EXHIBIT 10.6
AGREEMENT OF PURCHASE AND SALE
AND ESCROW INSTRUCTIONS
(2525 NATOMAS PARK DRIVE)
This Agreement of Purchase and Sale and Escrow Instructions ("AGREEMENT"),
dated for reference purposes as of February 17, 1997, is entered into by and
between 2525 NATOMAS INVESTORS, a California limited partnership ("SELLER"), and
XXXXXXXX PROPERTIES ACQUISITION PARTNERS, L.P. , a Delaware limited partnership
("BUYER").
RECITALS
A. Seller is the owner of approximately 6.14 acres of land located in
the City of Sacramento, County of Sacramento, State of California ("LAND"), more
particularly described in EXHIBIT "A" hereto and made a part hereof for all
-----------
purposes.
B. The Land has been improved with a three (3) story office building,
containing approximately 97,426 of net rentable square feet and related
improvements.
C. Buyer desires to purchase from Seller and Seller desires to sell to
Buyer the "PROPERTY" (as hereinafter defined in SECTION 1.8) on the terms and
conditions set forth herein.
D. In conjunction with its purchase of the Property, Buyer is also
purchasing the real properties located at the addresses ("ADDITIONAL
PROPERTIES") more particularly described in EXHIBIT "B" hereto and made a part
-----------
hereof for all purposes, from the sellers (the "OTHER SELLERS") listed therein
pursuant to certain Agreements of Purchase and Sale and Escrow Instructions of
even date herewith ("ADDITIONAL PROPERTY AGREEMENTS"), the simultaneous purchase
of which shall be a condition concurrent to Buyer's purchase of the Property
hereunder.
NOW, THEREFORE, Seller and Buyer agree as follows:
AGREEMENT
ARTICLE I.
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:
I.1. LAND. The Land;
----
I.2. APPURTENANCES. All rights, privileges and easements appurtenant to
-------------
the Land,
including, without limitation, all minerals, oil, gas and other hydrocarbon
substances on and under the Land (to the extent owned by Seller) as well as all
development rights, air rights, water, water rights and water stock relating to
the Land and any other easements, rights-of-way or appurtenances, used in
connection with the beneficial use and enjoyment of the Land (all of which are
collectively referred to as the "APPURTENANCES");
I.3. IMPROVEMENTS. All buildings improvements and fixtures located on
------------
the Land, including, without limitation, all fixtures, apparatus, equipment and
appliances used in connection with the operation or occupancy thereof, such as
heating and air conditioning systems and facilities used to provide any utility
services, parking services, refrigeration, ventilation, trash disposal,
recreation or other services thereto (all of which are collectively referred to
as the "IMPROVEMENTS");
I.4. PERSONAL PROPERTY. All of the personal property owned by Seller
-----------------
located on or in or used in connection with the Property ("PERSONAL PROPERTY"),
including without limitation the items of tangible personal property consisting
of all furniture, fixtures, equipment, machinery and other personal property of
every kind and nature (excluding cash-on-hand) owned by Seller and located on or
used or useful in the operation of the Property, all of which will be assigned
pursuant to the Xxxx of Sale, as hereinafter defined; which Personal Property
includes the works of art listed on EXHIBIT "K" ("WORKS OF ART");
-----------
I.5. INTANGIBLE PROPERTY. All of the right, title and interest of Seller
-------------------
in any intangible personal property owned by Seller and used exclusively in the
use and operation of the Improvements, and all warranties or guarantees received
by Seller from any contractors, subcontractors, suppliers or materialmen in
connection with any construction, repairs or alteration of the Improvements,
licenses, franchises, permits, tenant lists, advertising materials and other
similar rights relating to the use and operation of the Property (all of which
are collectively referred to as the "INTANGIBLE PROPERTY"), all of which shall
be assigned to Buyer pursuant to the Xxxx of Sale;
I.6. LEASES. The interest of Seller as landlord under all leases of
------
space in the Improvements ("LEASES") in effect on the Closing Date;
I.7. SERVICE CONTRACTS. The interest of Seller under all current design
-----------------
contracts, space planning contracts, construction contracts, subcontracts and
purchase orders, utility contracts, water and sewer service contracts of any
nature, maintenance contracts, management contracts, mortgage documents,
certificates of occupancy, permits, soils reports, insurance policies, and other
contracts or documents of any nature relating to the Property which are to be
assigned to Buyer at the Closing ("SERVICE CONTRACTS"). All such Service
Contracts approved by Buyer shall be transferred and assigned to Buyer by the
Xxxx of Sale; and
I.8. PROPERTY. All of the items described in SECTIONS 1.1 through 1.7
--------
above are herein collectively referred to as the "PROPERTY." The items described
in SECTIONS 1.1, 1.2 and 1.3 are herein referred to collectively as the "REAL
PROPERTY."
2
ARTICLE II.
PURCHASE PRICE
--------------
II.1. PURCHASE PRICE.
--------------
(a) Subject to the provisions of this SECTION 2.1 hereinafter set forth,
the purchase price for the Property shall be the sum of Ten Million Two Hundred
Thousand and No/100ths Dollars ($10,200,000.00) (the "PURCHASE PRICE"). A
portion of the Purchase Price has been allocated to the purchase of the Works of
Art in the manner set forth on EXHIBIT "K" attached hereto and made a part
-----------
hereof for all purposes.
(b) The Property is currently encumbered by the lien and provisions of that
certain first lien indebtedness and instruments securing same (the "FIRST LIEN
DEBT") held by Ausa Life Insurance Company (the "LIEN HOLDER"). The unpaid
principal balance of the First Lien Debt is approximately $10,125,000.00 (the
"PRINCIPAL BALANCE"). The First Lien Debt is currently in default. The sums
which will be due and payable in respect to the First Lien Debt to the Lien
Holder on the Closing Date plus the Closing Costs, as hereinafter defined, are
expected to exceed the Purchase Price. In such regard, subject Seller's rights
to terminate the transaction contemplated hereby as hereinafter provided, Seller
shall be responsible for the payment of all sums due the Lien Holder plus the
Closing Costs in excess of an amount equal to the Purchase Price plus the NOI.
All net operating income ("NOI") generated from the Property from January 1,
1997 (the First Lien Debt having been current as of December 31, 1996) through
the Closing Date shall be applied to interest and other costs applicable to the
First Lien Debt. The term "NOI" shall mean gross revenues for the period from
January 1, 1997 through the Closing Date less operating expenses for such
period.
(c) In the event the sums payable by Seller in accordance with the
provisions of subparagraph (b) exceed the sum of $200,000.00, Seller shall have
the right to terminate this Agreement, unless Purchaser elects to pay amounts
due the Lien Holder plus Closing Costs in excess of the Purchase Price plus the
$200,000.00 amount plus the NOI. In the event that Seller terminates this
Agreement pursuant to the provisions of this SECTION 2.1, such termination shall
not affect the Additional Property Agreements or give the Other Sellers any
rights to terminate the Additional Property Agreements.
(d) The term "AMOUNTS DUE THE LIEN HOLDER" shall mean and include the
Principal Balance of the First Lien Debt together with all accrued and unpaid
interest thereon, penalties and other interest, costs of collection, including
lender's attorney's fees and receivers fees and other sums due under the loan
documents evidencing the First Lien Debt. The term "CLOSING COSTS" shall mean
transfer taxes, title premiums, escrow charges, miscellaneous charges and
attorneys' fees, which sum shall not exceed the sum of $60,000.00. The terms
"AMOUNTS DUE THE LIEN HOLDER" or "CLOSING COSTS" shall not include Seller's
other costs incurred in connection with the consummation of the transaction
contemplated hereby, such as brokerage commissions.
3
(e) In the event the amounts due the Lien Holder at Closing, after the
application of NOI to the First Lien Debt, are less than the sum of
$10,200,000.00, the Purchase Price shall be reduced by an amount equal to
difference between the sum of $10,200,000.00 and the sums due the Lien Holder;
provided, however in no event shall the Purchase Price be reduced below the sum
of $10,000,000.00.
II.2. PAYMENT OF PURCHASE PRICE. The Purchase Price shall be paid by
-------------------------
Buyer in cash by wire transfer on the Closing Date.
II.3. XXXXXXX MONEY.
-------------
(a) Within two (2) business days following the Effective Date, Buyer shall
deposit, or cause to be deposited with First American Title Insurance Company,
located at 0000 XXX Xxxxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000; Attn: Xxxxxxxxxx X.
Xxx (the "TITLE COMPANY"), in cash, by certified or bank cashier's check made
payable to the Title Company, or by a confirmed wire transfer of funds, the sum
of Five Hundred Thousand and No/100 Dollars ($500,000.00) (the "XXXXXXX MONEY")
in accordance with the terms of that certain letter agreement (the "XXXXXXX
MONEY LETTER") of even date herewith by and between Buyer, the Title Company,
Seller and the Other Sellers. The Xxxxxxx Money constitutes escrow deposit under
this Agreement and the Additional Property Agreements. The Xxxxxxx Money shall
be held and disbursed in accordance with the terms of the Xxxxxxx Money Letter.
(b) The term "EFFECTIVE DATE" shall mean the date upon which this Agreement
and the Additional Property Agreements have been fully executed and delivered by
Seller and Buyer and Seller and the Other Sellers, as the case may be and one
duplicate original of each has been deposited with the Title Company.
II.4. LIQUIDATED DAMAGES. IN THE EVENT THAT THE SALE OF THE PROPERTY AS
------------------
CONTEMPLATED HEREUNDER IS NOT CONSUMMATED BECAUSE OF A DEFAULT UNDER THIS
AGREEMENT BY BUYER, THROUGH NO FAULT OF SELLER, THE XXXXXXX MONEY SHALL BE
IMMEDIATELY PAID BY TITLE COMPANY, ON BEHALF OF BUYER, TO SELLER AS LIQUIDATED
DAMAGES PURSUANT TO THE XXXXXXX MONEY LETTER. THE PARTIES ACKNOWLEDGE 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 SIGNATURES
BELOW, THE PARTIES ACKNOWLEDGE THAT THE XXXXXXX MONEY HAS BEEN AGREED UPON,
AFTER NEGOTIATION, AS THE PARTIES REASONABLE ESTIMATE OF SELLER'S DAMAGES FOR
BUYER'S FAILURE TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT
AND THE ADDITIONAL PROPERTY AGREEMENTS AND AS SELLER'S EXCLUSIVE REMEDY AGAINST
BUYER IN THE EVENT OF A DEFAULT BY BUYER; PROVIDED, HOWEVER, NOTHING CONTAINED
HEREIN SHALL PRECLUDE (A) SELLER FROM PURSUING ANY REMEDIES SET FORTH IN
SECTIONS 8.2, 8.5, 8.6, 11.2 and 11.5 WHICH SURVIVE THE TERMINATION OF THIS
AGREEMENT OR (B) THE RECOVERY OF ITS
4
ATTORNEYS' FEES AND COSTS IN THE PROSECUTION OR DEFENSE OF ANY ACTION BROUGHT
UNDER THIS AGREEMENT, IF SELLER IS ENTITLED TO RECEIVE SAME. THE LIQUIDATED
DAMAGES SET FORTH HEREIN ABOVE ARE DUPLICATIVE OF AND NOT IN ADDITION TO THE
LIQUIDATED DAMAGES SET FORTH IN THE XXXXXXX MONEY LETTER.
BUYER: _________________ SELLER: ___________________
ARTICLE III.
TITLE TO PROPERTY
-----------------
III.1. TITLE TO REAL PROPERTY.
----------------------
III.1.1. At the Closing, Seller shall convey to Buyer fee simple
title to the Real Property, by execution and delivery of a Grant Deed ("DEED")
in the form attached hereto as EXHIBIT "C" and made a part hereof for all
-----------
purposes.
III.1.2. On the Closing Date, Buyer shall receive from the Title
Company an ALTA Owner's Policy of Title Insurance, in a form to be selected by
Buyer, with liability in the full amount of the Purchase Price, insuring fee
simple title to the Real Property in Buyer, subject only to exceptions approved
by Buyer as provided in SECTION 4.1.1 hereof, together with the following
endorsements: (i) an endorsement deleting all general exceptions and deleting
exclusions from coverage relating to creditor's rights, (ii) 116.1 (survey),
(iii) 100 (modified), (iv) 123.1 (zoning), (v) 116.4 (contiguity), (vi) 103.7
(access), (vii) 100.29 (mineral rights), (viii) 103.1 (easements) (ix) 103.5
(water rights) and (ix) such other endorsements as may be reasonably requested
by Buyer ("TITLE POLICY"). The Title Policy shall provide full coverage against
mechanics and material men's liens arising out of the construction, repair or
alteration of any of the Improvements or any tenant improvements.
III.1.3. The Title Company shall obtain, if requested by Buyer and
at Buyer's cost, reinsurance agreements from such companies as Buyer may
request, which reinsurance agreements shall be in ALTA Facultative Reinsurance
Agreement Form (rev. 1961), and shall include direct access agreements, in such
amounts and in such form as shall otherwise be satisfactory to Buyer.
III.2. TITLE TO PERSONAL PROPERTY. At the Closing, Seller shall transfer
--------------------------
title to the Personal Property pursuant to the Xxxx of Sale, in the form of Xxxx
of Sale and Assignment attached as EXHIBIT "D" hereto ("XXXX OF SALE") and shall
-----------
further transfer and assign all of Seller's rights in and to any Intangible
Property, pursuant to the Xxxx of Sale, and shall further transfer all of
Seller's rights, title and interest in and to the Leases pursuant to the
Assignment of Leases (as hereinafter defined). All such title and rights shall
be free of any liens, encumbrances or interests of third parties whatsoever.
5
ARTICLE IV.
CONDITIONS TO CLOSING
---------------------
IV.1. BUYER'S DUE DILIGENCE CONDITIONS. For a period beginning on the
--------------------------------
Effective Date and expiring at 5:00 p.m. on the thirtieth (30th) day thereafter
("CONTINGENCY PERIOD") Buyer, Buyer's agents, contractors, subcontractors,
employees and its counsel shall have the right to perform due diligence on the
Property pursuant to the terms of this SECTION 4.1 as follows:
IV.1.1. APPROVAL OF TITLE. Buyer's approval of the following
-----------------
matters relating to the title of the Property:
(a TITLE COMMITMENT. Buyer shall obtain (i) a title
----------------
commitment ("COMMITMENT"), by the terms of which the Title Company agrees
to issue to Buyer, at Closing, the Title Policy in the amount of the
Purchase Price; (ii) a photocopy of all documents ("TITLE DOCUMENTS")
describing or evidencing all title exceptions shown on the Commitment; and
(iii) reports relating to judgment, UCC, and Federal and State tax lien
searches regarding the Seller and the Property (collectively, the
"REPORTS"), to be obtained by Buyer, but to be paid for by Seller at the
Closing.
(b SURVEY. Buyer shall secure an as-built survey
------
("SURVEY") of the Property, prepared by a registered land surveyor, duly
licensed in the State and certified to the Title Company and to the Buyer
in full ALTA/ASTM form.
(c REVIEW OF SURVEY AND COMMITMENT.
-------------------------------
(i As used herein, the term "TITLE OBJECTION
PERIOD" shall mean a period commencing on the first day following
receipt by Buyer of the Survey, the Commitment, the Reports and the
Title Documents and ending ten (10) days thereafter. All matters
shown on the Survey and exceptions listed in the Commitment or the
Reports which are not objected to by Buyer within the Title
Objection Period, shall be conclusively deemed to be acceptable to
Buyer.
(ii In the event Buyer timely objects to any title
exception or Survey matter ("TITLE OBJECTION"), Seller may, but
shall not be obligated to, cure such Title Objection. Seller shall
notify Buyer, within five (5) days following receipt of the Title
Objection, of its decision as to whether or not it intends to cure
the Title Objection in question. In the event Seller notifies or is
deemed to have notified the Buyer that is unable or unwilling to
cure any Title Objection, Buyer may at its option (a) terminate this
Agreement, or (b) waive the Title Objections in question. The
foregoing election shall be made by Buyer in writing within ten (10)
days following Seller's notification. If any of the Title Objections
consist of delinquent taxes, delinquent assessments,
6
mortgages, deeds of trust, security agreements, construction or
mechanics' liens, tax liens or other liens or charges in a fixed sum
or capable of computation as a fixed sum, then, to that extent,
notwithstanding anything herein to the contrary, Seller shall be
obligated to pay and discharge (or bond against in a manner
sufficient to cause the Title Company to insure over such Title
Objections) any such Title Objections. Bonds and assessments in
respect to improvements heretofore made to the Property which are
reflected in the Commitment shall not be deemed to be a Title
Objection.
(iii Seller hereby agrees that it shall not, after
the Effective Date, subject the Property to or permit or suffer to
exist any liens, encumbrances, covenants, conditions, restrictions,
easements or other title matters other than those in existence on
the date hereof or seek any zoning changes or take any other action
which may affect or modify the status of title without Buyer's prior
written consent. Notwithstanding the foregoing, Buyer shall not be
required to accept title to the Property subject to any matters
which may arise subsequent to the effective date of the Title
Commitment, Reports and Survey examined by Buyer during the period
described above.
(iv Notwithstanding anything herein to the contrary,
in any event Buyer's right to terminate this Agreement pursuant to
any provision of this SECTION 4.1.1 shall expire upon expiration of
the Contingency Period.
(v As used in this Agreement, the term "PERMITTED
EXCEPTIONS" shall mean all matters either shown on the Survey or
listed in the Commitment or the Reports to which Buyer does not
raise a Title Objection within the Title Objection Period or, having
objected, waives or is deemed to have waived in accordance with the
provisions of this SECTION 4.1.1, other than those Title Objections
rendering title defeasible and delinquent taxes, mortgages, deeds of
trust, security agreements and other liens and charges that are to
be paid at Closing as provided above. It is understood and agreed
that the Property is being transferred hereunder free and clear of
all liens, claims and encumbrances except for the Permitted
Exceptions.
(d TERMINATION OF THIS AGREEMENT. In the event of
-----------------------------
termination of this Agreement pursuant to this SECTION 4.1.1, the Xxxxxxx
Money shall be returned to Buyer and thereafter neither party shall have
any further rights or obligations hereunder.
IV.1.2. INSPECTIONS.
-----------
(a Buyer and Buyer's agents, contractors, subcontractors
or employees, shall have the right to conduct any and all inspections,
investigations, tests and studies (including, without limitation,
investigations with regard to zoning, building codes and other governmental
regulations, architectural inspections,
7
engineering tests, economic feasibility studies, soils, seismic and
geologic reports and environmental testing) with respect to the Property as
Buyer may elect to make or maintain. During the Contingency Period, Buyer
and its agents and consultants shall have access to: (1) the Property; (2)
the tenants for interviews, which interviews shall be coordinated by
Seller, with Seller or its representative present if Seller so elects; and
(3) the books and records relating to the ownership and operation of the
Property, for the purpose of making such inspections, tests, copies and
verifications as Buyer shall deem reasonably necessary.
(b Prior to any entry onto the Property by Buyer's
agents, contractors, subcontractors or employees, Buyer shall deliver to
Seller a Certificate of Insurance for Buyer's commercial general liability
insurance policy which evidences that Buyer is carrying a commercial
general liability insurance policy with a financially responsible insurance
company (at least A-X in the latest edition of Best's Insurance Guide),
----------------------
covering (i) the activities of Buyer, and Buyer's agents, contractors,
subcontractors and employees on or upon the Property, and (ii) Buyer's
indemnity obligations set forth in this Agreement. Such Certificate shall
evidence that such insurance policy shall have a per occurrence limit
(including umbrella) of at least Five Million and no/100 Dollars
($5,000,000.00) and an aggregate limit (including umbrella) of at least Ten
Million and no/100 Dollars ($10,000,000.00), shall name Seller as an
additional insured, shall be primary and non-contributing with any other
insurance available to Seller, shall be issued on an occurrence basis, and
shall contain a full waiver of subrogation clause. Seller shall be named as
an additional insured under such policy in such Certificate.
(c Within five (5) days after Effective Date, Seller
shall deliver or cause to be delivered to Buyer at its offices in
Sacramento, California, the Due Diligence Documents listed on EXHIBIT "E"
-----------
attached hereto and made a part hereof for all purposes.
IV.1.3. AGREEMENTS. Buyer shall have approved the Leases,
----------
Service Contracts, Personal Property, and all other documents and materials to
be delivered to Buyer by Seller pursuant to the provisions of SECTION 4.1.2.
IV.1.4. INCOME TAX MATTERS. Buyer shall have received
------------------
satisfactory opinions from its legal counsel as to income tax matters in
connection with the transaction.
IV.1.5. AS-BUILT PLANS AND SPECIFICATIONS. Buyer and its
---------------------------------
architects, engineers and consultants shall have reviewed and approved the "AS-
BUILT" plans and specifications pursuant to which the Property was constructed,
including the confirmation of the net rentable area of the Property.
IV.1.6. PHYSICAL INSPECTION REPORTS. Buyer shall have obtained
---------------------------
a physical inspection report and an environmental report with respect to the
Land (including surrounding areas) and Improvements constituting the Property
prepared in accordance with the
8
specifications submitted by Buyer and prepared by third-party specialists
selected by Buyer, and Buyer shall then determine in its sole discretion whether
it is willing to purchase the Property in the physical and environmental
condition set forth in said reports.
IV.1.7. FINANCIAL INFORMATION. Buyer shall have (a) verified to
---------------------
its satisfaction the accuracy of the rent roll (the "RENT ROLL") attached
hereto as EXHIBIT "F" and the accuracy of projections and other financial data
-----------
with respect to the Property which have been delivered to Buyer in the offering,
(b) determine that the creditworthiness of the tenants is within the reasonable
financial risk parameters of Buyer, (c) verify that it is willing to accept and
be bound by the actual terms of the Leases, and (d) verify that the Property has
sufficient automobile parking spaces (including, without limitation, handicap
spaces) to comply with the requirements of all governmental authorities and
ordinances and all tenant leases.
IV.1.8. APPROVAL BY BOARD OF DIRECTORS. Buyer shall have,
------------------------------
within ten (10) days following the Effective Date, obtained the approval of the
Board of Directors (the "Board") of Xxxxxxxx Properties Trust, a real estate
investment trust, which is a partner in Buyer. In the event the Board fails to
approve the transaction contemplated hereby Buyer shall so notify Seller in
which event this Agreement along with the Additional Property Agreements shall
terminate and the Xxxxxxx Money shall be returned to Buyer. The failure to
notify Seller of Buyer's election to terminate this Agreement in accordance with
the provisions of this SECTION 4.1.8 within such ten (10) day period shall be
deemed to be an election on the part of Buyer to waive such contingency.
IV.1.9. CONTINGENCY NOTICE.
------------------
(a) Prior to the expiration of the Contingency Period, Buyer
shall deliver to Seller and the Title Company a written notice
("CONTINGENCY NOTICE") of its approval or disapproval of the Property,
which shall be subject to Buyer's sole and absolute discretion. In the
event that Seller does not receive a Contingency Notice approving the
Property by the expiration of the Contingency Period, this Agreement shall
be deemed to have been automatically terminated.
(b) Subject to the provisions of subparagraphs (c) below, the
Contingency Notice for the Additional Properties must be consistent with
the Contingency Notice for the Property in respect to Buyer's approval or
disapproval of the Additional Properties. If the Contingency Notices are
inconsistent, this Agreement shall terminate. Buyer or Seller shall have
the right to terminate this Agreement pursuant to SECTION 2.1(c) hereof
without affecting Buyer's rights of purchase the Additional Properties.
(c) In the event that the Xxxxxx Investors, one of the Other
Sellers under the Additional Property Agreements which owns that certain
tract of land known as Tract A, terminates its Additional Property
Agreement (the "TRACT A AGREEMENT") in accordance with the provisions of
SECTION 2.1(c) the Tract A Agreement, Buyer, at its option may elect (i) to
terminate this Agreement and the remaining Additional Property Agreements,
in which event the Xxxxxxx Money shall be returned to Buyer, or (ii) to
9
keep this Agreement, as well as the remaining Additional Property
Agreements, in full force and effect, in which event the parties shall
consummate the transactions contemplated thereby in accordance with the
respective terms and conditions of this Agreement and the remaining
Additional Property Agreements.
IV.2. APPROVAL BY SELLER'S PARTNERS. As a condition to Seller's
-----------------------------
obligations to consummate the transaction contemplated hereby, Seller shall
have, within ten (10) days following the Effective Date, obtained the approval
of the limited partners and other general partners (the "PARTNERS") of Seller.
In the event the Partners fail to approve the transaction contemplated hereby,
Seller shall so notify Buyer within such ten (10) day period, in which event
this Agreement along with the Additional Property Agreements shall terminate and
the Xxxxxxx Money shall be returned to Buyer. The failure by Seller to notify
Buyer of Seller's election to terminate this Agreement in accordance with the
provisions of this SECTION 4.2, within such ten (10) day period, shall be deemed
to be an election on the part of Seller to waive such contingency.
IV.3. BUYER'S CLOSING CONDITIONS. The following conditions are for the
--------------------------
benefit of Buyer and are conditions to the Closing, unless expressly waived by
Buyer on or before the Closing Date:
IV.3.1. TENANT ESTOPPEL CERTIFICATES. Seller shall deliver to
----------------------------
Buyer a current estoppel letter substantially in the form attached hereto as
EXHIBIT "G" from all tenants of the Property (and other occupants to the extent
-----------
that Seller has the contractual right to require such letters), in the aggregate
representing at least ninety percent (90%) of the occupied floor area of the
Property. In the event that Seller is unable to obtain an estoppel certificate
from any tenant which has leased less than ten thousand (10,000) square feet,
Seller shall furnish Buyer with a mutually acceptable, qualified estoppel
certificate concerning such Lease executed by Seller. Buyer shall provide Seller
with its desired form of estoppel certificates for each tenant on or before
twenty (20) days following the Effective Date. In addition, all tenants listed
on the Rent Roll or their subtenants occupying in excess of 10,000 square feet
of net rentable area will be in "material compliance" with the terms and
conditions of their respective leases (except for premises which may not yet be
ready for occupancy as the result of new leases or modified leases). The term
"MATERIAL COMPLIANCE" shall mean that the tenant is question is not more than
thirty (30) days in arrears in the payment of rent due under its lease and/or
the tenant in question has not filed for bankruptcy protection under applicable
law.
IV.3.2. SIMULTANEOUS CLOSING. The Closing shall be contingent
--------------------
upon the simultaneous closing of the Additional Properties, pursuant to the
terms and conditions of the Additional Property Agreements. Notwithstanding the
foregoing, in the event (a) any of the Additional Property Agreements are
terminated as a result of a Seller default, or in accordance with ARTICLE IX of
the Additional Property Agreements, Buyer shall have the option, in its sole
discretion, to terminate this Agreement and the Xxxxxxx Money shall be returned
to Buyer or Buyer may waive the simultaneous closing condition and consummate
the transaction contemplated herein and (b) the Tract A Agreement is terminated
by Buyer or Xxxxxx Investors pursuant to SECTION 2.1(c) thereof, Buyer shall
have the right to terminate this
10
Agreement, in its sole discretion, in which event the Xxxxxxx Money shall be
returned to Buyer or Buyer may consummate the transaction contemplated herein
without regard to such termination.
IV.3.3. TITLE INSURANCE. As of the Closing Date, the Title
---------------
Company shall have issued or shall have committed to issue the Title Policy to
Buyer in respect to the Property.
IV.3.4. NO MATERIAL CHANGE. There shall be no material adverse
------------------
change in any of the items approved by Buyer during the Contingency Period,
including, without limitation, the physical condition of the Property and title
to the Property.
IV.3.5. TERMINATION OF AGREEMENTS. On the Closing Date, all
-------------------------
management and leasing agreements with respect to the Property shall be
terminated and Seller shall be solely responsible for any termination fees due
to the present property manager. In addition, Seller shall deliver full releases
from any leasing agents for any and all commissions which may become payable
after the Closing Date with respect to any then existing lease whether currently
earned or payable by virtue of renewal or expansion options.
IV.3.6. DELIVERY OF LEASES/DOCUMENTS. Buyer shall have received
----------------------------
signed originals or copies, certified by Seller as being true and correct of all
leases and contracts, together with all exhibits thereto, and to the extent in
Seller's possession or reasonably obtainable all warranties, licenses, permits
and agreements, together with all exhibits thereto.
IV.4. SELLER'S CLOSING CONDITIONS. The following conditions are for the
---------------------------
benefit of Seller and are conditions to the Closing, unless expressly waived by
Seller on or before the Closing Date:
IV.4.1. SIMULTANEOUS CLOSING. The Closing shall be contingent
--------------------
upon the simultaneous closing of the Additional Properties, pursuant to the
terms and conditions of the Additional Property Agreements, with the exception
of the transaction contemplated by the Tract A Agreement.
IV.5. FAILURE OF CONDITION TO CLOSE TO ESCROW. In the event any of the
---------------------------------------
conditions set forth in ARTICLE IV are not timely satisfied or waived by the
appropriate party benefitting by the conditions in question, for a reason other
than the default of Buyer, this Agreement shall, at the option of the party
benefitting by the conditions in question, terminate, the Xxxxxxx Money shall be
returned to Buyer and, except as otherwise provided herein, the parties shall
have no further obligations hereunder.
ARTICLE V.
CLOSING AND ESCROW
------------------
V.1. DEPOSIT WITH THE TITLE COMPANY AND ESCROW INSTRUCTIONS. Upon
------------------------------------------------------
execution of this Agreement, the parties hereto shall deposit one duplicate
original of this Agreement
11
with the Title Company and this instrument shall serve as the instructions to
the Title Company for consummation of the purchase and sale contemplated hereby.
Seller and Buyer agree to execute such 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.
V.2. CLOSING.
-------
V.2.1. The closing hereunder ("CLOSING") shall be held at the
offices of the Title Company. The execution and exchange of documents shall take
place at the Closing on or before the twentieth (20th) day following the
expiration of the Contingency Period ("CLOSING DATE"). Such date may not be
otherwise extended without the written approval of both Seller and Buyer.
V.2.2. In the event the Closing does not occur on or before the
Closing Date, the Title Company shall, unless it is notified by both parties to
the contrary within ten (10) days after the Closing Date, return to the
depositor thereof all documents which may have been deposited hereunder.
V.3. DELIVERY BY SELLER TO THE TITLE COMPANY. Prior to the Closing Date,
---------------------------------------
Seller shall deliver to the Title Company:
(a The Deed, duly executed and acknowledged by Seller, in
recordable form, and ready for recordation on the Closing Date;
(b A certification duly executed by Seller under penalty of
perjury in the form of, and upon the terms set forth in, the Transferor's
Certification of Non-Foreign Status ("FIRPTA CERTIFICATE"), setting forth
Seller's address and federal tax identification number and certifying that
Seller is a "United States Person" and that Seller is not a "foreign person" in
accordance with and/or for the purpose of the provisions of Section 7701 and
1445 (as may be amended) of the Internal Revenue Code of 1954, as amended, and
any regulations promulgated thereunder. The FIRPTA Certificate shall be in the
form attached hereto as EXHIBIT "H";
-----------
(c An Assignment of Rights, Leases and Security Deposits
("ASSIGNMENT OF LEASES"), in the form of EXHIBIT "I" duly executed by Seller, by
-----------
which Seller shall assign to Buyer all of Seller's interest in the Leases,
together with the interest of Seller in security deposits collected and held by
Seller to secure the performance of the duties and obligations of tenant under
the Leases;
12
V.4. DELIVERY BY SELLER TO BUYER. On or before the Closing Date, Seller
---------------------------
shall deliver to the Title Company, for ultimate delivery to Buyer, the
following:
(a The Xxxx of Sale duly executed by Seller;
(b The Rent Roll, certified by Seller and current as of the
Closing Date;
(c A schedule of Service Contracts current as of the Closing
Date;
(d Tenant Estoppel Certificates from those tenants specified
pursuant to SECTION 4.2.1, to the extent not previously delivered to Buyer.
(e Originals or copies, certified by Seller as being true and
correct, of all Leases, together with all exhibits thereto;
(f Originals of all Service Contracts and any unexpired
warranties or guaranties received by Seller from any contractors,
subcontractors, suppliers or materialmen in connection with any construction,
repair or alteration of the Improvements or any tenant improvements;
(g All instruction manuals, procedure manuals, manufacturer's
warranties and similar materials in Seller's possession which relate to the
Property;
(h Notices to tenants under the Leases, in the form of EXHIBIT
-------
"J" attached hereto, duly executed by Seller;
---
(i All keys to the Property;
(j Such resolutions, authorizations, bylaws or other corporate
and/or partnership documents or agreements relating to Seller as shall be
reasonably required by the Title Company in connection with this transaction;
and
(k Any other documents, instruments, data, records,
correspondence or agreements called for hereunder which have not previously been
delivered.
The matters described in subparagraphs (e), (f), (g) and (i) shall be delivered
by making them available at the office of the property manager for the Property.
V.5. DELIVERY BY BUYER TO THE TITLE COMPANY. On or before the Closing
--------------------------------------
Date, Buyer shall deliver to the Title Company, for ultimate delivery to Seller:
(a) The Purchase Price described in SECTION 2.1, plus any
additional sums necessary, if any, for Buyer to pay its costs, expenses and
prorations pursuant to this ARTICLE V; and
(b) The Assignment of Leases, duly executed in recordable form by
Buyer.
13
V.6. OTHER INSTRUMENTS. Seller and Buyer shall each deliver such other
-----------------
instruments as are reasonably required by the Title Company or otherwise
required to close the escrow and consummate the purchase of the Property in
accordance with the terms hereof.
V.7. CLOSE OF ESCROW. Provided that (a) the Title Company has
---------------
received all required documents, instruments and funds, (b) the Title Company
has not received written notice from either Buyer or Seller that any of the
conditions to Closing set forth in ARTICLE IV have not been satisfied or waived,
(c) any of the representations and warranties made by either Buyer or Seller are
untrue either as of the Closing Date and (d) the Title Company is able to
deliver to Buyer the Title Policy described in SECTION 3.1.1 hereof, the Title
Company is authorized and instructed on the Closing Date to:
(a Record the Deed and the Assignment of Leases with the
Sacramento County Recorder; and
(b Deliver to Seller the sum described in SECTION 2.1 to Seller,
less Seller's share of prorations and costs of escrow. The Title Company is
instructed to request that the amount of the Documentary Transfer Tax due be
shown on a separate paper and affixed to the Deed by the County Recorder after
the permanent record is made.
V.8. PRORATIONS AND APPORTIONMENTS.
-----------------------------
V.8.1. All revenues and all expenses of the Property shall be
prorated and apportioned as of 12:01 a.m. on the Closing Date, so that Seller
shall bear all expenses with respect to the Property and shall have the benefit
of all income with respect to the Property through and including the period
preceding the Closing Date. Any revenue or expense amount which cannot be
ascertained with certainty as of the Closing Date shall be prorated on the basis
of the parties' reasonable estimates of such amount (other than reimbursements
for operating expenses not billed currently to tenants) and shall be the subject
of a final proration thirty (30) days after the Closing Date or as soon
thereafter as the precise amounts can be ascertained. A statement setting forth
such agreed prorations shall be delivered to the Title Company. The Title
Company shall not be required to calculate any prorations.
V.8.2. Prepaid rents under the Leases shall be credited to Buyer.
Amounts for free rents, concessions, lease takeovers and similar matters not
previously paid or satisfied prior to the Closing Date shall be credited to
Buyer. Rents in arrears will not be prorated, but will be paid to Seller by
Buyer when collected by Buyer, such payment to occur every thirty (30) days
following the Closing Date. Except as expressly provided for in SECTION 5.10
below, the first monies received by Buyer from each tenant after the Closing
Date shall be applied first to current rents and other sums due and thereafter
shall be applied to rent in arrears.
V.8.3. Expenses to be prorated shall include taxes (other than
personal property taxes on Personal Property), payments under any Service
Contracts (provided that
14
any delinquent payments owing to Seller shall be treated in the same manner as
delinquent rents), gas, electricity and other utility charges, any unfixed meter
charges, if any (apportioned on the basis of the last meter reading), license
and permit fees and other expenses customarily prorated. If possible, in lieu of
prorating, utilities and other expenses shall be contracted for in the name of
Buyer as of the Closing Date, with Seller being responsible directly to the
utility provider and others for accrued and unpaid expenses. No prorations in
respect to personal property taxes on Personal Property based upon Seller's
warranty that no personal property taxes have been assessed against the Personal
Property for the previous five (5) years.
V.9. COMPUTATION OF CERTAIN PRORATIONS. Final proration of percentage
---------------------------------
rents and similar apportionable items which are dependent for their calculation
upon the economic performance of the Property (or a portion thereof) over a
specified interval of time shall be accomplished as follows:
(a The parties shall await the expiration of the specified
interval to determine the gross rents, gross receipts and other economic
performance over the entire interval and then prorate the item by allocating to
Seller the product of the rents or other similar apportionable item for the
entire interval multiplied by a fraction, the numerator of which is the number
of days within the specified interval which occur before the Closing Date and
the denominator of which is the number of days in the specified interval.
(b Operating expenses which are payable (or reimbursable) by any
present or past tenant of the Property or any portion thereof, shall not be
prorated hereunder. Buyer shall send customary statements for reimbursement of
operating expenses and taxes to tenants under the Leases after consulting with
Seller with respect to appropriate amounts due therefore, and shall remit to
Seller, upon receipt, Seller's prorated share thereof, determined as provided in
SECTION 5.9(a) above, to the extent Seller has previously paid or been charged
for the expenses relating to such reimbursement.
V.10. ARREARAGE. Seller reserves all claims and causes of action against
---------
tenants and others who are in arrears or who shall be obligated to pay monies in
the future which are for the benefit of Seller, and Buyer shall provide its
reasonable cooperation to Seller in pursuing such arrearage. Buyer shall use
reasonable efforts to collect all sums in arrears as of the closing Date due to
Seller, but shall not be required to commence or prosecute any litigation.
Seller may not commence and prosecute litigation against any tenant for rents in
arrears as long as such tenant remains a tenant of the Property, unless the
statute of limitations will expire within the succeeding sixty (60) day period.
To the extent that Buyer receives payments from tenants for sums due prior to
the Closing Date, which can be verified based upon invoices or other applicable
xxxxxxxx, such payments, including rents, shall be promptly remitted by Buyer to
Seller.
V.11. PAYMENT OF ADJUSTMENTS TO PRORATION. Either party owing the other
-----------------------------------
party a sum of money based on adjustments made to prorations after the Closing
Date shall promptly pay that sum to the other party, together with interest
thereon at the rate of ten percent (10%) per annum to the date of payment if
payment is not made within ten (10) days after mutual agreement of the amount
due.
15
V.12. COSTS AND EXPENSES. Seller shall pay the costs associated with
------------------
the issuance of a California Land Title Association Owner's Policy of Title
Insurance in the full amount of the Purchase Price, the UCC and litigation
searches, documentary stamp taxes, recording fees, transfer taxes, escrow fees
and all costs incurred to repay any liens. Buyer shall pay the incremental
increase in costs relating to ALTA coverage, the costs of all endorsements
thereto and the cost of the Survey. Seller and Buyer shall each pay the fees
and expenses of their respective legal counsel incurred in connection with the
transaction.
ARTICLE VI.
REPRESENTATIONS AND WARRANTIES OF SELLER
----------------------------------------
As an inducement to Buyer to enter into this Agreement, Seller hereby
represents and warrants to and agrees with Buyer as follows:
VI.1. AUTHORITY OF SELLER. Seller is a California limited partnership,
-------------------
duly organized and validly existing and in good standing under the laws of the
State of California, and has the authority to own and convey the Property, and
execute this Agreement. All documents executed by Seller which are to be
delivered to Buyer at the Closing are or at the time of Closing will be duly
authorized, executed and delivered by Seller and do not and at the time of
Closing will not violate any provisions of any agreement or judicial order to
which Seller is a party or to which Seller or the Property is subject.
VI.2. CONDITION OF PROPERTY. To Seller's Knowledge, as hereinafter
---------------------
defined, there are no material physical or mechanical defects in the Property,
including, without limitation, the elevators, escalators, plumbing, heating, air
conditioning, ventilating, life safety and electrical systems, and to Seller's
Knowledge, all such items are in good operating condition and repair and are in
compliance with all applicable governmental laws, ordinances, regulations and
requirements, other than compliance with the requirements of the Americans With
Disabilities Act, with respect to which, Seller has commenced compliance in
accordance with the requirements thereof.
VI.3. USE AND OPERATION. To Seller's Knowledge, the use and operation of
-----------------
the Property are in full compliance with applicable building codes, safety and
fire, environmental, zoning and land use laws, and other applicable local, state
and federal laws, ordinances, regulations and requirements, other than
compliance with the requirements of the Americans With Disabilities Act, with
respect to which Seller has commenced compliance in accordance with the
requirements thereof.
VI.4. LAND USE REGULATIONS. To Seller's Knowledge, there are no
--------------------
condemnation, environmental, zoning or other land use regulation proceedings,
either instituted, or planned to be instituted, which could detrimentally affect
the use or operation of the Property of its
16
intended purpose or the value of the Property, nor has Seller received notice of
any special assessment proceedings affecting the Property.
VI.5. LEASES. To Seller's Knowledge, the copies of the Leases to be made
------
available to Buyer pursuant to SECTION 4.1.2 are true and correct copies of all
Leases affecting the Property and are in full force and effect and there are no
other agreements, written or oral, with respect to the tenancies, except
subleases permitted by the respective Leases. To Seller's Knowledge:
(a) The information set forth in the Rent Roll is true and
complete as of the date such Rent Roll was made available to Buyer and there are
no leases of space in the Improvements and nonmaterial defaults under any of the
Leases which have not been disclosed to Buyer in writing.
(b) No tenant under any of the Leases has prepaid any rent or
other charges for more than the current month, except as disclosed to Buyer in
writing.
(c) No tenant under any of the Leases has any right or option to
purchase the Property or any portion thereof or interest therein, and there are
no outstanding agreements of sale with respect to the Property or any portion
thereof or any interest therein.
(d) Except as provided in the Leases and the Rent Roll, no tenant
under any of the Leases has the right to renew or extend any of the Leases or
has any options or rights of first refusal with respect to leasing of other
space, and no tenant under any of the Leases has the right to free rent, rebate,
allowance, concession, security or other deposit.
VI.6. BROKERAGE COMMISSIONS. Except as set forth in the Rent Roll or
---------------------
otherwise disclosed to Buyer in writing, there are no commissions, finder's fees
or other compensation owing or which may become owing to any broker or any other
person or entity with respect to any Lease or occupancy agreement including,
without limitation, any such compensation with respect to any future renewals,
extensions or expansions thereof.
VI.7. LITIGATION. Except as disclosed to Buyer in writing, there is no
----------
litigation pending or, to Seller's Knowledge, threatened, against Seller or any
basis therefor that arises out of the ownership of the Property or that might
detrimentally affect the use or operation of the Property for its intended
purpose or the value of the Property or adversely affect the ability of Seller
to perform its obligations under this Agreement, other than pending litigation
with the First Lien Holder in connection with its foreclosure proceedings.
VI.8. USE AND OPERATION OF PROPERTY. To Seller's Knowledge, Seller knows
-----------------------------
of no facts which would prevent Buyer from using and operating the Property
after Closing in the manner in which the Property has been used, leased and
operated prior to the date hereof.
VI.9. OTHER RIGHTS. No other person presently has a right of first
------------
refusal or other right to purchase or finance all or any part of the Property.
In consideration of Buyer's execution and delivery of this Agreement, Seller
agrees that so long as this Agreement has not
17
been terminated or expired, Seller will not negotiate or otherwise pursue any
offers on the Property nor execute any other letter of intent or contract for
the financing, sale or purchase of the Property.
VI.10. EMPLOYEES. Seller has no employees. There are no employees of
---------
Seller's agent (including the property manager) engaged in the operation or
maintenance of the Property for whom Buyer will be responsible after the Closing
Date unless Buyer agrees to employ such employees after the Closing Date.
VI.11. ENVIRONMENTAL. To Seller's Knowledge, the Property is not in
-------------
violation of any federal, state, local or administrative agency ordinance, law,
rule, regulation, order or requirement relating to environmental conditions or
Hazardous Material ("ENVIRONMENTAL LAWS"). Neither Seller, nor to Seller's
------------------
Knowledge, any third party, has (a) used, manufactured, generated, treated,
stored, disposed of, or released any Hazardous Material on, under or about the
Property or transported any Hazardous Material over the Property in violation of
the Environmental Laws, or (b) installed, used or removed any storage tank on,
from or in connection with the Property except in full compliance with all
Environmental Laws. To Seller's Knowledge, there are no storage tanks or xxxxx
(whether existing or abandoned) located on, under or about the Property. To
Seller's Knowledge, the Property does not consist of any building materials that
contain Hazardous Material. For the purposes hereof, "HAZARDOUS MATERIAL" shall
mean any substance, chemical, waste or other material which is listed, defined
or otherwise identified as "hazardous" or "toxic" under any federal, state,
local or administrative agency ordinance or law.
VI.12. "AS-IS" SALE.
------------
(a) Except as set forth above, Buyer acknowledges that Seller makes no
representation or warranty, either express or implied, with respect to the
Property, its present condition or its fitness or suitability for any particular
purpose. In this respect, Buyer confirms that it is relying solely upon its
investigation of the condition of the Property, its title and all governmental
laws and ordinances which might affect its use and development. With the
exception of matters which Seller has affirmatively represented, actively
concealed or fraudulently represented at the time of sale and with the exception
of the warranties contained in the conveyance documents to be executed and
delivered by Buyer, Buyer hereby releases and forever discharges Seller, its
partners, employees and agents from any and all claims, rights, remedies and
causes of action of any nature or sort, known or unknown, past, present or
future, which Buyer may have arising out of the condition of the Property after
the Closing Date.
(b) Buyer expressly waives the benefits and provisions of Section 1542
of the Civil Code of the State of California, and any similar law of any state
or territory of the United States or other jurisdiction. Civil Code Section 1542
provides as follow:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE
18
TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY
AFFECTED HIS SETTLEMENT WITH DEBTOR."
Initials of Buyer ___________________
VI.13. SELLER'S KNOWLEDGE. The term "TO SELLER'S KNOWLEDGE," or variations
------------------
thereof, means the actual, present knowledge of the individual general partners
of Seller, without any duty of inquiry or investigation, other than Seller's
obligation to make inquiry of its managing agent KCS Properties, Inc. in an
effort to determine that the employees of KCS Properties, Inc. responsible for
the day-to-day operation of the Property are not aware of any fact or
circumstance that would make any representation or warranty of Seller untrue in
any material respect.
VI.14. SURVIVAL. The representations and warranties of Seller contained
--------
herein shall survive the Closing Date, but shall terminate one (1) year after
the Closing Date. No liability shall arise thereunder unless suit shall be
filed against Seller as to the specific claim within such one (1) year period.
VI.15. SUBSEQUENT DISCLOSURES. In the event Buyer, prior to the Closing
----------------------
Date, becomes aware, from Seller or otherwise, of any inaccuracy in the
disclosures, information or representations previously provided to Buyer, which
will have a material, adverse effect on Buyer, Buyer may either (i) terminate
this transaction contemplated hereby, receive a refund of the applicable portion
of the Deposit, and to the extent available pursue any rights or claims that
Buyer may have against Seller as a result of any inaccuracy in the disclosures,
information or representations previously provided to Buyer or (ii) proceed with
the Closing, thereby waiving any rights that Buyer may have against Seller as a
result of any inaccuracy in the disclosures, information or representations
previously provided to Buyer. In no event shall Buyer be entitled to complete
the Closing hereunder and then bring an action against Seller for damages as a
result of any inaccuracy in the disclosures, information or representations
previously provided to Buyer.
ARTICLE VII.
REPRESENTATIONS AND WARRANTIES OF BUYER
---------------------------------------
Buyer hereby represents and warrants to Seller as follows:
VII.1. AUTHORITY OF BUYER. Buyer is duly organized and validly existing
------------------
under the laws of the State of Delaware and is in good standing and authorized
to do business under the laws of the State of California; this Agreement and all
documents executed by Buyer, which are to be delivered to Seller at the Closing
are or at the time of Closing will be (a) duly authorized, executed, and
delivered by Buyer, (b) be legal, valid, and binding obligations of Buyer, and
(c) not violate any provisions of any agreement or judicial order to which Buyer
is a party or to which it is subject.
19
VII.2. LITIGATION. There is no litigation pending or, to Buyer's
----------
knowledge, threatened, against Buyer or any basis therefor before any court or
administrative agency which might result in any material adverse change in the
business or financial condition of the Buyer.
ARTICLE VIII.
COVENANTS
---------
As matters as to which the Title Company need not be concerned, Seller and
Buyer covenant and agree with one another as follows:
VIII.1. INDEMNIFICATION BY SELLER. Seller hereby agrees to indemnify Buyer
-------------------------
and hold Buyer harmless from and against any and all claims, demands,
liabilities, liens, costs, expenses, penalties, damages and losses, including,
without limitation, reasonable attorneys' fees and costs suffered by Buyer as a
direct or indirect result of:
(a) Any misrepresentation or breach of warranty or breach of
covenant made by Seller in this Agreement or any document, certificate, or
exhibit given or delivered to Buyer pursuant to or in connection with this
Agreement; and
(b) Any and all obligations, liabilities, claims, liens or
encumbrances, whether direct, contingent or consequential and no matter how
arising, and in any way related to the Property and arising or occurring before
the Closing Date, or in any way related to or arising from any act, conduct,
omission, contract or commitment of Seller (or any of its agents or employees)
at any time or times before the Closing Date.
The provisions of this Section shall survive the execution and delivery of this
Agreement, the delivery of the Deed and transfer of title.
VIII.2. INDEMNIFICATION BY BUYER. Buyer hereby agrees to indemnify Seller
------------------------
and hold Seller harmless from and against any and all claims, demands,
liabilities, liens, costs, expenses, penalties, damages and losses, including,
without limitation, reasonable attorneys' fees and costs suffered by Seller as a
direct or indirect result of:
(a) Any misrepresentation or breach of warranty or breach of
covenant made by Buyer in this Agreement or any document, certificate, or
exhibit given or delivered to Seller pursuant to or in connection with this
Agreement; and
(b) Any and all obligations, liabilities, claims, liens or
encumbrances, whether direct, contingent or consequential and no matter how
arising, and in any way related to the Property and arising or occurring after
the Closing Date, or in any way related to or arising from any act, conduct,
omission, contract or commitment of Buyer (or any of its agents or employees) at
any time or times after the Closing Date.
20
The provisions of this Section shall survive the execution and delivery of this
Agreement, the delivery of the Deed and transfer of title.
VIII.3. MAINTENANCE. Seller shall, between the Seller's execution of this
-----------
Agreement and the Closing Date, at Seller's sole cost and expense, maintain the
Property in its present order, condition and repair, reasonable wear and tear
excepted, shall perform all work required to be done by the landlord under the
terms of any lease affecting the Property, and shall make all repairs,
maintenance and replacements of the Improvements and any Personal Property and
otherwise operate the Property in the same manner as before the making of this
Agreement, the same as though Seller were retaining the Property.
VIII.4. LEASES AND OTHER AGREEMENTS.
---------------------------
(a) Except as provided below, Seller covenants and agrees that during
the term of this Agreement, Seller or its agents shall not amend or modify any
Lease and shall not enter into any new Lease, for any portion of the Property,
without Buyer's prior written approval. Seller's request for approval of any
such new or modified Lease shall be accompanied by the estimated cost of any
tenant improvements associated therewith and the amount of the real estate
commission to be paid in conjunction therewith. In the event that Buyer approves
any new or modified Lease, upon the Closing Date, Buyer shall be responsible for
the cost of the tenant improvements and the real estate commissions associated
therewith prorated in an amount proportional to the amount of rent paid
thereunder before and after the Closing Date. Buyer shall pay Seller on the
Closing Date for any costs that Seller has incurred for the tenant improvements
and real estate commissions in excess of its pro-rata share. Upon the Closing
Date, all tenant improvement construction contracts and brokerage agreements on
such Leases shall be assigned to and assumed by Buyer.
(b) Notwithstanding the provisions of subparagraph (a) above, Buyer
approves the terms and conditions of a lease proposal to the State of California
set forth on EXHIBIT "L" attached hereto and made a part hereof for all
purposes and Buyer shall accept a lease or leases with the State of California
in the event it agrees to enter into a lease or leases in accordance with such
terms, subject to the approval of the form of lease by Buyer, which approval
shall not be unreasonably withheld.
VIII.5. RETURN OF INFORMATION. In the event that Buyer does not purchase
---------------------
the Property, Buyer shall promptly return to Seller all information delivered by
Seller to Buyer in conjunction with this transaction.
VIII.6. CONFIDENTIALITY. Except as hereinafter provided, from and after
---------------
the execution of this Agreement, Buyer and Seller shall keep the terms,
conditions and provisions of this Agreement confidential and neither shall make
any public announcements hereof unless the other first approves of same in
writing, nor shall either disclose the terms, conditions and provisions hereof,
or of any data regarding the Property, except to persons who "need to know",
such as their respective officers, directors, employees, attorneys, accountants,
engineers, surveyors, consultants, property managers, financiers, partners,
investors, potential
21
lessees and bankers and such other third parties whose assistance is required in
connection with the consummation of this transaction. Notwithstanding the
foregoing, it is acknowledged that Buyer is an affiliate of, a real estate
investment trust (the "REIT") and the REIT has and will seek to sell shares to
the general public; consequently, Buyer shall have the absolute and unbridled
right to disclose any information regarding the transaction contemplated by this
Agreement required by law or as determined to be necessary or appropriate by
Buyer or Buyer's attorneys to satisfy disclosure and reporting obligations of
Buyer, the REIT, or its affiliates. After Closing, Buyer shall be free to
disclose previously confidential information in its sole, unfettered discretion.
VIII.7. TAX DEFERRED EXCHANGE. Buyer acknowledges that Seller may desire
---------------------
to structure the sale of the Property as an exchange for like-kind property
under Section 1031 of the Internal Revenue Code of 1986 in order to defer
recognition of income on the disposition of the Property and/or other
properties. Buyer agrees to reasonably cooperate with Seller to accomplish such
exchange and Seller hereby agrees that any and all costs associated with said
exchange shall be borne solely by Seller and shall in no way be attributable to
Buyer. Buyer shall not be requested or required to take title to other property
in conjunction with such exchange.
VIII.8. TESTING SAMPLES. Any testing samples taken from the Property
---------------
during any inspection pursuant to this Agreement shall be divided and shared
with Seller. In the event that any test results or reports contain negative
information concerning the Property, Buyer shall promptly furnish Seller with
written correspondence summarizing the negative information including the name
and address of the consultant who discovered or learned of such information.
VIII.9. TERMINATION OF AGREEMENT. On the Closing Date, all management and
------------------------
leasing agreements with respect to the Property shall be terminated and Seller
shall be solely responsible for any termination fees due. In addition, Seller
shall deliver full releases from any leasing agents for any and all commissions
which may become payable after the Closing Date with respect to any then
existing lease whether currently earned or payable by virtue of renewal or
expansion options. Seller shall also terminate all Service Contracts which
Buyer fails to elect to assume, such election to be made prior to the expiration
of the Contingency Period.
VIII.10. TRANSFER TAX ON WORKS OF ART. In the event that any transfer
----------------------------
tax is due or payable on the Works of Art pursuant to Section 982 of the
California Civil Code, Seller agrees to pay such tax to the artist in
conjunction with such transfer.
VIII.11. CHANGES BEFORE CLOSING. In the event that any of the
----------------------
representations or warranties by either party contained herein change or become
untrue prior to the Closing Date, such party agrees to notify the other party of
such change or untruthfulness promptly upon learning of such matter.
VIII.12. INDEPENDENT AUDIT. Promptly following the execution of this
-----------------
Agreement, Seller shall provide and shall cause its management company to
provide to Buyer's
22
representatives and independent accounting firm access to financial and other
information relating to the Property in the possession of or otherwise available
to Seller, its affiliates or Seller's management company which would be
sufficient to enable Buyer's representatives and independent accounting firm to
prepare audited financial statements for the year 1996 and the year to date in
conformity with generally accepted accounting principles and to enable them to
prepare such statements, reports or disclosures as Buyer may deem necessary or
advisable. Seller shall also provide and/or shall cause its management company
to provide to Buyer's independent accounting firm a signed representation letter
which would be sufficient to enable an independent public accountant to render
an opinion on the financial statements related to the Property. Seller shall
authorize and shall cause its management company to authorize any attorneys who
have represented Seller or its management company in material litigation
pertaining to or affecting the Property to respond, at Buyer's expense, to
inquiries from Buyer's representatives and independent accounting firm. If and
to the extent Seller's financial statements pertaining to the Property for any
periods during the year 1996 and the year to date have been audited, promptly
after the execution of this Agreement Seller shall provide Buyer with copies of
such audited financial statements and shall cooperate with Buyer's
representatives and independent public accountants to enable them to contact the
auditors who prepared such audited financial statements and to obtain, at
Buyer's expense, a reissuance of such audited financial statements. To the
extent that Seller or its agents incur reasonable expenses in connection with
the performance of such audit, Buyer shall reimburse Seller and its agents for
such reasonable expenses.
ARTICLE IX.
LOSS BY FIRE OR OTHER CASUALTY; CONDEMNATION
--------------------------------------------
IX.1. DAMAGE OR DESTRUCTION.
---------------------
IX.1.1. In the event that the Improvements are damaged or destroyed
by fire or other casualty prior to the Closing Date and such damage or
destruction is estimated to cost Two Hundred Fifty Thousand and No/100 Dollars
($250,000.00) or less in the aggregate to repair or replace (as verified by an
architect or contractor reasonably selected by Buyer) then the Closing Date
shall occur as scheduled notwithstanding such damage or destruction and Seller
shall pay to Buyer an amount sufficient to restore or repair such damage
(retaining the right to any claim Seller may have against any insurance
carrier).
IX.1.2. In the event that any of the Improvements are damaged or
destroyed by fire or other casualty prior to the Closing Date, and such damage
or destruction is estimated to cost more than Two Hundred Fifty Thousand and
No/100 Dollars ($250,000.00) in the aggregate to repair or replace (as verified
by an architect or contractor reasonably selected by
23
Buyer), then either Seller or Buyer shall have the option to (i) terminate this
Agreement by written notice to Seller within fifteen (15) days after the
occurrence of the damage or destruction and the Xxxxxxx Money shall be
immediately returned to Buyer or (ii) consummate the transaction contemplated
hereby in which event Seller's insurance proceeds shall be transferred and
assigned to Buyer, with Seller remaining responsible for any deductible.
IX.2. CONDEMNATION. In the event that, prior to the Closing Date, a
------------
governmental entity shall commence any eminent domain proceeding to take any
material portion of the Property, then Buyer shall have the option to elect
either of the following:
(a) Terminate this Agreement by written notice to Seller within
fifteen (15) days of its receiving notice of such action of condemnation and the
Xxxxxxx Money shall be immediately returned to Buyer; or
(b) Elect to proceed with the transaction in which case the
Purchase Price shall not be reduced and Buyer shall be entitled to the net award
paid to Seller or Seller's mortgagee for such taking, if any, and Seller shall
assign and transfer to Buyer all right, title and interest in and to any awards,
it being expressly agreed that in such event Seller shall have no obligation to
repair or restore the Property or any portion thereof.
ARTICLE X.
DEFAULTS
--------
X.1. BUYER'S DEFAULT; SELLER'S REMEDIES. Buyer shall be deemed to be in
----------------------------------
default if, in respect to the transaction contemplated by this Agreement, at the
Closing, Buyer fails to deliver the Purchase Price or Buyer fails to meet,
comply with, or perform any covenant, agreement or obligation on the part of
Buyer within the time frames and in the manner required in this Agreement, for
any reason other than a default by Seller hereunder or termination of this
Agreement prior to Closing in accordance with the express terms and conditions
hereof. Seller's remedies shall be limited to the remedies set forth in
SECTION 2.4 hereof. Any default by Buyer hereunder shall be deemed a default
under each of the Additional Property Agreements.
X.2. SELLER'S DEFAULTS; BUYER'S REMEDIES.
-----------------------------------
X.2.1. SELLER'S DEFAULTS. Seller shall be deemed to be in
------------------
default under this Agreement, if in respect to the transaction contemplated by
this Agreement, on or before the Closing, Seller shall have failed to meet,
comply with, or perform any covenant, agreement, or obligation on its part
required in this Agreement, within the time limits and in the manner required in
this Agreement, for any reason other than a default by Buyer hereunder or
termination of this Agreement prior to Closing pursuant to the express terms and
conditions hereof.
24
X.2.2. BUYER'S REMEDIES. If Seller is deemed to be in default
-----------------
hereunder, Buyer may, at Buyer's option, do either one of the following:
(a) Terminate this Agreement by written notice delivered
to Seller on or before ten (10) days following occurrence of such default;
(b) Seek and receive specific performance of Seller's
obligations hereunder to sell the Property for the Purchase Price and on
the terms set forth herein following the expiration of a five (5) day
period following the delivery of a written notice to Seller specifying the
default in question unless specific performance is not an available remedy
because Seller has voluntarily conveyed or encumbered the Property, in
which event Buyer may recover damages from Seller for any losses or costs
suffered by Buyer in connection with Seller's failure to perform its
obligations hereunder following the expiration of a five (5) day period
following the delivery of a written notice to Seller specifying the default
in question.
ARTICLE XI.
MISCELLANEOUS
-------------
XI.1. NOTICES. All notices or other communications required or permitted
-------
hereunder shall be in writing, and shall be personally delivered or sent by
registered or certified mail, postage prepaid, return receipt requested, or sent
by electronic facsimile and shall be deemed received upon the earlier of (i) if
personally delivered, the date of delivery to the address of the person to
receive such notice, (ii) if mailed, on the date of posting by the United States
Post Office, or (iii) if given by electronic facsimile, when received by the
other party.
If to Seller: 2525 Natomas Investors
c/o Kelly Broadcasting
0 Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
with a copy to: KCS Properties, Inc.
0000 Xxxxx Xxxx Xxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
25
with a copy to: Xxxxx-Xxxxxxx Associates
0000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
with a copy to: Xxxxxxx Xxxxxxxxx
000 Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esquire
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
If to Buyer: Xxxxxxxx Properties Acquisition Partners, L.P.
0000 Xxxx Xxxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxx X. Xxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
with copies to: Xxxxx, Brannian & Xxxxx
0000 Xxxxx Xxxxxxx Xxxxxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxxx X. Xxxxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
If to the Title Company: First American Title Insurance Company
0000 XXX Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xx. Xxxxxxxxxx X. Xxx
Telephone No.: (000) 000-0000
Facsimile No.: (000 000-0000
with copies to: First American Title Insurance Company
0000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xx. Xxxx Xxxxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
or such other address as either party may from time to time specify in writing
to the other in the manner aforesaid.
26
XI.2. BROKERS AND FINDERS. Buyer and Seller each represent and warrant to
-------------------
the other that neither has employed any real estate agent, brokerage or finder
in connection with this transaction. In the event of a claim or broker's fee,
finder's fee, commission or other similar compensation in connection herewith,
Buyer, if such claim is based upon any agreement alleged to have been made by
Buyer, hereby agrees to indemnify and hold Seller harmless against any and all
liability, loss, cost, damage or expense (including reasonable attorneys' fees
and costs) which Seller may sustain or incur by reason of such claim, and
Seller, if such claim is based upon any agreement alleged to have been made by
Seller, hereby agrees to indemnify and hold Buyer harmless against any and all
liability, loss, cost, damage or expense (including reasonable attorneys' fees
and costs) which Buyer may sustain or incur by reason of such claim. The
provisions of this SECTION 11.2 shall survive the Closing.
XI.3. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
----------------------
shall inure to the benefit of the permitted successors and assigns of the
parties hereto.
XI.4. AMENDMENTS. This Agreement may be amended or modified only by a
----------
written instrument executed by the party asserted to be bound thereby.
XI.5. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The covenants,
------------------------------------------
representations and warranties made by each party herein shall survive the
Closing for a period of one (1) year and shall not merge into the Grant Deed and
the recordation thereof in the Official Records of Sacramento County,
California.
XI.6. CONSTRUCTION. Headings at the beginning of each section and
------------
subsection are solely for the convenience of the parties and are not a part of
the Agreement. Whenever required by the context of this Agreement, the singular
shall include the plural and the masculine shall include the feminine and vice
versa. This Agreement shall not be construed as if it had been prepared by one
of the parties, but rather as if both parties had prepared the same. Unless
otherwise indicated, all references to paragraphs, sections, subparagraphs and
subsections are to this Agreement.
XI.7. GOVERNING LAW. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the State of California. Any actions filed by
either party involving the other party shall be venued in Sacramento County,
California.
XI.8. PRIOR AGREEMENTS. This Agreement (including all Exhibits attached
----------------
hereto) together with the Xxxxxxx Money Letter is the final expression of, and
contains the entire agreements between the parties with respect to the subject
matter hereof and supersedes all prior understandings with respect thereto.
This Agreement may not be modified, changed, supplemented, superseded, canceled
or terminated nor may any obligations hereunder be waived, except by written
instrument signed by the party to be charged or by its agent duly authorized in
writing or as otherwise expressly permitted herein. The parties do not intend
to confer any benefit hereunder on any person, firm or corporation other than
the parties hereto and lawful assignees.
27
XI.9. ATTORNEYS' FEES. In the event of the bringing of any action or suit
---------------
by a party hereto against another party hereunder by reason of any breach of any
of the covenants, agreements or provisions on the part of the other party
arising out of this Agreement, then in that event the prevailing party shall be
entitled to have and recover of and from the other party all costs and expenses
of the action or suit, including actual attorneys' fees, accounting and
engineering fees, and any other professional fees resulting therefrom.
XI.10. TIME OF THE ESSENCE. Seller and Buyer hereby acknowledge and agree
-------------------
that time is strictly of the essence with respect to each and every term,
condition, obligation and provision hereof and that failure to timely perform
any of the terms, conditions, obligations or provisions hereof by either party
shall constitute a material breach of and a non-curable (but waivable) default
under this Agreement by the party so failing to perform.
XI.11. RELATIONSHIP OF PARTIES. Nothing contained in this Agreement shall
-----------------------
be deemed or construed by the parties to create the relationship of principal
and agent, a partnership, joint venture or any other association between Buyer
and Seller.
XI.12. WAIVERS. No waiver of any breach of any covenant or provision herein
-------
contained shall be deemed a waiver of any preceding or succeeding breach
thereof, or of any other covenant or provision herein contained. No extension
of time for performance of any obligation or act shall be deemed an extension of
the time for performance of any other obligation or act except those of the
waiving party, which shall be extended by a period of time equal to the period
of the delay.
XI.13. PARTIAL INVALIDITY. If any term or provision of this Agreement or
------------------
the application thereof to any person or circumstance shall, to any extent, be
invalid or unenforceable, the remainder of this Agreement, or the application of
such term or provision to persons or circumstances other than those as to which
it is held invalid or unenforceable, shall not be affected thereby, and each
such term and provision of this Agreement shall be valid and be enforced to the
fullest extent permitted by law.
XI.14. CONDITION PRECEDENT/CONCURRENT. This Agreement shall only be valid
------------------------------
if Buyer and Seller simultaneously execute the Additional Property Agreements
and this Agreement. Any default by Buyer under the terms of the Additional
Property Agreements shall give Seller the right to declare a default under this
Agreement.
XI.15. DAYS OF WEEK/TIME. In the event the date on which Buyer or Seller is
-----------------
required to take any action under the terms of this Agreement is not a business
day, the action shall be taken on the next succeeding business day. All times
referenced herein are the times of day in Sacramento, California on the date in
question.
XI.16. EXHIBITS/RECITALS. All exhibits referred to in this Agreement are
-----------------
attached and incorporated by this reference. All of the Recitals set forth
above are true and correct.
XI.17. POSSESSION. Possession of the Property shall be delivered to Buyer
----------
on the Closing Date, subject to the rights of any tenants or subtenants in the
Property.
28
XI.18. ASSIGNMENT. Buyer shall not assign, transfer or convey its rights
----------
and/or obligations under this Agreement and/or with respect to the Property to
any other party without the prior written consent of Seller, which consent shall
not be unreasonably withheld or delayed. Notwithstanding the foregoing, Buyer
shall have the right to assign its rights under this Agreement to any affiliate
of Buyer.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
BUYER:
XXXXXXXX PROPERTIES ACQUISITION PARTNERS, L.P.,
a Delaware limited partnership
By: XXXXXXXX PROPERTIES I, INC., a Delaware
corporation, its sole general partner
By: /s/ XXXX X. XXXXX
----------------------------------------
Name: Xxxx X. Xxxxx
Title: Executive Vice President
SELLER:
2525 NATOMAS INVESTORS, a California limited
partnership
By: /s/ XXX X. XXXXX
---------------------------------------------
Name: Xxx X. Xxxxx
Title: Managing General Partner
29
The undersigned acknowledges receipt of this Agreement and agrees to act as
the Title Company hereunder.
FIRST AMERICAN TITLE INSURANCE COMPANY
By: /s/ XXXXXXXXXX X. XXX
-----------------------------------
Name: Xxxxxxxxxx X. Xxx
Title:
--------------------------------
30
EXHIBIT LIST
------------
Exhibit A Legal Description
Exhibit B Additional Properties
Exhibit C Grant Deed
Exhibit D Xxxx of Sale
Exhibit E Due Diligence Materials
Exhibit F Rent Roll
Exhibit G Tenant Estoppel
Exhibit H Transferor's Certification of Non-Foreign Status
Exhibit I Assignment of Rights, Leases and Security Deposits
Exhibit J Notices to Tenant
Exhibit K Works of Art
Exhibit L Description of State of California Lease Terms
31
EXHIBIT A
LEGAL DESCRIPTION
-----------------
The land is situated in the State of California, County of Sacramento, City of
Sacramento and is described as follows:
Parcel No. 3, as shown on that certain Parcel Map entitled "Portion of Xxx 000,
Xxxxxxx Xxxx Xxxx Subdivision, 17-B.M.-34 and portion of Tract 3 and 4, 2-R.S.-
48," recorded in BookE76 of Parcel Maps, Page 24, records of said County.
EXCEPTING THEREFROM all minerals, oil, gas and other hydrocarbon substances
lying below a depth of 500 feet from the surface of said land, without the right
of surface entry, as contained in the Deed recorded July 24, 1980 in Book 800724
of Official Records, at Page 597.
32
EXHIBIT B
ADDITIONAL PROPERTIES
---------------------
1740 Creekside Oaks Investors 0000 Xxxxxxxxx Xxxx Xxxxx, Xxxxxxxxxx, XX
1750 Creekside Oaks Investors 0000 Xxxxxxxxx Xxxx Xxxxx, Xxxxxxxxxx, XX
1760 Creekside Oaks Investors 0000 Xxxxxxxxx Xxxx Xxxxx, Xxxxxxxxxx, XX
2495 Natomas Investors 0000 Xxxxxxx Xxxx Xxxxx, Xxxxxxxxxx, XX
River City Bank 0000 Xxxxxxx Xxxx Xxxxx, Xxxxxxxxxx, XX
Xxxxxx Investors Tract A, Natomas Center, Sacramento, CA
Natomas Investors et al Tract D, Natomas Center, Sacramento, CA
33
EXHIBIT C
GRANT DEED
----------
RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:
MAIL TAX STATEMENTS TO:
GRANT DEED
----------
FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged,
_______________, a _______________________ ("GRANTOR"), hereby grants to
____________________, a _______________________ ("GRANTEE"), that certain real
property ("LAND") located in the City of Sacramento, County of Sacramento, State
of California, more particularly described in Exhibit A attached hereto together
---------
with all right, title and interest of Grantor in and to all buildings and
improvements now located or hereafter constructed on the Land.
Grantor hereby further grants to Grantee all of Grantor's right, title and
interest in and to all easements, privileges and rights appurtenant to the real
property and pertaining or held and enjoyed in connection therewith and all of
Grantor's right, title and interest in and to any land lying in the bed of any
street, alley, road or avenue to the centerline thereof in front of or adjoining
the Land.
IN WITNESS WHEREOF, Grantor has executed this Grant Deed as of
______________, 19__.
--------------------------------
By:
-----------------------------
34
SEPARATE STATEMENT OF
DOCUMENTARY TRANSFER TAX
County Recorder
Sacramento County
Sacramento, California
Dear Sir:
In accordance with Revenue and Taxation Code Section 11932, it is required
that this statement of documentary transfer tax due should not be recorded with
the attached Deed, but be affixed to the Deed after recordation and before
return as directed on the Deed.
The Deed names _______________________, a _______________________, as
Grantor and ______________________, a ______________________ as Grantee. The
property being transferred is located in the City of Sacramento, County of
Sacramento, State of California.
The amount of documentary transfer tax due on the attached deed is
___________________ Dollars and _______________ Cents ($________________),
computed on the full value of the property (less the value of any liens and
encumbrances remaining on the property at the time of sale).
Very truly yours,
By
-----------------------------------------
35
EXHIBIT D
XXXX OF SALE
------------
Concurrently with the execution and delivery of this Xxxx of Sale (the
"Assignment"), 2525 NATOMAS INVESTORS, a California limited partnership
("Assignor"), is conveying to XXXXXXXX PROPERTIES ACQUISITION PARTNERS, L.P., a
Delaware limited partnership ("Assignee"), by Grant Deed (the "Deed"), that
certain tract of land located in Sacramento County, California, being more
particularly described on Exhibit "A" attached hereto and made a part hereof for
-----------
all purposes, together with the improvements located thereon (collectively the
"Property").
Assignor desires to assign, transfer, and convey to Assignee certain
tangible personal property, together with certain contract rights, guaranties,
licenses, and other specified items of intangible property (but specifically
excluding cash), affixed or attached to the Property, except those owned by
tenants of the Property (such tangible and intangible properties herein below
specified being collectively called the "Assigned Properties").
NOW, THEREFORE, in consideration of the receipt of Ten Dollars ($10.00) and
other good and valuable consideration in hand paid by Assignee to Assignor, the
receipt and sufficiency of which are acknowledged and confessed by Assignor,
Assignor ASSIGNS, TRANSFERS, SETS OVER, and DELIVERS to Assignee, its successors
and assigns, subject to any and all matters of record in Sacramento County,
California, to the extent they affect the Property, all of the Assigned
Properties, including, without limitation of the generality of the foregoing,
the following:
1. All of the personal property owned by Assignor located on or in or
used in connection with the Property, including without limitation the items of
tangible personal property consisting of all furniture, fixtures, equipment,
machinery and other personal property of every kind and nature (excluding cash-
on-hand) located on or used or useful in the operation of the Property including
the works of art listed on Exhibit "B".
-----------
2. All of the right, title and interest of Assignor in any intangible
personal property owned by Assignor and used exclusively in the use and
operation of the Property, and all warranties or guarantees received by Assignor
from any contractors, subcontractors, suppliers or material men in connection
with any construction, repairs or alteration of the Property, licenses,
franchises, permits, tenant lists, advertising materials and other similar
rights relating to the use and operation of the Property.
3. The interest of Assignor under all current design contracts, space
planning contracts, construction contracts, subcontracts and purchase orders,
utility contracts, water and sewer service contracts of any nature, maintenance
contracts, management contracts, mortgage documents, certificates of occupancy,
permits, soils reports, insurance policies, and other contracts or documents of
any nature relating to the Property.
36
4. The trade name "Natomas Corporate Center" (the "Trade Name"), on a
non-exclusive basis, and the business and good will of Assignor which were
acquired in connection with the Property.
TO HAVE AND TO HOLD the Assigned Properties unto Assignee, its successors,
and assigns, forever, and Assignor binds itself, its successors, and assigns, to
WARRANT and FOREVER DEFEND, all and singular, title to the Assigned Properties
(with the exception of the Trade Name) unto Assignee, its successors, and
assigns, against every person whomsoever lawfully claiming or to claim the same
or any part thereof, by, through or under Assignor but not otherwise.
Assignor shall not be responsible for the discharge and performance of any
duties or obligations to be performed and/or discharged in connection with the
Assigned Properties after the date hereof. By acceptance of this Assignment,
Assignee accepts and agrees to perform all of the terms, covenants, and
conditions in connection with the Assigned Properties required to be performed
by the owner thereof, from and after the date hereof, but not prior thereto, and
agrees to indemnify, save, and hold harmless Assignor from and against any and
all loss, liability, claims, or causes of action existing in favor of or
asserted by any party arising out of or relating to Assignee's failure to
perform any duties or obligations required by the owner of the Assigned
Properties after the date hereof.
Assignee shall not be responsible for the discharge and performance of any
duties or obligations required to be performed and/or discharged in connection
with the Assigned Properties prior to the date hereof. In such regard Assignor
agrees to indemnify and hold Assignee harmless from and against losses incurred
by Assignee as a result of claims brought against Assignee, as Assignor's
successor in interest to the Assigned Properties, relating to causes of action
arising from any failure by Assignor to perform or discharge its obligation as
the owner of the Assigned Properties prior to the date hereof.
Simultaneously with the execution and delivery of this Assignment, Assignor
has executed and delivered to Assignee the Deed and the specific conveyances
described in the recitals hereof.
37
IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment in
multiple counterparts, each of which shall have the same force and effect as an
original, but which shall constitute one and the same instrument, effective this
________ day of ____________, 1997.
ASSIGNEE:
XXXXXXXX PROPERTIES ACQUISITION PARTNERS, L.P.,
a Delaware limited partnership
By: XXXXXXXX PROPERTIES I, INC., a Delaware
corporation, its sole general partner
By: /s/ XXXX X. XXXXX
----------------------------------------
Name: Xxxx X. Xxxxx
Title: Executive Vice President
ASSIGNOR:
2525 NATOMAS INVESTORS, a California limited
partnership
By:
---------------------------------------------
Name:
-------------------------------------------
Title:
------------------------------------------
38
EXHIBIT "A"
-----------
PROPERTY DESCRIPTION
39
EXHIBIT "B"
-----------
WORKS OF ART
40
EXHIBIT E
DUE DILIGENCE DOCUMENTS
-----------------------
1. Form Lease
2. All tenant leases and amendments
3. Leasing Status reports, weekly basis
4. Lease proposals
5. Service and Purchase Contracts
6. Equipment Leases
7. Union Contracts
8. Other Contracts and Agreements
9. Operating Licenses and Permits
10. Lease Commission Agreements and Schedules of Commissions Payable
11. Current Year Operating Budget
12. Operating Statements, past two years and current year, monthly basis
13. Receivables Report, update on monthly basis
14. Rent Roll, update on monthly basis
15. Billing Register, update on monthly basis
16. Escalation Work Papers and Base Year Amount Details
17. Utility Invoices, past two years and current monthly
18. Real Estate Tax Bills, past two years
19. Current Notice of Assessment Valuation
20. Tax Parcel Map
21. Real Estate Tax Consultant Report
22. Tenant Credit Reports (to the extent that they are in the tenant files) to
be reviewed at the Property during the Due Diligence Period
23. Tenant Financial Statements (to the extent that they are in the tenant
files) to be reviewed at the Property during the Due Diligence Period
24. Schedule of Capital and Tenant Improvements
25. Current Schedule of Insurance
26. Pending Insurance Claims
27. List of Personnel & Wages
28. Lease and Tenant Files, to be reviewed at the Property during the Due
Diligence Period
29. Vendor Files, to be reviewed at the Property during the Due Diligence
Period
30. Construction Files, to be reviewed at the Property during the Due Diligence
Period
31. Other Property Files, to be reviewed at the Property during the Due
Diligence Period
32. List of Personal Property
33. Demising/Leasing/Site Plan
34. Plans and Specifications, 2 sets of each
(a) Architectural
(b) Structural
(c) Civil
(d) Mechanical
(e) Landscaping
41
(f) Sprinkler
(g) Tenant
35. Certificates of Occupancy, building and tenant
36. Construction Contracts
37. Guaranties & Warranties
38. Existing Reports
(a) Structural and Engineering
(b) Environmental and Asbestos
(c) Soils
(d) Radon
(e) Geotechnical
(f) Ground Water Monitoring
(g) Sprinkler Test
(h) Elevator Consultant
39. Preliminary Title Report issued by Xxxxxxx Title Guaranty
40. Underlying Recorded Documents
41. Existing Survey
42
EXHIBIT F
RENT ROLL
---------
To be delivered to Buyer and/or Seller within 5 business days of the Effective
Date
43
EXHIBIT G
TENANT ESTOPPEL
---------------
To be delivered to Buyer and/or Seller within 5 business days of the Effective
Date
44
EXHIBIT H
TRANSFEROR'S CERTIFICATION OF NON-FOREIGN STATUS
------------------------------------------------
To inform XXXXXXXX PROPERTIES ACQUISITION PARTNERS, L.P., a Delaware
limited partnership ("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 2525 NATOMAS
INVESTORS, a California limited partnership ("TRANSFEROR"), the undersigned
hereby certifies the following on behalf of the Transferor:
1. The Transferor is not a foreign corporation, foreign partnership,
foreign trust, or foreign estate (as those terms are defined in the Code and the
Income Tax Regulations promulgated thereunder);
2. The Transferor's U.S. employer identification is ________________;
and
3. The transferor's office address is _______________________________.
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, actual
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, correct and complete, and
I further declare that I have authority to sign this document on behalf of the
Transferor.
Dated: ________, 1997 2525 NATOMAS INVESTORS, A
CALIFORNIA LIMITED PARTNERSHIP
BY:
---------------------------------------
BY:
---------------------------------------
45
EXHIBIT I
ASSIGNMENT OF LEASES
--------------------
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
SPACE ABOVE THIS LINE FOR RECORDER'S USE
ASSIGNMENT OF RIGHTS, LEASES AND SECURITY DEPOSITS
THIS ASSIGNMENT OF RIGHTS, LEASES AND SECURITY DEPOSITS is made as of
____________________, 1997 by _______________, a _________________ ("Assignor"),
in favor of __________________, a ________________________ ("Assignee"),
with reference to the following facts:
A. Assignor is the owner of that certain land ("Land") located in the
City of Sacramento, County of Sacramento, State of California more particularly
described in Schedule 1 hereto, and all rights, privileges and easements
appurtenant to the Land ("Appurtenances"), and all buildings and other
improvements thereon ("Improvements"). The Land, the Appurtenances, and the
Improvements are hereinafter referred to collectively as the "Real Property."
The Real Property is being conveyed to Assignee pursuant to a Grant Deed of even
date herewith, executed by Assignor in favor of Assignee which is being recorded
concurrently herewith.
B. Assignor, as owner of the Real Property, has an interest, as
landlord, in the tenant leases of space in the Improvements ("Leases"), which
are described in Schedule 2 hereto, and an interest in certain security deposits
collected and held by Assignor to secure the performance of the duties and
obligations of tenants under certain of the Leases ("Security Deposits").
C. Assignor desires to assign, transfer and convey to Assignee all of
Assignor's right, title and interest in and to the Leases and the Security
Deposits.
NOW, THEREFORE, Assignor agrees as follows:
1. Assignor hereby assigns, transfers and conveys to Assignee, all of
Assignor's right, title and interest in and to the Leases and the Security
Deposits.
46
2. Assignor warrants and represents that:
(a) Schedule 2 hereto is a list of all of the leases affecting the Real
Property, other than subleases permitted by the respective leases; Assignor has
not executed or otherwise entered into any other leases, tenancies, occupancy
agreements or other agreements with respect to rights affecting possession of
the Real Property or any portion thereof; and there are no such agreements
executed or otherwise entered into by any third party, and
(b) the Leases are in full force and effect and there is no default on the
part of Assignor as landlord or on the part of any tenant, and there exists no
condition that with the passage of time or the giving of notice or both would
constitute such a default.
(c) Cross-Indemnity.
---------------
(i) By Assignor. Assignor indemnifies and holds harmless Assignee
-----------
from and against any and all loss, damage, liability, cost or expense,
including, without limitation, court costs and reasonable attorneys' fees,
arising out of, by reason of, or in connection with any action, suit, charge,
complaint, proceeding, obligation, undertaking or other similar matter arising
out of or in connection with any transaction, event, act or omission involving
the Leases and Security Deposits which occurred, accrued and/or arose prior to
the date hereof.
(ii) By Assignee. Assignee indemnifies and holds harmless Assignor
-----------
from and against any and all loss, damage, liability, cost or expense,
including, without limitation, court costs and reasonable attorneys' fees,
arising out of, by reason of, or in connection with any action, suit, charge,
complaint, proceeding, obligation, undertaking or other similar matter arising
out of or in connection with any transaction, event, undertaking, act or
omission involving the Leases and Security Deposits which occurs, accrues and
arises from and after the date hereof.
3. The provisions of this Agreement of Rights, Leases and Security
Deposits shall be binding upon and inure to the benefit of Assignor and Assignee
and their respective successors and permitted assigns.
IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment of
Rights, Leases and Security Deposits as of the date first set forth above.
ASSIGNEE: ASSIGNOR:
BY: BY:
----------------------------------- --------------------------------------
ITS: ITS:
----------------------------------- --------------------------------------
DATE: DATE:
----------------------------------- --------------------------------------
47
EXHIBIT J
NOTICES TO TENANT
-----------------
Premises: ________________________________
Lease dated ________________ between ___________________, a
Landlord, and _____________, a
____________________________, Tenant
This is to notify you that the undersigned has sold its fee interest in the
__________ and in connection therewith has assigned its interest as landlord
under your lease to ________________________, a ____________________, whose
address is ______________________________.
You are further notified that commencing ___________________________, 1997,
all rental payments under your Lease shall be paid to _________________________,
at the address specified in the first paragraph hereof, unless you are otherwise
notified in writing by __________________________. You are further notified that
all notices to the Landlord pursuant to your lease should hereafter be sent to
______________________ at the address specified in the first paragraph hereof
unless you are otherwise notified in writing by _______________________________.
Very truly yours,
CERTIFIED MAIL,
RETURN RECEIPT REQUESTED.
48
EXHIBIT K
WORKS OF ART
------------
To be delivered to Buyer and/or Seller within 5 business days of the Effective
Date
49
EXHIBIT L
DESCRIPTION OF TERMS OF STATE OF CALIFORNIA LEASE
-------------------------------------------------
To be delivered to Buyer and/or Seller within 5 business days of the Effective
Date
50
