1
EXHIBIT 10.3
PURCHASE AND SALE AGREEMENT AND ESCROW INSTRUCTIONS
THIS PURCHASE AND SALE AGREEMENT AND ESCROW INSTRUCTIONS (this
"Agreement"), dated December 10, 1997 for reference purposes, is entered into
by and between PACIFIC GULF PROPERTIES INC., a Maryland corporation, or its
nominee ("Buyer"), and FULLERTON BUSINESS CENTER, 1976, a California limited
partnership ("Seller").
IN CONSIDERATION of the respective agreements hereinafter set forth,
Seller and Buyer hereby agree as follows:
1. Property. Seller hereby agrees to sell and convey to Buyer, and
Buyer hereby agrees to purchase from Seller, subject to the terms and conditions
set forth herein, the following:
(a) that certain real property located at 0000-0000 X. Xxxx
Xxxxxx, in the City of Fullerton, County of Orange, State of California, more
particularly described in Schedule 1 to the "Deed" (as hereinafter defined)
attached hereto as Exhibit A and consisting of approximately 6.86 acres (the
"Land");
(b) all rights, privileges and easements appurtenant to the Land,
including, without limitation, all minerals, oil, gas and other hydrocarbon
substances, as well as all development rights, land use entitlements, building
permits, licenses, permits and certificates, utilities commitments, air rights,
water, water rights, riparian rights, and water stock relating to the Land, and
any rights-of-way or other appurtenances used in connection with the beneficial
use and enjoyment of the Land and all of Seller's right, title and interest in
and to all roads, easements, rights of way and alleys adjoining or servicing the
Land (collectively, the "Appurtenances");
(c) all improvements and fixtures located on the Land and
Appurtenances, including, without limitation, the building(s) located on the
Land, consisting of eight (8) separate industrial buildings containing
approximately 110,900 rentable square feet, and all apparatus, equipment and
appliances used in connection with the operation or occupancy of the Land and
Appurtenances, and along with all on-site parking (collectively, the
"Improvements", and together with the Land and Appurtenances, the "Real
Property");
(d) all tangible personal property owned by Seller located on or
in or used in connection with the Real Property as of the date hereof and as of
the "Closing Date" (as hereinafter defined) (collectively, the "Tangible
Personal Property"); and
(e) all lease rights (including, without limitation, the lessor's
interest in and to all tenant leases, rental agreements, subleases and
tenancies, including all amendments, modifications, agreements, records,
substantive correspondence, and other documents affecting in any way a right to
occupy any portion of the Real Property (individually and collectively, the
"Leases"), and Seller's interest in all security deposits and prepaid rent, if
any, under the Leases and any and all guaranties of the Leases, and, to the
extent approved by Buyer pursuant to this Agreement, all "Service Contracts" (as
hereinafter defined), and any intangible personal property now or hereafter
owned by Seller and used in the ownership, use or operation or development of
the Real Property, and Tangible Personal Property, including, without
limitation, the right to use the name "Fullerton Business Center" and any other
trade name now used in connection with the Real Property (collectively, the
"Intangible Property", and together with the Tangible Personal Property, the
"Personal Property").
All of the items referred to in Subparagraphs (a), (b), (c), (d), (e)
and (f) above are collectively referred to herein as the "Property".
2
2. Purchase Price.
(a) The purchase price of the Property is $5,500,000 (the
Purchase Price").
(b) The Purchase Price shall be paid through "Escrow" (as herein-
after defined) as follows:
(i) Concurrently with the execution and delivery of this
Agreement by Buyer, Seller and Fidelity National Title Insurance Company (the
"Escrow Holder") an escrow in connection herewith (the "Escrow"), shall be
opened at the Escrow Holder. Within three (3) business days of the opening of
Escrow, Buyer shall deposit into Escrow cash in the amount of $50,000 (the
"Deposit"). The Deposit shall be held by Escrow Holder in an interest-bearing
account.
(ii) The Deposit and all interest accrued thereon shall
either (1) be released to Seller and applied towards the Purchase Price at the
"Closing" (as hereinafter defined); (2) be returned to the Buyer if the Closing
fails to occur for any reason other than the Buyer's default; or (3) be
disbursed to Seller as liquidated damages in the event of Buyer's default
pursuant to the provisions of Paragraph 7 below. Interest earned on the Deposit
shall follow and become a part of the Deposit in all events be paid to or for
the account of Buyer.
(iii) On or before the Closing, if this Agreement has not
been earlier terminated, Buyer shall deposit into Escrow cash or other
immediately available funds in the amount of the balance of the Purchase Price,
adjusted for the prorations and any other adjustments provided elsewhere in this
Agreement (the "Closing Amount").
3. Title to the Property.
(a) At the Closing, Seller shall convey to Buyer fee simple title
to the Real Property and Improvements, by a duly executed and acknowledged grant
deed substantially in the form attached hereto as Exhibit A (the "Deed"). A
condition to Buyer's obligations under this Agreement shall be the issuance by
Fidelity National Title Insurance Company (the "Title Company") to Buyer of an
ALTA extended coverage Owner's Policy of Title Insurance (Form B, rev. 10/17/70
with Endorsement Form 1 coverage) in the amount of the Purchase Price, insuring
fee simple title to the Real Property and Improvements in Buyer, subject only to
such exceptions as Buyer shall have approved pursuant to Paragraph 4 below (the
"Approved Title Exceptions") and without boundary, encroachment or survey
exceptions (the "Title Policy"). The Title Policy shall provide full coverage
against mechanics' and materialmen's liens and shall contain, to the extent
required by Buyer, the CLTA 100 (modified for an owner), 101.4, 103.7, 116,
116.1, 116.4, 116.7 and such other special endorsements as Buyer may reasonably
require upon completion of review of the preliminary title report, including,
without limitation, any endorsements required as a condition to Buyer's approval
of any title exceptions pursuant to Paragraph 4 below (the "Endorsements").
(b) At the Closing (i) Seller shall transfer title to the
Tangible Personal Property by xxxx of sale in the form attached hereto as
Exhibit B (the "Xxxx of Sale"); (ii) Seller shall transfer title to the
Intangible Property, the "Assigned Contracts" (as hereinafter defined) and the
"Permits" (as hereinafter defined) by assignment of intangible property in the
form attached hereto as Exhibit C (the "Assignment of Intangibles"); and (iii)
Seller shall transfer title to the Leases by assignment of Leases in the form
attached hereto as Exhibit D (the "Assignment of Leases"), such title in each
case to be free of any liens, encumbrances or interests.
(c) Anything contained herein to the contrary notwithstanding and
notwithstanding any approval or consent given by Buyer hereunder, except for
real estate taxes not yet due or payable, Seller shall cause all mortgages,
deeds of trust and other monetary encumbrances, including without limitation all
mechanics' liens, to be released and reconveyed from the Property on or prior to
-2-
3
the Closing and shall cause the Title Company to insure title to the Property as
vested in Buyer without any exception for such matters.
4. Due Diligence.
(a) As used herein, the term "Due Diligence Period" shall refer
to a period of time to expire at 5:00 p.m. on December 11, 1997.
(b) Buyer may elect, by written notice to Seller at any time
prior to the expiration of the Due Diligence Period, to terminate this
Agreement, which election shall be in Buyer's sole and absolute discretion. If
Buyer desires to proceed with the purchase of the Property subject to the
remaining conditions set forth in this Agreement (including, without limitation,
pursuant to Paragraph 6 below), then on or before the expiration of the Due
Diligence Period, Buyer shall deliver written notice to Seller of such election
to proceed (the "Buyer's Notice to Proceed"), electing to waive Buyer's right of
termination pursuant to this Paragraph 4(b) and proceed with the Closing
subject to the remaining conditions set forth in this Agreement; provided,
however, that, notwithstanding any such election to proceed, Seller must comply
with all of Seller's other obligations and duties under this Agreement. Buyer's
Notice to Proceed shall specify in writing the requirements for the Title Policy
(including, without limitation, the Approved Title Exceptions and any required
Endorsements). If Buyer fails to deliver Buyer's Notice to Proceed to Seller
prior to the expiration of the Due Diligence Period electing to waive Buyer's
right of termination pursuant to this Paragraph 4(b), then Buyer shall be
deemed to have elected to terminate this Agreement.
(c) In the event of the termination of this Agreement pursuant to
this Paragraph 4, the Deposit shall be returned to Buyer and neither party shall
have any further obligations to the other hereunder (except under provisions of
this Agreement which specifically state that they survive termination).
(d) 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 provided herein. Such expenditures of time and
resources and possible loss of opportunity by Buyer constitute adequate
consideration for Seller's remaining bound by this Agreement notwithstanding
such termination rights in Buyer.
5. Seller's Deliveries. To the extent the following materials are in
the Seller's possession or control, Seller shall deliver or cause to be
delivered to Buyer (collectively, the "Due Diligence Materials") at Seller's
sole cost and expense:
(a) Surveys. Any existing surveys of the Property.
(b) Tax Bills. Copies of the most recent property tax bills and
assessments for the Property.
(c) Warranties. All presently effective warranties or guaranties
from any contractors, subcontractors, suppliers, servicemen or materialmen in
connection with any of the Tangible Personal Property or any construction,
renovation, repairs or alterations of the Improvements or any tenant
improvements (collectively, the "Warranties").
(d) Service Contracts. A schedule (the "Schedule of Agreements")
setting forth a list of all of the service contracts, utility contracts,
maintenance contracts, management contracts, leasing contracts, equipment
leases, brokerage and leasing commission agreements and other agreements or
rights related to the ownership, use or operation of the Property (collectively,
the "Service Contracts"). From this Schedule of Agreements, Buyer shall
designate those contracts that Seller shall assign to Buyer and that Buyer shall
assume as of Closing (such designated Service Contracts together with the
Warranties are collectively referred to herein as the "Assigned Contracts").
-3-
4
(e) Plans. Copies of all as-built plans and specifications for
the Improvements, including without limitation the plans and specifications for
and a complete description of all existing renovations and improvements to the
Real Property and all rentable space therein, and as-built drawings for all
underground utilities.
(f) Reports. All reports in Seller's possession or control
relating to the Property, including environmental reports, environmental audits,
soils reports, site plans, engineering reports and plans, landscape plans,
structural calculations, floor plans, construction contracts, a current
inspection report by a licensed Structural Pest Control Operator, and other
reports or documents of significance to the Property.
(g) Inventory. A complete inventory of all Tangible personal
Property used at or in connection with the Property.
(h) Operating Statements. All income and expense statements,
year-end financial and monthly operating statements and year to date statements
for the two (2) most recent calendar years prior to Closing and, to the extent
available, the current year, all of which shall be certified by Seller's
Property Manager, as true and correct and an accurate representation of the
financial condition of the Property.
(i) Budget. A copy of the budget for the Property for the current
year.
(j) Rent Roll. A current rent roll certified by Seller to be
accurate and complete, listing for each tenant (i) the tenant's name, and
location of leased premises, (ii) the commencement and expiration dates of each
lease, (iii) rent and rent escalation clauses, if any, (iv) the date on which
rent is payable, (v) the last date on which rent has been paid, (vi) the amount
of any security deposit, prepaid rent, and whether landlord is obligated to pay
interest on the same, (vii) any extension options, any options to terminate or
lease additional space and any rights of first refusal, and the business terms
of the foregoing, and (viii) a description of any uncured defaults (the "Rent
Roll").
(k) Leases. All (i) copies of existing and pending Leases, lease
files and tenant correspondence; (ii) copies of tenant financial statements;
(iii) a schedule of leasing commissions on a space by space basis; and (iv) a
copy of the current standard lease form.
(1) Permits. To the extent that the following are in the Seller's
possession or control, all governmental permits and approvals relating to the
construction, operation, use or occupancy of the Property, including without
limitation, all building permits, certificates of completion, certificates of
occupancy, environmental permits and licenses (including, without limitation,
permits relating to the existence or removal of underground storage tanks), and
sign permits (individually and collectively "Permits").
(m) Deposits. A list of all deposits and bonds posted by Seller
with utility providers, sureties, governmental agencies or others in connection
with the Property (the "Seller Deposits and Bonds").
6. Conditions Precedent to Closing.
(a) Buyer's conditions. The following are conditions precedent to
Buyer's obligations under this Agreement (the "Buyer Conditions Precedent").
The Buyer Conditions Precedent are intended solely for the benefit of Buyer and
may be waived only by Buyer in writing. In the event any Buyer Condition
Precedent is not satisfied, Buyer may, in its sole and absolute discretion,
terminate this Agreement, and, subject to the provisions of Paragraph 7, all
obligations of Buyer and Seller hereunder (except provisions of this Agreement
which recite that they survive termination) shall terminate and be of no
further force or effect.
-4-
5
(i) Buyer's inspection, review and approval, within the Due
Diligence Period, of all aspects of the Property.
(ii) The issuance by the Title Company to Buyer of the Title
Policy subject only to the Approved Title Exceptions and including the
Endorsements.
(iii) All of Seller's representations and warranties
contained in or made pursuant to this Agreement shall have been true and correct
when made and shall be true and correct as of the Closing Date.
(iv) Seller shall have fully complied with all of Seller's
duties and obligations contained in this Agreement.
(v) As of the Closing Date, there shall be no litigation or
administrative agency or other governmental proceeding pending or threatened,
which after Closing would, materially adversely affect the value of the Property
or the ability of Buyer to operate the Property in the manner in which it is
currently being operated, and no proceedings shall be pending or threatened
which would cause the redesignation or other modification of the zoning
classification of, or of any building or environmental code requirements
applicable to, any of the Property.
(vi) Seller shall have provided Buyer with an updated Rent
Roll three (3) business days prior to Closing, which updated Rent Roll must not
indicate any material adverse change from the Rent Roll last approved by Buyer.
Seller shall specifically identify any changes from the most recently approved
Rent Roll, and Buyer shall have performed a closing audit which confirms the
updated Rent Roll.
(vii) Prior to Closing, Buyer shall provide Seller a list of
Service Contracts that Buyer wishes to make Assigned Contracts. Within 30 days
of receiving said list, Seller shall terminate, at no cost or expense to Buyer,
any and all Service Contracts affecting the Property that are not Assigned
Contracts.
(viii) There shall have been no material adverse change in
or addition to the information or items reviewed and approved by Buyer during
the Due Diligence Period.
(ix) Buyer's review and approval of estoppel certificates
covering all rentable space within the Property. Seller shall use reasonable
efforts to obtain and deliver to Buyer by no later than December 10, 1997,
tenant estoppel certificates in form and substance satisfactory to Buyer
representing no less than seventy-five percent (75%) of the rentable square
footage of space occupied by tenants (collectively, "Tenants"), provided,
however, Seller shall include in the 75% requirement, any Tenant who
independently leases five thousand (5000) or more rentable square feet of the
Property. Certificates substantially in the form attached hereto as Exhibit E
(as modified to address specific reasonable concerns arising as a result of
Buyer's review of the Leases) shall be deemed acceptable to Buyer. For any
Tenant that Seller is not able to deliver a Tenant estoppel certificate, Seller
shall deliver to Buyer a landlord's estoppel certificate covering the
information which would otherwise have been included in the Tenant's estoppel
certificate; provided, however, that Buyer shall not be obligated to accept or
approve any estoppel provided by Seller if Buyer has reason to believe any
statement contained therein would be disputed or denied by the applicable
Tenant; and provided further that Buyer shall not be obligated to accept or
approve estoppels provided by Seller representing more than 25% of the rentable
square footage of space occupied by Tenants, or representing a Tenant who leases
5000 or more rentable square feet. Said certificates shall be delivered at least
five (5) days prior to the Closing and shall be dated no earlier than fifteen
(15) days prior to the Closing Date.
-5-
6
(x) Except as set forth in the Leases, as of the Closing
Date, there be no free rent, abatements or other unexpired concessions that
apply to any period after Closing;
(xi) Buyer's receipt of a Certificate from the California
Secretary of State indicating that, as of the Closing Date, there are no filings
against Seller under the California Uniform Commercial Code which would be a
lien on any of the Personal Property (other than any filings as to which Buyer
is given satisfactory evidence that such filings are being released as of the
Closing);
(xii) if any agreement for leasing commissions and/or
locator fees payable on any Lease shows a commission or locator fee which would
be due or payable after the Closing Date, an executed release from the broker or
finder releasing Buyer and its successors and assigns from any obligation to pay
such commission or locator fee and agreeing to look solely to Seller for
payment;
(xiii) notwithstanding anything to the contrary contained in
this Agreement, Buyer's obligation to purchase the Property is conditioned upon
the approval by Buyer's Executive Committee during the Due Diligence Period of
the transactions contemplated by this Agreement.
(b) Seller's Conditions. The following are conditions precedent
to Seller's obligations under this Agreement (the "Seller Conditions
Precedent"). The Seller Conditions Precedent are intended solely for the benefit
of Seller and may be waived only by Seller in writing. In the event any Seller
Condition Precedent is not satisfied, Seller may, in its sole and absolute
discretion, terminate this Agreement, and, subject to the provisions of
Paragraph 7, all obligations of Buyer and Seller hereunder (except provisions of
this Agreement which recite that they survive termination) shall terminate and
be of no further force or effect.
(i) All of Buyer's representations and warranties contained in or
made pursuant to this Agreement shall have been true and correct when made and
shall be true and correct as of the Closing Date.
(ii) Buyer shall have fully complied with all of Buyer's duties
and obligations contained in this Agreement.
7. REMEDIES. IN THE EVENT THE SALE OF THE PROPERTY IS NOT CONSUMMATED
BECAUSE OF THE FAILURE OF ANY CONDITION OR ANY OTHER REASON EXCEPT A DEFAULT
UNDER THIS AGREEMENT SOLELY ON THE PART OF BUYER, THE DEPOSIT SHALL IMMEDIATELY
BE RETURNED TO BUYER. IF SAID SALE IS NOT CONSUMMATED SOLELY BECAUSE OF A
DEFAULT UNDER THIS AGREEMENT ON THE PART OF BUYER, THE DEPOSIT SHALL BE PAID TO
AND RETAINED BY SELLER AS LIQUIDATED DAMAGES. THE PARTIES HAVE AGREED THAT
SELLER'S ACTUAL DAMAGES, IN THE EVENT OF A DEFAULT BY BUYER, WOULD BE EXTREMELY
DIFFICULT OR IMPRACTICABLE TO DETERMINE. THEREFORE, BY PLACING THEIR INITIALS
BELOW, THE PARTIES ACKNOWLEDGE THAT THE DEPOSIT HAS BEEN AGREED UPON, AFTER
NEGOTIATION, AS THE PARTIES' REASONABLE ESTIMATE OF SELLER'S DAMAGES AND AS
SELLER'S SOLE AND EXCLUSIVE REMEDY AGAINST BUYER, AT LAW OR IN EQUITY, IN THE
EVENT OF A DEFAULT UNDER THIS AGREEMENT ON THE PART OF BUYER. SELLER HEREBY
WAIVES ANY AND ALL BENEFITS IT MAY HAVE UNDER CALIFORNIA CIVIL CODE SECTION
3389.
INITIALS: Seller Buyer [SIG]
---------- ----------
8. Escrow; Closing.
(a) Escrow Instructions. Upon mutual execution of this Agreement,
the parties hereto shall deposit an executed counterpart of this Agreement with
Escrow Holder and this Agreement shall serve as instructions to Escrow Holder
for consummation of the purchase and sale contemplated hereby. Seller and Buyer
shall execute such supplemental Escrow instructions as may be appropriate to
enable Escrow Holder to comply with the terms of this Agreement, provided such
supplemental Escrow instructions are not in conflict with this Agreement as it
may be amended in writing from time to time. In the event of any conflict
-6-
7
between the provisions of this Agreement and any supplementary Escrow
instructions signed by Buyer and Seller, the terms of this Agreement shall
control.
(b) Closing. The recordation of the Deed and the delivery of the
other documents and funds contemplated hereby (the "Closing") shall take place
on December 16, 1997, or at an earlier date agreed upon by Buyer and Seller. The
date on which the Closing occurs is herein referred to as the "Closing Date".
Buyer may elect, by written notice to Seller at any time prior to December 16,
1997, to extend the Closing Date by up to two (2) business days. In the event
the Closing does not occur on or before December 18, 1997, Escrow Holder shall,
unless it is notified by both parties to the contrary within five (5) days after
such date, return to the depositor thereof items which were deposited hereunder,
except for the Deposit, which shall be dealt with pursuant to section 2(b)(ii).
Any such return shall not, however, relieve either party of any liability it may
have for its wrongful failure to Close.
(c) Seller Deliveries. At or before the Closing, Seller shall
deliver to Escrow Holder or Buyer the following:
(i) the duly executed and acknowledged Deed;
(ii) the duly executed Xxxx of Sale;
(iii) originals of the Assigned Contracts and duly executed
Assignment of Intangibles, together with evidence of termination of any Service
Contracts and Other Agreements that are not Assigned Contracts;
(iv) originals of all Leases and tenant files and the duly
executed and acknowledged Assignment of Leases;
(v) duly executed Tenant Estoppel Certificates and, if
applicable, Seller estoppel certificates;
(vi) notices to the Tenants of the occurrence of the sale of
the Property in the form attached hereto as Exhibit F;
(vii) a duly executed affidavit that Seller is not a
"foreign person" within the meaning of Section 1445(e)(3) of the Internal
Revenue Code of 1986 in the form attached hereto as Exhibit G together with a
duly executed California Franchise Tax Board Form 590;
(viii) a closing statement in form and content satisfactory
to Buyer and Seller (the "Closing Statement") duly executed by Seller;
(ix) originals of the building permits and certificates of
occupancy for the Improvements and all tenant-occupied space included within the
Improvements;
(x) all keys to the Property;
(xi) a full release and reconveyance of all monetary
encumbrances affecting the Property and any mechanics' liens;
(xii) any other documents or agreements required by the
Title Company to issue the Title Policy in the form required by this Agreement;
(xiii) any other instruments, records or correspondence
called for hereunder to be delivered by Seller which have not previously been
delivered.
Buyer may waive compliance on Seller's part under any of the foregoing items by
an instrument in writing.
(d) Buyer Deliveries. At or before the Closing, Buyer shall deliver to
Escrow Holder or Seller the following:
-7-
8
(i) the duly executed Assignment of Leases;
(ii) the duly executed Assignment of Intangibles;
(iii) the Closing Statement, duly executed by Buyer;
(iv) the Closing Amount; and
(v) any other instruments, records or correspondence
called for hereunder to be delivered by Buyer which have not previously been
delivered.
Seller may waive compliance on Buyer's part under any of the foregoing items by
an instrument in writing.
(e) Additional Documents. Seller and Buyer shall each deposit
such other instruments as are reasonably required by Escrow Holder or the Title
Company or otherwise required to close the escrow and consummate the purchase of
the Property in accordance with the terms hereof.
(f) Prorations. The following are to be apportioned as of the
Closing Date, with Buyer receiving credit for or charged with the entire day of
the Closing, as follows:
(i) Rent. Rent under the Leases shall be apportioned as of
the Closing Date. With respect to any rent arrearages existing at the Closing,
after Closing Buyer shall pay to Seller any rent actually collected which is
applicable to the period preceding the Closing Date; provided, however, that all
rent collected by Buyer shall be applied first to all unpaid rent accruing after
the Closing Date, and then to unpaid rent accruing prior to the Closing Date.
Buyer shall take reasonable steps to recover any rent arrearages; provided,
however, that Buyer shall have no obligation to commence any legal or equitable
proceedings to recover rent arrearages, and provided further that Buyer shall
not incur any, and Seller shall indemnify Buyer against all, cost, expense or
liability in connection with Buyer's reasonable efforts to recover rent
arrearages. Seller shall be permitted to pursue collection of any rent
arrearages applicable to the period prior to the Closing, provided that Buyer
shall not incur any, and Seller shall indemnify Buyer against all, cost, expense
or liability in connection therewith, and provided further 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.
(ii) Leasing Costs; Free Rent. Seller shall pay prior to
Closing all leasing commission and tenant improvement costs or allowances due or
payable at or prior to Closing, if any, in connection with any Lease executed on
or before the Closing that are or will become due and payable as of the Closing.
Buyer shall be entitled to a credit against the Purchase Price for any such
unpaid commissions, costs or allowances due after the Closing but incurred in
connection with any lease executed on or before the Closing, and for any free
rent, rent abatements or other unexpired concessions that apply to any period
after Closing; provided, however, Buyer shall accept and receive no credit for
free rent provisions contained in the lease of Xxxxxxx Wholesale Electric
Company, tenant of Suite 101 at 0000 X. Xxxx Xxxxxx, to the extent that such
free rent provision (s) do not exceed the amount of $4050.00 per month, and
shall apply only to the months of January and February, 1998.
(iii) Security Deposits. Buyer shall be entitled to a
credit against the Purchase Price for the total sum of all security and other
deposits provided for in the Leases, and any interest earned thereon which by
law or the terms of the Leases could be required to be refunded to tenants.
(iv) Utility Charges. Seller shall cause all the utility
meters to be read on the Closing Date, and will be responsible for the cost of
-8-
9
all utilities used prior to the Closing Date, except to the extent such utility
charges are billed to and paid by tenants directly.
(v) Real Estate Taxes and Special Assessments. Seller shall
pay prior to Closing any and all delinquent real estate taxes and assessments
with respect to the Property. General real estate taxes and assessments payable
for the fiscal year in which the Closing occurs shall be prorated as of the
Closing Date.
(vi) Seller Deposits and Bonds. At Buyer's election, Seller
shall either receive credit for Seller Deposits and Bonds, in which case all
such Seller Deposits and Bonds for which Seller receives credit shall remain in
place for the benefit of the Buyer and Seller shall execute and deliver such
documents as shall be necessary to assign such Seller Deposits and Bonds to
Buyer and Seller shall execute and deliver such documentation as shall be
necessary to assign such Seller and Bonds to Buyer, or not receive credit for
Seller Deposits and Bonds, in which case Seller may obtain a return or refund of
any Seller Deposits and Bonds for which Seller does not receive credit, but only
after the Closing.
(vii) Other Apportionments. Amounts payable under the
Assigned Contracts, annual or periodic permit and/or inspection fees (calculated
on the basis of the period covered), and liability for other Property operation
and maintenance expenses and other recurring costs shall be apportioned as of
the Closing Date.
(viii) Preliminary Closing Statement. 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 Escrow Holder prior to Closing.
(ix) Post-Closing Reconciliation. If any of the aforesaid
prorations cannot be definitely calculated on the Closing Date, then they shall
be estimated at the Closing and definitely calculated as soon after the Closing
Date as feasible. As soon as the necessary information is available, Buyer shall
conduct a post-Closing audit to determine the accuracy of all prorations made to
the Purchase Price (the "Post-Closing Audit"). Either party owing the other
party a sum of money based on such subsequent proration(s) or the Post-Closing
Audit shall promptly pay said sum to the other party, together with interest
thereon at the rate of two percent over the "prime rate" (as announced from time
to time in the Wall Street Journal) per annum from the Closing Date to the date
of payment if payment is not made within ten (10) days after delivery of a xxxx
therefor.
(g) Closing-costs. Seller shall pay for the portion of the
premium for the Title Policy equal to the premium that would be charged for a
CLTA Policy, any sales taxes, any transfer taxes applicable to the sale and
recording fees for recording of the Deed. In addition, Seller shall be liable
for any prepayment fee or other charge payable in connection with any payoff of
monetary encumbrances. Buyer shall pay the portion of the premium for the Title
Policy not paid by Seller and for any Endorsements. Buyer shall also pay the
cost of any survey Buyer elects to have performed. Any escrow fees shall be paid
fifty percent (50%) by Buyer and fifty percent (50%) by Seller. All other costs
and charges of the Escrow not otherwise provided for in this Agreement shall be
allocated in accordance with the closing customs for the County where the
Property is located. Buyer and Seller shall each be responsible for their
respective legal fees to negotiate and execute this Agreement.
(h) Reporting Requirements. The Escrow Holder shall comply with
all applicable federal, state and local reporting and withholding requirements
relating to the close of the transactions contemplated herein. Without limiting
the generality of the foregoing, to the extent the transactions contemplated by
this Agreement involve a real estate transaction within the purview of Section
6045 of the Internal Revenue Code of 1986, as amended (the "Internal Revenue
Code"), Escrow Holder shall have sole responsibility to comply with the
-9-
10
requirements of Section 6045 of the Internal Revenue Code (and any similar
requirements imposed by state or local law). For purposes hereof, Seller's tax
identification number is 00-0000000. Escrow Holder shall hold Buyer, seller and
their counsel free and harmless from and against any and all liability, claims"
demands, damages and costs, including reasonable attorney's fees and other
litigation expenses, arising or resulting from the failure or refusal of Escrow
Holder to comply with such reporting requirements.
9. Representations, Warranties and Covenants of Seller. As used in this
Agreement, the phrase "Seller's knowledge" (or words of similar import) means
the actual knowledge of any of Xxxxxxx X. Xxxxx, Xxxxxx X. Xxxxx or Xxxx
Xxxxxxxx. As of the date hereof and again as of Closing, Seller represents and
warrants to, and covenants with, Buyer as follows:
(a) To Seller's knowledge, (i) there are no material physical or
mechanical defects in, or shortage or deficiency in utilities supplied to, the
Property, (ii) the Property and its current use and operation are in compliance
with applicable laws, rules, permits and regulations as well as private
covenants, conditions and restrictions, (iii) all licenses, permits, variances,
easements and approvals, including without limitation final certificates of
occupancy (or the equivalent) necessary for the current use, operation and
occupancy of the Property have been issued and are in effect, and (iv) the
Property is not dependent on any other property for compliance with zoning or
other land use regulations.
(b) To Seller's knowledge, all documents delivered by Seller to
Buyer, or made available to Buyer for review, including without limitation the
Due Diligence Materials, are true and complete copies of all documents related
to the Property in Seller's possession or control. With the exception of
insurance policies related to the Property, all of Seller's books, files and
records related to the Property were delivered to or made available to Buyer for
Buyer's review.
(c) To Seller's knowledge, there are no (i) condemnation,
environmental, zoning or other land-use proceedings, instituted or to Seller's
knowledge threatened against the Property, (ii) special assessment proceedings
affecting the Property, or (iii) existing or proposed easements, covenants,
restrictions, agreements or other documents which affect title to the Property
and which are not reflected on title.
(d) To Seller's knowledge, there are no litigation, arbitration
or reference proceedings pending or threatened against the Property or against
Seller with respect to the Property.
(e) On the Closing Date there will be no outstanding written or
oral contracts made for any improvements to the Property, or for offsite
improvements related to the Property, which have not been fully completed and
paid for. Seller shall cause to be discharged all mechanics' and materialmen's
liens arising from any labor or materials furnished to the Property prior to the
Close of Escrow.
(f) To Seller's knowledge, except as disclosed by that certain
environmental report dated September 4, 1997, completed by Remediation
Technology Inc., Retet Project No. CO.CAR.03903, and disclosed and turned over
to Buyer, and any environmental report with respect to the Property obtained by
the Buyer and disclosed to Seller, (i) no hazardous or toxic substance, waste or
material (including without limitation PCB's, petroleum, petroleum products and
fractions thereof) has existed or currently exists in, on or under, or has been
or is being disposed of or released from, the Property or any property adjacent
to the Property except in compliance with applicable laws, orders, rules and
regulations; and (ii) no underground storage tanks (whether existing or
abandoned) exist or have existed on or under the Property or on or under any
property adjacent to the Property.
-10-
11
(g) Neither Seller nor, to Seller's knowledge, 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.
(h) The Rent Roll attached hereto as Exhibit H is complete and
accurate as of the date of this Agreement. The most current Rent Roll provided
to Buyer is complete and accurate as of the date provided. To Seller's
knowledge, except as disclosed on Exhibit I, attached hereto, there are no
unpaid leasing costs or obligations, including, without limitation, broker's
commissions and costs in connection with tenant improvements. Seller has
provided to Buyer complete and accurate copies of all Leases.
(i) To Seller's knowledge, there exists no defaults or events
which, with the giving of notice or passage of time, or both, would constitute a
default by Seller or any of the tenants under any of the Leases.
(j) To Seller's knowledge, the Operating Statements certified by
Seller's Property Manager pursuant to paragraph 5 (h) of this Agreement, are
true and correct and an accurate representation of the financial condition of
the Property.
(k) The Schedule of Agreements is a complete and accurate list of
all Service Contracts. Seller has provided to Buyer complete and accurate copies
of all Service Contracts. To Seller's knowledge, there exists no defaults or
events which, with the giving of notice or passage of time, or both, would
constitute a default by Seller or any of the other parties to the Service
Contracts under the Service Contracts.
(1) The list of Seller Deposits and Bonds provided to Buyer is a
complete and accurate list of all such items. To Seller's knowledge, there
exists no defaults or events which, with the giving of notice or passage of
time, or both, would constitute under such items.
(m) Seller has (i) completed all obligations with respect to any
remodeling, renovating and tenant improvements to be completed by Seller as
landlord under the Leases; and (ii) paid all obligations of the landlord
pursuant to the Leases, including, without limitation, tenant improvement,
remodeling and refurbishment costs, leasing commissions and other concessions.
(n) Seller is a limited partnership, duly organized and validly
existing and in good standing under the laws of the State of California and
qualified to do business in the State of California; this Agreement and all
documents executed by Seller and delivered to Buyer pursuant to this Agreement
are and will be duly authorized, executed and delivered by Seller, are and will
be legal, valid and binding obligations of Seller enforceable against Seller in
accordance with their respective terms, and do not and will not violate any
provision of any agreement or judicial order to which Seller or the Property is
subject. Seller has obtained all necessary authorizations, approvals and
consents to the execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby.
(0) Seller is not a "foreign person" within the meaning of
Internal Revenue Code Section 1445(f)(3).
(p) Seller has not granted any option or right of first refusal
or first opportunity to any party to acquire any interest in any of the
Property.
(q) All statements contained in any certificate delivered at any
time by Seller or its agents in conjunction with the transactions contemplated
hereby shall constitute representations and warranties hereunder.
10. Representations and Warranties of Buyer. Buyer hereby represents and
warrants to Seller as follows: Buyer is a corporation duly organized and validly
existing and in good standing under the laws of the State of Maryland and
qualified to do business in the State of California; this Agreement and all
docu-
-11-
12
ments executed by Buyer pursuant to this Agreement are or will be duly
authorized, executed and delivered by Buyer, and are or will be legal, valid and
binding obligations of Buyer, and do not and will not violate any provisions of
any agreement or judicial order to which Buyer is subject.
11. Continuation and Survival. All representations, warranties and
covenants by the respective parties contained herein or made in writing pursuant
to this Agreement are intended to and shall be deemed made as of the date of
this Agreement or such writing and again at the Closing, shall be deemed to be
material, and unless expressly provided to the contrary shall survive the
execution and delivery of this Agreement, the Deed and the Closing.
Notwithstanding the immediately preceding sentence, the representations and
warranties of Seller shall only survive for a period of three (3) years after
the Closing (the "Survival Period") , except in the case of fraud or willful
misrepresentation, in which case such representations and warranties shall
survive independent of this limitation; provided, however that for matters as
to which Buyer has given Seller written notice within the Survival Period, the
representation and warranties of Seller that are related to the matters in such
written notice shall survive until all liabilities arising out of the matters
described in such written notice have been satisfied.
12. Casualty or Condemnation.
(a) In the event any of the Property is damaged and/or destroyed
by fire or other casualty prior to the Closing Date, and the cost to repair
and/or restore such damage and/or destruction (which cost, for purposes of this
paragraph, shall be deemed to include reasonably anticipated post-Closing rental
loss through to completion of such repair and/or restoration) exceeds One
Hundred Thousand Dollars ($100,000), then Buyer shall have the right to
terminate this Agreement by written notice to Seller within ten (10) business
days after Buyer's first learning of the occurrence of such casualty and the
cost of such repair and/or restoration. In the event of any such termination,
the Deposit shall be returned to Buyer, Buyer and Seller shall each be liable
for one-half of any escrow fees or charges, and neither party shall have any
further liability or obligation under this Agreement.
(b) In the event any of the Property is damaged and/or destroyed
by fire or other casualty prior to the Closing Date where (i) the cost to repair
and/or restore such damage and/or destruction does not exceed One Hundred
Thousand Dollars ($100,000.00) , or (ii) the cost to repair and/or restore such
damage and/or destruction exceeds One Hundred Thousand Dollars ($100,000.00) but
this Agreement is not terminated pursuant to (a) above as a result thereof, then
the Closing Date shall occur as scheduled notwithstanding such damage; provided,
however, that Seller's interest in all proceeds of insurance payable by reason
of such casualty shall be assigned to Buyer as of the Closing Date or credited
to Buyer if previously received by Seller, and Buyer shall receive a credit
toward the Purchase Price for any cost of repair not covered by such insurance
(whether by reason of insurance deductible, co-insurance, uninsured casualty or
otherwise).
(c) In the event a governmental entity commences eminent domain
proceedings to take any material (in Buyer's reasonable discretion) portion of
the Property after the date hereof and prior to the Closing Date, then Buyer
shall have the option to terminate this Agreement by written notice to Seller
within ten (10) business days after Buyer first learns of such commencement. In
the event of any such termination, the Deposit shall be returned to Buyer, Buyer
and Seller shall each be liable for one-half of any escrow fees or charges, and
neither party shall have any further liability or obligation under this
Agreement.
(d) In the event a governmental entity commences eminent domain
proceedings to take any part of the Property after the date hereof and prior to
the Closing Date and this Agreement is not terminated pursuant to (c) above as a
result thereof, then the Closing Date shall occur as scheduled notwithstanding
such proceeding; provided, however, that Seller's interest in all awards
arising
-12-
13
out of such proceedings shall be assigned to Buyer as of the Closing Date or
credited to Buyer if previously received by Seller.
13. Possession. Possession of the Property shall be delivered by Seller
to Buyer on the Closing Date, provided, however, that prior to the Closing Date
Seller shall afford authorized representatives of Buyer access to the Property
(during normal business hours and subject to the rights of the current tenants)
for purposes of satisfying Buyer with respect to the representations, warranties
and covenants of Seller contained herein and with respect to satisfaction of any
Buyer Condition Precedent to the Closing contained herein, including without
limitation an environmental investigation. Buyer hereby agrees to indemnify and
hold Seller harmless from any damage or injury to persons or property caused by
Buyer or its authorized representatives during their entry and investigations
prior to Closing.
14. Maintenance of the Property and Property Personnel. Between Seller's
execution of this Agreement and the Closing, Seller shall maintain the Property
in good order, condition and repair, reasonable wear and tear excepted, shall
perform all work required to be performed by the landlord under the terms of any
Lease, and shall make all repairs, maintenance and replacements of the
Improvements and any Tangible Personal Property and otherwise operate the
Property in the same manner as before the making of this Agreement, as if Seller
were retaining the Property. After full execution of this Agreement and until
the Closing, Seller shall maintain all existing personnel on the Property in
their current employment positions at not less than their current rate of
compensation. Without limiting the effectiveness of the foregoing provisions or
the other provisions of this Agreement with respect to such Service Contracts,
in the event of the Closing of the purchase of the Property, Buyer shall not
retain the existing employees and management agents of Seller for the Property,
and, accordingly, on the Closing, Seller shall (i) cause all employment and
management agreements respecting the Property to be terminated, and deliver
evidence of such termination to Buyer, and (ii) remove all employees and
management personnel from the Property.
15. Leasing; Buyer's Consent to New Contracts Affecting the Property;
Termination of Existing Contracts. Seller shall use, or cause the Property's
manager to use, commercially reasonable efforts until Closing to lease any
vacant space, or space becoming vacant, in the Real Property to creditworthy
tenants at current market rents and terms. Seller shall not, after the date of
this Agreement, enter into any lease or contract affecting the Property, or any
amendment thereof, or permit any tenant to enter into any sublease, assignment
or agreement pertaining to the Property (except as expressly authorized by such
tenant's Lease), or waive, compromise or settle any rights of Seller under any
contract or Lease, or agree to return any security deposit, or modify, amend, or
terminate any Assigned Contract, without in each case obtaining Buyer's prior
written consent thereto. Seller shall terminate prior to the Closing, at no cost
or expense to Buyer, any and all Service Contracts that are not Assigned
Contracts.
16. Insurance. Through the Closing Date, Seller shall maintain or cause
to be maintained, at Seller's sole cost and expense- and each in the amount and
form maintained by Seller prior to the date of this Agreement:
(a) a policy or policies of insurance (subject only to
commercially reasonable deductibles) insuring the Improvements and Tangible
Personal Property against all insurable risks customarily covered by casualty
insurance and the costs of demolition and debris removal; and
(b) a policy or policies of workers' compensation and employers'
liability insurance, commercial general liability insurance, and automobile
liability insurance.
17. Cooperation with Buyer. Seller's representations and warranties
shall not be affected or released by Buyer's waiver or fulfillment of any Buyer
Condition Precedent: Seller hereby irrevocably authorizes Buyer and its agents
-13-
14
to make all inquiries with and applications to any third party, including any
governmental authority, as Buyer may reasonably require to complete its due
diligence.
18. Brokers and Finders. Neither party has had any contact or dealings
regarding the Property, or any communication in connection with the subject
matter of this transaction, through any real estate broker or other person who
can claim a right to a commission or finder's fee in connection with the sale
contemplated herein except for CB Commercial ("Broker") , whose entire
commission shall be the responsibility of Seller. In the event that any other
broker or finder claims a commission or finder's fee based upon any contact,
dealings or communication, the party through whom the broker or finder makes its
claim shall be responsible for said commission or fee and all costs and expenses
(including, without limitation, reasonable attorneys' fees) incurred by the
other party in defending against the same. The party through whom any other
broker or finder makes a claim shall hold harmless, indemnify and defend the
other party hereto, its successors and assigns, agents, employees, officers and
directors, and the Property from and against any and all obligations,
liabilities, claims, demands, liens, encumbrances and losses (including, without
limitation, attorneys' fees), whether direct, contingent or consequential,
arising out of, based on, or incurred as a result of such claim. The provisions
of this Paragraph shall survive the termination of this Agreement.
19. REIT. Buyer hereby advises Seller that Buyer is qualified as a real
estate investment trust under the provisions of the Internal Revenue Code of
1986, as amended, and that, by reason thereof, the maintaining of such status
and the avoiding of any activity which might cause a penalty tax to be applied
is of material concern to Buyer. Accordingly, Seller agrees to make any
modifications or amendments to this Agreement requested by Buyer prior to the
expiration of the Due Diligence Period that may be necessary for Buyer to
maintain its status as a real estate investment trust or in order for it to
avoid a penalty tax; provided, however, that Seller shall have no obligation to
enter into any such modification or amendment that would materially alter or
affect, in Seller's sole judgment, Seller's rights, duties, or obligations
under this Agreement, or would cause Seller to incur any material costs.
20. Miscellaneous.
(a) Notices. Any notice, consent or approval required or
permitted to be given under this Agreement shall be in writing and shall be
deemed to have been given upon (i) hand delivery or facsimile transmission, (ii)
one business day after being deposited with Federal Express or another reliable
overnight courier service for next day delivery, or (iii) the date of receipt or
refusal of delivery if deposited in the United States mail, registered or
certified mail, postage prepaid, return receipt required, and addressed as
follows:
If to Seller: c/o Meyer Asset Management, Inc.
0000 Xxxxx Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx Xxxxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
with a copy to: Sonnenschein, Nath & Xxxxxxxxx
000 Xxxxx Xxxxxxxx Xxxxxx,
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
-14-
15
If to Buyer: Pacific Gulf Properties Inc.
0000 Xxx Xxxxxx, Xxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Attention: Xx. Xxxxxx Xxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
With a copy to: Xxx, Castle & Xxxxxxxxx LLP
0000 Xxxxxxx Xxxx Xxxx
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attention: Xxxx X. Xxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
If to Escrow
Holder: Xxxxxxx Xxxxx
Fidelity National Title Insurance Company
00000 Xxx Xxxxxx, Xxxxx 000
Phone: (000) 000-0000
Fax: (000) 000-0000
or such other address as either party may from time to time specify in writing
to the other.
(b) Successors and Assigns. Buyer shall not have the right to
assign this Agreement without the consent or approval of Seller except to a
person or entity affiliated with Buyer. This Agreement shall be binding upon,
and inure to the benefit of, the parties hereto and their respective successors,
heirs, administrators and assigns.
(c) Amendments. Except as otherwise provided herein, this
Agreement may be amended or modified only by a written instrument executed by
Seller and Buyer.
(d) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of California.
(e) Merger of Prior Agreements. This Agreement and the exhibits
hereto constitute the entire agreement between the parties and supersede all
prior agreements and understandings between the parties relating to the subject
matter hereof, including without limitation any letter of intent which shall be
of no further force or effect upon execution of this Agreement by Buyer and
Seller.
(f) Timing. For purposes of this Agreement "business day" shall
mean any day other than a Saturday, Sunday, California State or national holiday
or other day on which commercial bankers in California are generally not open
for business.
(g) Severability. If any provision of this Agreement, or the
application thereof to any person, place, or circumstance, shall be held by a
court of competent jurisdiction to be invalid, unenforceable or void, the
remainder of this Agreement and such provisions as applied to other persons,
places and circumstances shall remain in full force and effect.
(h) Counterparts. This Agreement, and any document executed in
connection with this Agreement, may be executed in any number of counterparts
each of which shall be deemed an original and all of which shall constitute one
and the same agreement with the same effect as if all parties had signed the
same signature page. It shall not be necessary that the signatures of, or on
behalf of, each party, or that the signatures of all persons required to bind
any party, appear on a single counterpart, but it shall be sufficient that the
signature of, or on behalf of, each party, appear on one or more of the
counterparts. Any signature page of this Agreement, and any document executed in
connection with this Agreement, may be detached from any counterpart of this
Agreement or such other document and reattached to any other counterpart of this
Agreement or such
-15-
16
other document identical in form hereto or thereto but having attached to it one
or more additional signature pages. This Agreement, and any document executed in
connection with this Agreement (except for the Deed or any other document to be
recorded), shall be deemed executed and delivered upon each party's delivery of
executed signature pages of this Agreement or such other document, which
signature pages may be delivered by facsimile with the same effect as delivery
of the originals.
(i) No Waiver. Except with respect to items which must be
approved or disapproved by Buyer prior to the expiration of the Due Diligence
period, no delay or failure on the part of any party hereto in exercising any
right, power or privilege under this Agreement or under any other instrument or
document given in connection with or pursuant to this Agreement shall impair any
such right, power or privilege or be construed as a waiver of any default or any
acquiescence therein. No single or partial exercise of any such right, power or
privilege shall preclude the further exercise of such right, power or privilege.
No waiver shall be valid against any party hereto unless made in writing and
signed by the party against whom enforcement of such waiver is sought and then
only to the extent expressly specified herein.
(j) Legal Representation. Each party has been represented by
legal counsel in connection with the negotiation of the transactions herein
contemplated and the drafting and negotiation of this Agreement. Each party and
its counsel has had an opportunity to review and suggest revisions to the
language of this Agreement. Accordingly, no provision of this Agreement shall be
construed for or against or interpreted to the benefit or disadvantage of any
party by reason of any party having or being deemed to have structured or
drafted such provision.
(k) Enforcement. In the event a dispute arises concerning the
performance, meaning or interpretation of any provision of this Agreement, the
defaulting party or the party not prevailing in such dispute shall pay any and
all costs and expenses incurred by the other party in enforcing or establishing
its rights hereunder, including, without limitation, court costs and attorneys'
fees. In addition to the foregoing award of attorneys' fees to the prevailing
party, the prevailing party in any lawsuit on this Agreement shall be entitled
to its attorneys' fees incurred in any post judgment proceedings to collect or
enforce the judgment. This provision is separate and several and shall survive
the merger of this Agreement into any judgment on this Agreement.
(1) Exhibits. All exhibits attached hereto are
incorporated herein as though fully set forth herein.
[rest of page left intentionally blank)
-16-
17
(m) Joint and Several Liability. All entities constituting
"Seller" hereunder shall be jointly and severally liable for the faithful
performance of the terms and conditions hereof, and of any other document
executed in connection herewith, to be performed by Seller.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
BUYER: SELLER:
PACIFIC GULF PROPERTIES INC., FULLERTON BUSINESS CENTER, 1976, a
a Maryland corporation California limited partnership
By: By: XXXXX INDUSTRIAL PROPERTIES -
------------------------------ FULLERTON 1976, a California general
partnership, general partner
------------------------------
(Print Name and Title)
By:
-----------------------------------
By: [SIG] Xxxxxxx X. Xxxxx, General Partner
-----------------------------
LO Nadal, S.V.P. By:
----------------------------- -----------------------------------
(Print Name and Title) Xxxxxx X. Xxxxx, General Partner
[BUYER AND SELLER TO INITIAL PARAGRAPH 7]
Fidelity National Title Insurance Company agrees to act as Escrow Holder in
accordance with the terms of this Agreement.
FIDELITY NATIONAL TITLE INSURANCE COMPANY
By:
--------------------------------------
--------------------------------------
(Print Name and Title)
-17-
18
EXHIBIT A
RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
Pacific Gulf Properties Inc.
0000 Xxx Xxxxxx, Xxxxxx Xxxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000-0000
Attention: Xx. Xxxxxx Xxxxx
MAIL TAX STATEMENT TO:
Pacific Gulf Properties Inc.
0000 Xxx Xxxxxx, Xxxxxx Xxxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000-0000
Attention: Xx. Xxxxxx Xxxxx
--------------------------------------------------------------------------------
(Space Above Line for Recorder's Use Only)
GRANT DEED
(Fullerton)
In accordance with Section 11932 of the California Revenue and Taxation Code,
Grantor has declared the amount of the transfer tax which is due by a separate
statement which is not being recorded with this Grant Deed.
FOR VALUE RECEIVED, FULLERTON BUSINESS CENTER, 1976, a California
limited partnership, grants to PACIFIC GULF PROPERTIES INC., a Maryland
corporation ("Grantee") , all that certain real property situated in the City of
Fullerton, County of Orange, State of California, described on Schedule 1
attached hereto and by this reference incorporated herein (the "Property")
IN WITNESS WHEREOF, the undersigned has executed this Grant Deed as of
__________________,1997.
FULLERTON BUSINESS CENTER, 1976, a California limited
partnership
By: XXXXX INDUSTRIAL PROPERTIES - FULLERTON 1976,
a California general partnership, general partner
By:
---------------------------------------------------
Xxxxxxx X. Xxxxx, General Partner
By:
---------------------------------------------------
Xxxxxx X. Xxxxx, General Partner
19
STATE OF CALIFORNIA)
) ss.
COUNTY OF )
On _________________, 1997, before me, the undersigned, a Notary
Public in and for said County and State, personally appeared _________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/ their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s) , or the entity upon behalf of which the person(s)
acted, executed the within instrument.
WITNESS my hand and official seal.
------------------------------------
Notary Public
STATE OF CALIFORNIA
) ss.
COUNTY OF )
On __________________, 1997, before me, the undersigned, a
Notary Public in and for said County and State, personally appeared
__________________, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to
the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s) , or the entity upon behalf of
which the person(s) acted, executed the within instrument.
WITNESS my hand and official seal.
-------------------------------------
Notary Public
20
SCHEDULE 1 TO DEED
LEGAL DESCRIPTION
21
DECLARATION OF DOCUMENTARY TRANSFER TAX
DO NOT RECORD
County Recorder
Orange County, California
It is hereby requested that this Declaration of Documentary Transfer Tax
not be recorded with the attached Grant Deed, but be affixed to the Grant Deed
after it is recorded and before it is returned.
The Grant Deed names FULLERTON BUSINESS CENTER, 1976, as Grantor, and
PACIFIC GULF PROPERTIES INC., as Grantee. The property being transferred is
located in the City of Fullerton, County of Orange, State of California. The
Assessor's Parcel No. is __________________.
The undersigned Grantor hereby declares that the amount of Documentary
Transfer Tax due on the attached Grant Deed is $________, computed on the full
value of the interest or property conveyed.
I declare under penalty of perjury that the foregoing is true and
correct.
FULLERTON BUSINESS CENTER, 1976, a California limited
partnership
By: XXXXX INDUSTRIAL PROPERTIES - FULLERTON 1976, a
California general partnership, general partner
By:
-----------------------------------------------------
Xxxxxxx X. Xxxxx, General Partner
By:
-----------------------------------------------------
Xxxxxx X. Xxxxx, General Partner
22
EXHIBIT B
XXXX OF SALE
(Fullerton)
FOR VALUE RECEIVED, FULLERTON BUSINESS CENTER, 1976, ("Seller") hereby
sells, conveys and assigns to PACIFIC GULF PROPERTIES INC., a Maryland
corporation, all of Seller's right, title and interest in and to any personal
property located upon or used in the ownership, operation, management,
maintenance and/or repair of that certain real property commonly known as
"Fullerton Business Center" and described in Schedule 1 attached hereto and
incorporated herein by this reference and the improvements thereon
(collectively, the "Personal Property").
TO HAVE AND TO HOLD the Personal Property unto the grantee and its
successors and assigns forever.
Seller warrants that it owns good and marketable title to the Personal
Property and will defend title to the Personal Property against all persons
claiming a prior right thereto to the extent that such prior right is alleged to
exist on or before the date of this Xxxx of Sale.
All entities constituting Seller shall be jointly and severally liable for
the faithful performance of the terms and conditions hereof to be performed by
Seller.
IN WITNESS WHEREOF, Seller has executed this Xxxx of Sale on this ____ day
of ___________________, 1997.
FULLERTON BUSINESS CENTER, 1976, a California limited
partnership
By: XXXXX INDUSTRIAL PROPERTIES - FULLERTON 1976, a
California general partnership, general partner
By:
-----------------------------------------------------
Xxxxxxx X. Xxxxx, General Partner
By:
-----------------------------------------------------
Xxxxxx X. Xxxxx, General Partner
23
LEGAL DESCRIPTION OF THE PROPERTY
24
EXHIBIT C
ASSIGNMENT OF SERVICE CONTRACTS, WARRANTIES,
GUARANTIES, PERMITS AND OTHER INTANGIBLE PROPERTY
(Fullerton)
THIS ASSIGNMENT OF SERVICE CONTRACTS, WARRANTIES, GUARANTIES AND OTHER
INTANGIBLE PROPERTY (this "Assignment") is made as of ________________________
1997, by FULLERTON BUSINESS CENTER, 1976, a California limited partnership
("Assignor"), to PACIFIC GULF PROPERTIES INC., a Maryland corporation
("Assignee").
WITNESSETH:
WHEREAS, Assignor is contemporaneously herewith selling pursuant to that
certain Purchase and Sale Agreement and Escrow Instructions dated as of
____________, 1997, by and between Assignor and Assignee (the "Purchase
Agreement") that certain real property and improvements thereon located in the
City of Fullerton, County of Orange, State of California, the real property of
which is more particularly described on Schedule 1 attached hereto and
incorporated herein by this reference. Terms used in this Assignment and not
otherwise defined shall be given the meanings defined in the Purchase Agreement.
WHEREAS, Assignor desires to assign its interest in and to the following
to Assignee as of the date on which title to the Real Property is vested in
Assignee (the "Transfer Date"):
All service contracts described in Schedule 2 attached hereto and
incorporated herein by this reference (the "Contracts");
a) All "Warranties and Guaranties" (hereinafter defined);
b) All "Names and Marks" (hereinafter defined);
c) All "Intangible Property" (hereinafter defined); and
d) All "Permits" (hereinafter defined).
NOW, THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION, the receipt and sufficiency
of which is hereby acknowledged, the parties hereto agree as follows:
1) As of the Transfer Date, Assignor hereby assigns and transfers unto
Assignee all of its right, title, claim and interest in, to and under the (a)
Contracts; (b) Warranties and Guarantees; (c) Names and Marks; (d) Intangible
Property and (e) Permits (collectively the "Assigned Interests") .
2) The following terms shall have the following meanings:
(A) The term "Warranties and Guaranties" as used herein shall mean
and include all warranties and guarantees to the extent assignable, whether or
not written, for all or any portion of the Property, including without
limitation the Improvements and the Tangible Personal Property, including
without limitation construction warranties from contractors and subcontractors.
(B) The term "Names and Marks" as used herein shall mean and include
all patents, licenses, trademarks, service marks and names used in connection
with the operation of the Property, and all symbols, emblems and logos used in
connection with the ownership or operation of the Property, whether in black and
white or in color, and irrespective of size, and all of Assignor's right, title
and interest in and to all goodwill associated therewith, including, without
limitation the name "Fullerton Business Center".
(C) The term "Intangible Property" as used herein shall mean and
include all intangible property relating to or used in connection with the
Property, as defined in the Purchase Agreement.
25
(D) The term "Permits" as used herein shall mean and include all
governmental permits and approvals relating to the construction, operation, use
or occupancy of the Property.
3) In the event of any litigation between Assignor and Assignee arising
out of the obligations of the parties under this Assignment or concerning the
meaning or interpretation of any provision contained herein, the losing party
shall pay the prevailing party's costs and expenses in such litigation,
including, without limitation, reasonable attorneys' fees and expenses. In
addition to the foregoing award of attorneys' fees to the prevailing party, the
prevailing party in any lawsuit on this Agreement shall be entitled to its
reasonable attorneys' fees incurred in any post judgment proceedings to collect
or enforce the judgment. This provision is separate and several and shall
survive the merger of this Assignment into any judgment on this Assignment.
4) This Assignment shall be binding on and inure to the benefit of
Assignee and Assignor, and their respective 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.
[rest of page left intentionally blank]
26
6) Nothing contained herein shall be deemed or construed as relieving
the Assignor or Assignee of their respective duties and obligations under the
Purchase Agreement.
IN WITNESS WHEREOF, Assignor has executed this Assignment as of the date
first above written.
ASSIGNOR: FULLERTON BUSINESS CENTER, 1976, a California limited
partnership
By: XXXXX INDUSTRIAL PROPERTIES - FULLERTON 1976, a
California general partnership, general partner
By:
-----------------------------------------------------
Xxxxxxx X. Xxxxx, General Partner
By:
-----------------------------------------------------
Xxxxxx X. Xxxxx, General Partner
ASSIGNEE: PACIFIC GULF PROPERTIES INC.,
a Maryland corporation
By: [SIG]
-------------------------------------------------------
(Name) Vice President
--------------------------------------------------------
(Print Name and/Title)
By: [SIG]
--------------------------------------------------------
(Name) S.V.P.
--------------------------------------------------------
(Print Name and Title)
27
Schedule 1
LEGAL DESCRIPTION OF REAL PROPERTY
28
Schedule 2
DESCRIPTION OF THE CONTRACTS
29
EXHIBIT D
ASSIGNMENT OF LEASES
(Fullerton)
THIS ASSIGNMENT OF LEASES (this "Assignment") dated as of
______________, 1997, is made by FULLERTON BUSINESS CENTER, 1976, a California
limited partnership ("Assignor"), to PACIFIC GULF PROPERTIES INC., a Maryland
corporation ("Assignee").
WITNESSETH:
WHEREAS, Assignor is the lessor under certain leases executed with
respect to that certain real property located in the City of Fullerton, County
of Orange, State of California (the "Property") more particularly described on
Schedule 1 attached hereto and incorporated herein by this reference, which
leases are described in Schedule 2 attached hereto and incorporated herein by
this reference (the "Leases").
WHEREAS, Assignor is contemporaneously herewith selling the Property to
Assignee pursuant to that certain Purchase and Sale Agreement and Escrow
Instructions dated as of ______________, 1997, by and between Assignor and
Assignee (the "Purchase Agreement").
WHEREAS, Assignor desires to assign its interest in and to the Leases to
Assignee as of the date on which title to the Property is vested in Assignee
(the "Transfer Date").
NOW, THEREFORE, in consideration of the covenants and agreements
contained herein, the parties hereby agree as follows:
1. As of the Transfer Date, Assignor hereby assigns to Assignee all of
its right, title and interest in and to the Leases.
2. Assignor warrants and represents that as of the Transfer Date, the
attached Schedule 2 includes all of the Leases affecting the Property and there
are no assignments of or agreements to assign the Leases to any other party.
3. In the event of any litigation between Assignor and Assignee arising
out of the obligations of the parties under this Assignment or concerning the
meaning or interpretation of any provision contained herein, the losing party
shall pay the prevailing party's costs and expenses in such litigation,
including, without limitation, reasonable attorneys' fees and expenses. In
addition to the foregoing award of attorneys' fees to the prevailing party, the
prevailing party in any lawsuit on this Agreement shall be entitled to its
reasonable attorneys' fees incurred in any post judgment proceedings to collect
or enforce the judgment. This provision is separate and several and shall
survive the merger of this Assignment into any judgment on this Assignment.
4. This Assignment shall be binding on and inure to the benefit of the
Assignee and Assignor and their respective 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.
30
6. Nothing contained herein shall be deemed or construed as relieving
the Assignor or Assignee of their respective duties and obligations under the
Purchase Agreement.
IN WITNESS WHEREOF, Assignor has executed this Assignment as of the date
first above written.
ASSIGNOR: FULLERTON BUSINESS CENTER, 1976, a California limited
partnership
By: XXXXX INDUSTRIAL PROPERTIES - FULLERTON 1976, a
California general partnership, general partner
By:
-----------------------------------------------------
Xxxxxxx X. Xxxxx, General Partner
By:
-----------------------------------------------------
Xxxxxx X. Xxxxx, General Partner
ASSIGNEE: PACIFIC GULF PROPERTIES INC.,
a Maryland corporation
By: [SIG]
-------------------------------------------------------
(Name) Vice President
--------------------------------------------------------
(Print Name and/Title)
By: [SIG]
--------------------------------------------------------
(Name) S.V.P.
--------------------------------------------------------
(Print Name and Title)
31
Schedule 1
LEGAL DESCRIPTION OF REAL PROPERTY
32
Schedule 2
DESCRIPTION OF THE LEASES
33
EXHIBIT E
ESTOPPEL CERTIFICATE
Tenant:_______________________________
Date: ___________________________, 1997
Address: _____________________________
______________________________________
Lease Date:___________________________
Commencement Date:____________________
Square Footage:_______________________
Expiration Date:______________________
Term In Years:________________________
Current Monthly Payments: $___________
Base Rental: $________________________
Operating Expenses: $_________________
Rent & OE Pmts Are Due:_______________
Tax Pmts Are Due:_____________________
Taxes: $______________________________
Security Deposit:_____________________
OPTIONS
Check appropriate box below
[ ] Extension option
[ ] Expansion option
[ ] Termination Option
[ ] Purchase Option
and provide details in Paragraph 7 below
[ ] None
[ ] Check here if you have rental escalations and provide details in Paragraph
4 below.
Tenants Proportionate Share Of Taxes And Operating Expenses _________%
================================================================================
THE UNDERSIGNED, AS TENANT UNDER THE LEASE OF THE ABOVE REFERENCED PREMISES
("PREMISES") EXECUTED BY _________________ ("LANDLORD"), AS LANDLORD, AND TENANT
ON THE ABOVE-REFERENCED LEASE DATE, DOES HEREBY STATE, DECLARE, REPRESENT AND
WARRANT TO PACIFIC GULF PROPERTIES INC. ("BUYER") AND ITS ASSIGNEES AS FOLLOWS:
1. Accuracy. That the information contained in this Tenant's Estoppel
Certificate is true and correct as of the date above written.
2. Lease. That the copy of the Lease attached hereto as Schedule 1 is a true and
correct copy of the Lease which is in full force and effect and which has not
been amended, supplemented or changed by letter agreement or otherwise, except
as follows [if none, indicate so by writing "NONE" below]:
3. Completion of Premises/No Disputes. Tenant has accepted possession of the
Premises, and all conditions to be satisfied by Landlord under the Lease have
been completed pursuant to the terms of the Lease, including, but not limited
to, completion of construction of the Premises (and all other improvements
required under the Lease) in accordance with applicable plans and specifications
and within the time periods set forth in the Lease; there are no unreimbursed
expenses (except the annual operating expense and tax expense adjustment)
including, but not limited to, capital expenses reimbursements; and Tenant has
no complaints or disputes with Landlord regarding the overall operation,
34
maintenance or condition of the Premises or the property within which the
Premises is located (the "Property"), or otherwise.
4. Rental Escalation. Base Rental is subject to the following escalation
adjustments (if none, indicate so by writing "NONE" below):
________________________________________________________
________________________________________________________
________________________________________________________
5. No Defaults/Claims. Neither Tenant nor, to Tenant's knowledge, Landlord
under the Lease is in default under any terms of the Lease nor has any event
occurred which with the passage of time (after notice, if any, required by the
Lease) would become an event of default under the Lease. Tenant has no claims,
counterclaims, defenses or setoffs against Landlord arising from the Lease, the
Premises or the Property, nor is Tenant entitled to any concession, rebate,
allowance or free rent for any period after this certification.
6. No Advance Payments. No rent has been paid more than one (1) month in advance
by Tenant except for the current month's rent, and no security (other than a
security deposit in the amount of $___________ has been deposited with Landlord.
7. No Options/Purchase Rights. Tenant has no right of first refusal to purchase
the Property or any interest therein and no right to cancel or terminate the
Lease except as follows [if none, indicate so by writing "NONE" below]:
________________________________________________________
________________________________________________________
________________________________________________________
8. No modification of Lease. From the date of this Estoppel Certificate through
_____________, 19__, no modification or amendment to the Lease, forgiveness of
payment of rent or other amount due under the Lease, grant of extension or
option, or prepayment of rents may be made except upon the written consent
thereto executed by Buyer, which consent may be unreasonably withheld if not
otherwise provided in the Lease.
9. Parking. The number of parking spaces allotted to Tenant under the terms of
the Lease, for the use of its employees, agents, invitees and licensees is
__________________________; of these spaces, ________ are reserved for Tenant's
exclusive use.
10. No Sublease/Assignment. Tenant has not entered into any sublease,
assignment or any other agreement transferring any of its interest in the Lease
o r t h e P r e m i s e s, e x c e p t a s f o 1 1 o w s:
________________________________________________________
11. No Notice. Tenant has not received written notice of any assignment,
hypothecation, mortgage, or pledge of Landlord's interest in the Lease or the
rents or other amounts payable thereunder, except those listed below.
________________________________________________________
________________________________________________________
________________________________________________________
12. Hazardous Materials. No hazardous or toxic substance (including without
limitation PCB's, petroleum, petroleum products and fractions thereof) has been
used, treated, stored or disposed of on the Premises or Property in violation of
environmental laws by Tenant or, to Tenant's knowledge, any other party. No
underground storage tanks exist or, to Tenant's knowledge, have existed on or
under the Property. Tenant does not have any permits or identification numbers
issued by any environmental or governmental agency with respect to its
operations on the Premises, except those listed below.
________________________________________________________
________________________________________________________
________________________________________________________
35
13. Reliance. Tenant recognizes and acknowledges it is making these
representations to Buyer with the intent that Buyer and any assigns of Buyer
will fully rely on Tenant's representations.
14. Binding. The provisions hereof shall be binding upon and inure to the
benefit of the successors, assigns, personal representatives and heirs of Tenant
and Buyer.
EXECUTED BY TENANT, IF TENANT IS A SOLE PROPRIETOR OR A GENERAL PARTNERSHIP, OR
BY AN OFFICER OF TENANT, IF TENANT IS A CORPORATION, ON THE DATE FIRST WRITTEN
ABOVE.
BY:
----------------------------------------
a
-------------------------------
BY:
-------------------------------
NAME:
-------------------------------
TITLE:
-------------------------------
36
Schedule 1 to Estoppel Certificate
LEASE
37
EXHIBIT F
FORM OF NOTICE TO TENANTS
__________________, 1997
To: ____________________________
____________________________
____________________________
____________________________
RE: Notice of Lease Assignment
This letter is to notify you that the property commonly known as the
_____________________ ("Property") has this date been sold and ownership
transferred.
In connection with this sale, all of the interest of the lessor under
your lease of space in the Property has been transferred. You are hereby
notified that, from and after the date hereof and until further notice, all
future payments under your lease should be made payable to "_________________ "
(the "Property manager") and mailed to the Property Manager, whose address is
________________ ____________________________ . In addition, all questions or
other matters regarding your lease should be directed to the Property Manager at
(____) ____________________.
Also in connection with this sale, if you have paid a security deposit
in connection with your lease, it has been transferred to the Property Manager.
The return of any such security deposit will be conditioned upon and subject to
the terms and conditions of the lease and the legal requirements of the State of
California. All future inquiries regarding security deposits are to be directed
to the Property Manager.
Thank you for your cooperation.
Very truly yours,
---------------------------------------------
---------------------------------------------
---------------------------------------------
38
EXHIBIT G
TRANSFEROR'S CERTIFICATION OF NON-FOREIGN STATUS
To inform PACIFIC GULF PROPERTIES INC., a Maryland corporation
("Transferee"), that withholding of tax under Section 1445 of the Internal
Revenue Code of 1986, as amended ("Code"), will not be required upon the
transfer of certain real property to the Transferee by FULLERTON BUSINESS
CENTER, 1976 ("Transferor"), the undersigned hereby certifies the following on
behalf of the Transferor:
1. The Transferor is not a foreign corporation, foreign partnership,
foreign trust, foreign estate or foreign person (as those terms are defined in
the Code and the Income Tax Regulations promulgated thereunder);
2. The Transferor's U.S. employer or tax (social security)
identification number is 00-0000000;
The Transferor understands that this Certification 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.
The Transferor understands that the Transferee is relying on this
Certification in determining whether withholding is required upon said transfer.
The Transferor hereby agrees to indemnify, defend and hold the
Transferee harmless from and against any and all obligations, liabilities,
claims, losses, actions, causes of action, rights, demands, damages, costs and
expenses of every kind, nature or character whatsoever (including, without
limitation, reasonable attorneys' fees and court costs) incurred by the
Transferee as a result of: (i) the Transferor's failure to pay U. S. Federal
income tax which the Transferor is required to pay under applicable U.S. law;
or (ii) any false or misleading statement contained herein.
Under penalty of perjury I declare that I have examined this
Certification and to the best of my knowledge and belief it is true and correct
and complete, and I further declare that I have authority to sign this document
on behalf of the Transferor.
Date:_______________________, 1997
FULLERTON BUSINESS CENTER, 1976, a California limited
partnership
By: XXXXX INDUSTRIAL PROPERTIES - FULLERTON 1976, a
California general partnership, general partner
By:
-----------------------------------------------------
Xxxxxxx X. Xxxxx, General Partner
By:
-----------------------------------------------------
Xxxxxx X. Xxxxx, General Partner
39
EXHIBIT H
RENT ROLL
40
EXHIBIT I
DISCLOSURE OF UNPAID COSTS AND OBLIGATIONS
