor, Assignor does hereby assign,
transfer, convey and deliver to Assignee, its successors and assigns, free and
clear of any liens or encumbrances created by, through or under Assignor, all
items of tangible personal property, if any, owned by Assignor and situated upon
and used exclusively in connection with the land described on the attached
Exhibit A (the "Land") and the improvements located thereon (the
"Improvements"), including without limitation the items described on the
attached Exhibit B, but specifically excluding any and all personal property
owned by tenants or otherwise considered the property of tenants under any
leases affecting the Land or Improvements (the "Personal Property").
This Xxxx of Sale is made subject, subordinate and inferior to the
easements, covenants and other matters and exceptions set forth on Exhibit C,
attached hereto and made a part hereof for all purposes.
ASSIGNEE ACKNOWLEDGES AND AGREES THAT, EXCEPT AS EXPRESSLY PROVIDED
HEREIN OR IN THAT CERTAIN AGREEMENT OF PURCHASE AND SALE DATED _______________,
199__, BY AND BETWEEN ASSIGNOR AND ASSIGNEE (THE "AGREEMENT"), ASSIGNOR HAS NOT
MADE, DOES NOT MAKE AND SPECIFICALLY DISCLAIMS ANY REPRESENTATIONS, WARRANTIES,
PROMISES, COVENANTS, AGREEMENTS OR GUARANTIES OF ANY KIND OR CHARACTER
WHATSOEVER, WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN, PAST, PRESENT OR
FUTURE, OF, AS TO, CONCERNING OR WITH RESPECT TO (A) THE NATURE, QUALITY OR
CONDITIONS OF THE PERSONAL PROPERTY, (B) THE INCOME TO BE DERIVED FROM THE
PERSONAL PROPERTY, (C) THE SUITABILITY OF THE PERSONAL PROPERTY FOR ANY AND ALL
ACTIVITIES AND USES WHICH ASSIGNEE MAY CONDUCT THEREON, (D) THE COMPLIANCE OF OR
BY THE PERSONAL PROPERTY OR ITS OPERATION WITH ANY LAWS, RULES, ORDINANCES OR
REGULATIONS OF ANY APPLICABLE GOVERNMENTAL AUTHORITY OR BODY, (E) THE
HABITABILITY, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF THE
PERSONAL PROPERTY, OR (F) ANY OTHER MATTER WITH RESPECT TO THE PERSONAL
PROPERTY. ASSIGNEE FURTHER ACKNOWLEDGES AND AGREES THAT, HAVING BEEN GIVEN THE
OPPORTUNITY TO INSPECT THE PERSONAL PROPERTY, ASSIGNEE IS RELYING SOLELY ON ITS
OWN INVESTIGATION OF THE PERSONAL PROPERTY AND NOT ON ANY INFORMATION PROVIDED
OR TO BE PROVIDED BY ASSIGNOR, EXCEPT AS SPECIFICALLY PROVIDED HEREIN OR IN THE
AGREEMENT. ASSIGNEE FURTHER ACKNOWLEDGES AND AGREES THAT ANY INFORMATION
PROVIDED OR TO BE PROVIDED WITH RESPECT TO THE PERSONAL PROPERTY WAS OBTAINED
FROM A VARIETY OF SOURCES AND THAT ASSIGNOR HAS NOT MADE ANY INDEPENDENT
INVESTIGATION OR VERIFICATION OF SUCH INFORMATION. ASSIGNEE FURTHER ACKNOWLEDGES
AND AGREES THAT THE SALE OF THE PERSONAL PROPERTY AS PROVIDED FOR HEREIN IS MADE
ON AN "AS IS, WHERE IS" CONDITION AND BASIS "WITH ALL FAULTS," EXCEPT AS
SPECIFICALLY PROVIDED IN THE AGREEMENT.
D-1
40
The obligations of Assignor are intended to be binding only on the
property of Assignor and shall not be personally binding upon, nor shall any
resort be had to, the private properties of any of its trustees, officers,
beneficiaries, directors, members, or shareholders, or of its investment
manager, the general partners, officers, directors, members, or shareholders
thereof, or any employees or agents of Assignor or its investment manager. The
obligations of Assignee are intended to be binding only on the property of
Assignee and shall not be personally binding upon, nor shall any resort be had
to, the private properties of any of its trustees, officers, beneficiaries,
directors, members, or shareholders, or any employees or agents of Assignee.
IN WITNESS WHEREOF, Assignor and Assignee have caused this Xxxx of Sale
to be executed on the date and year first above written.
ASSIGNOR:
-----------------------------------
a
-----------------------------------
By:
-------------------------------
-------------------------------
Its Investment Manager
By:
-------------------------------
Its:
------------------------------
ASSIGNEE:
-----------------------------------
a
----------------------------------
By:
-------------------------------
Its:
------------------------------
D-2
41
EXHIBIT E
ASSIGNMENT OF LEASES, SERVICE CONTRACTS
AND WARRANTIES
This Assignment of Lease, Service Contracts and Warranties (this
"Assignment") is made and entered into _______________, 199__, by and between
_____________________________ ("Assignor"), and
_____________________________________________ ("Assignee").
For good and valuable consideration paid by Assignee to Assignor, the
receipt and sufficiency of which are hereby acknowledged by Assignor, Assignor
does hereby assign, transfer, set over and deliver unto Assignee all of
Assignor's right, title, and interest in (i) those certain leases and all
guaranties thereof (collectively, the "Leases") listed on Exhibit A, attached
hereto and made a part hereof for all purposes except for Seller's right to
collect delinquent rent and other delinquent sums owing under such Leases for
the period prior to the date hereof, (ii) those certain service contracts,
equipment leases, tenant improvement agreements and leasing agreements (the
"Contracts") listed on Exhibit B, if any, attached hereto and made a part hereof
for all purposes, (iii) those certain warranties held by Assignor (the
"Warranties") listed on Exhibit C, attached hereto and made a part hereof for
all purposes, and (iv) any intangible personal property now or hereafter used in
connection with the operation, maintenance, management, or occupancy of the Real
Property, including, without limitation, trade names and trademarks associated
with the Real Property (as defined in the Agreement) (provided Seller makes
absolutely no representation that it has any rights whatsoever with respect to
trade names or trademarks).
This Assignment is made subject, subordinate and inferior to the
easements, covenants and other matters and exceptions set forth on Exhibit D,
attached hereto and made a part hereof for all purposes.
ASSIGNEE ACKNOWLEDGES AND AGREES, BY ITS ACCEPTANCE HEREOF, THAT, EXCEPT
AS EXPRESSLY PROVIDED HEREIN OR IN THAT CERTAIN AGREEMENT OF PURCHASE AND SALE,
DATED AS OF _______________, 199__, BY AND BETWEEN ASSIGNOR AND ASSIGNEE (THE
"AGREEMENT"), THE LEASES, THE CONTRACTS AND THE WARRANTIES ARE CONVEYED "AS IS,
WHERE IS" AND IN THEIR PRESENT CONDITION WITH ALL FAULTS, AND THAT ASSIGNOR HAS
NOT MADE, DOES NOT MAKE AND SPECIFICALLY DISCLAIMS ANY REPRESENTATIONS,
WARRANTIES, PROMISES, COVENANTS, AGREEMENTS OR GUARANTIES OF ANY KIND OR
CHARACTER WHATSOEVER, WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN, PAST, PRESENT
OR FUTURE, OF, AS TO, CONCERNING OR WITH RESPECT TO THE NATURE, QUALITY OR
CONDITION OF THE LEASES, THE CONTRACTS OR THE WARRANTIES, THE INCOME TO BE
DERIVED THEREFROM, OR THE ENFORCEABILITY, MERCHANTABILITY OR FITNESS FOR ANY
PARTICULAR PURPOSE OF THE LEASES, THE CONTRACTS OR THE WARRANTIES.
Except as otherwise expressly provided herein or in the Agreement, by
accepting this Assignment and by its execution hereof, Assignee assumes the
payment and performance of, and agrees to pay, perform and discharge, all the
debts, duties and obligations to be paid, performed
F-1
42
or discharged from and after the Closing Date (as defined in the Agreement), by
(a) the "landlord" or the "lessor" under the terms, covenants and conditions of
the Leases, including, without limitation, brokerage commissions and compliance
with the terms of the Leases relating to tenant improvements and security
deposits, and (b) the owner under the Contracts and/or the Warranties.
Subject to terms and conditions of Section 9.19 of the Agreement,
Assignor agrees to indemnify Assignee and hold harmless and defend Assignee from
and against any and all claims, damages, liabilities, losses, costs and expenses
(including, without limitation, reasonable attorneys fees) resulting from any
failure by Assignor to have paid, performed or discharged any debts, duties or
obligations which Assignor was obligated to have paid, performed or discharged
prior to the Closing Date and accruing for the period prior to the Closing Date,
(a) by the landlord or lessor under the terms, covenants and conditions of the
Leases or (b) the owner under the Contracts and/or the Warranties, excluding,
with respect to clauses (a) and (b), any such debts, duties or obligations
arising out of or in any way related to the physical condition of the Property,
including, without limitation, the environmental condition thereof (as defined
in the Agreement) and any repair or remediation of the Property, but including
any such obligations arising out of damages suffered by and payable to a tenant
as a result of Assignor's breach prior to the Closing Date of a covenant of
landlord pursuant to the provisions of the Lease relating to the physical
condition of the Property, including without limitation, the environmental
condition thereof. Assignee agrees to indemnify, hold harmless and defend
Assignor from and against any and all claims, losses, liabilities, damages,
costs and expenses (including, without limitation, reasonable attorneys' fees)
resulting by reason of the failure of Assignee to pay, perform or discharge any
of the debts, duties or obligations assumed or agreed to by Assignee hereunder.
The obligations of Assignor are intended to be binding only on the
property of Assignor and shall not be personally binding upon, nor shall any
resort be had to, the private properties of any of its trustees, officers,
beneficiaries, directors, members, or shareholders, or of its investment
manager, the general partners, officers, directors, members, or shareholders
thereof, or any employees or agents of Assignor or its investment manager. The
obligations of Assignee are intended to be binding only on the property of
Assignee and shall not be personally binding upon, nor shall any resort be had
to, the private properties of any of its trustees, officers, beneficiaries,
directors, members, or shareholders, or any employees or agents of Assignee.
All of the covenants, terms and conditions set forth herein shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns.
IN WITNESS WHEREOF, Assignor and Assignee have caused this Assignment to
be executed on the day and year first above written.
ASSIGNOR:
---------------------------------
a
--------------------------------
By:
------------------------------
------------------------------
Its Investment Manager
F-2
43
By:
------------------------------
Its:
----------------------------
ASSIGNEE:
---------------------------------
a
-------------------------------
By:
------------------------------
Its:
-----------------------------
F-3
