EXHIBIT 2.1
PURCHASE AND SALE AGREEMENT
AND ESCROW INSTRUCTIONS
THIS PURCHASE AND SALE AGREEMENT AND ESCROW INSTRUCTIONS
("Agreement") is dated for reference purposes as of March 3, 1998, by and
between PACIFIC RESOURCES DEVELOPMENT INC., a California corporation ("Seller")
and OCWEN CAPITAL CORPORATION, a Florida corporation ("Buyer"), with reference
to the following facts:
A. Seller is the owner of the Property, as hereinafter
defined.
B. Buyer desires to purchase from Seller and Seller desires to
sell to Buyer the Property, all on the terms and conditions set forth herein.
NOW, THEREFORE, IN CONSIDERATION of the foregoing and the
mutual agreements herein set forth, and other valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, Seller and Buyer, and
where appropriate Escrow Holder, agree as follows. The "Effective Date" of this
Agreement shall be deemed to be the later of the two dates on which the parties
execute this Agreement as set forth by their respective signatures.
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, all of Seller's right, title and interest in and to the following:
1.1 LAND. That certain real property (the "Land")
situated in San Francisco, California, more particularly described in EXHIBIT A
hereto, all of which shall be conveyed to Buyer pursuant to a deed in the form
of EXHIBIT B hereto (the "Deed");
1.2 APPURTENANCES. All rights, privileges and easements
appurtenant to and for the benefit of the Land, including, without limitation,
all minerals, oil, gas and other hydrocarbon substances on and under the Land,
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 owned by Seller and used in connection with the beneficial
operation, use and enjoyment of the Land, the Leases (as hereinafter defined),
the Rents (as hereinafter defined), the Improvements (as hereinafter defined),
the Intangible Property (as hereinafter defined), or any other appurtenance,
together with all rights of Seller in and to streets, sidewalks, alleys,
driveways, parking areas and areas adjacent thereto or used in connection
therewith, and all rights of Seller in any land lying in the bed of any existing
or proposed street adjacent to the Land (all of which are collectively referred
to as the "Appurtenances");
1.3 IMPROVEMENTS. All improvements and fixtures located
or to be located on the Land, including, without limitation, all buildings and
structures presently located on the Land or to be located thereon on the Closing
Date (as hereinafter defined), all apparatus,
equipment and appliances presently located on the Land and 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, garbage disposal, recreation or other services
thereto, and all landscaping and leasehold improvements of tenants, if any,
which become the property of the owner of the Land (all of which are
collectively referred to as the "Improvements");
1.4 LEASES AND RENTS. All leases, occupancy agreements
and other similar agreements to which Seller is a party or by which it is bound,
together with all modifications, extensions and renewals thereof, and any
guarantees of any of the foregoing with respect to or demising any part of the
Land, Appurtenances or Improvements (the "Leases"), all income, receipts, funds
and revenues of any kind whatsoever payable under the Leases or otherwise with
respect to all or any portion of the Land, Appurtenances or Improvements for
period commencing from and after the Closing Date (the "Rents"), all of which
Leases and Rents shall be transferred and assigned to Buyer pursuant to an
instrument in the form of EXHIBIT C hereto (the "Assignment and Assumption of
Leases and Rents");
1.5 PERSONAL PROPERTY. All of the interest of Seller in
any and all tangible personal property located or to be located on, or situated
or to be situated in and used in connection with, the Land and/or the
Improvements except for certain items listed in EXHIBIT D hereto, which include
only those items located in Seller's offices which are not used in the operation
of the Property ("Personal Property"); all of the Personal Property shall be
transferred and assigned to Buyer pursuant to an instrument in the form of
EXHIBIT E hereto (the "Xxxx of Sale");
1.6 INTANGIBLE PROPERTY AND CONTRACTS. All of the
interest of Seller in (i) any and all intangible personal property which relates
to or is reasonably required for the identification, marketing, operation or
functioning of the Land, Improvements or Personal Property generally, including
any names or trade names associated with the Property (all of which are
collectively referred to as the "Intangible Property") and (ii) any and all
warranties, guarantees, permits, Assigned Contracts and other rights owned by
Seller relating to the ownership, operation or functioning of all or any part of
the Property, including without limitation all third party guarantees and
warranties, express or implied, in connection with the construction of the
Improvements, all of which shall be assigned to Buyer pursuant to one or more
(as determined by Buyer) instruments in the form of EXHIBIT F hereto (the
"Assignment and Assumption of Contracts, Intangible Property, Warranties and
Guarantees").
All of the items described in Sections 1.1, 1.2, 1.3, 1.4, 1.5
and 1.6 above are hereinafter collectively referred to as the "Property." The
items described in Sections 1.1, 1.2, and 1.3 above are hereinafter referred to
collectively as the "Real Property."
ARTICLE II
PURCHASE PRICE; XXXXXXX MONEY DEPOSIT
2.1 PURCHASE PRICE. The purchase price for the Property
(the "Purchase Price") shall be One Hundred Million One Hundred Fifty Thousand
Dollars ($100,150,000.00). The Purchase Price shall be allocated among Land,
Improvements and Personal Property as Buyer shall reasonably determine.
2
2.2 PAYMENT OF PURCHASE PRICE. The Purchase Price shall
be paid by Buyer into the escrow for this Agreement ("Escrow") to be maintained
by Chicago Title Insurance Company ("Escrow Holder") at the Closing (as
hereinafter defined) by wire transfer of immediately available funds in
accordance with wiring instructions to be provided by Escrow Holder; provided,
however, that Buyer shall adjust the funds to be wired pursuant to this Section
2.2 for the following: (i) the amount of credits due to Buyer, or debits due
from Buyer (as the case may be) for prorations and other credits and debits
hereunder, and (ii) the amount of the Xxxxxxx Money Deposit (as hereinafter
defined) plus earnings thereon, to be released to Seller as part of the Purchase
Price. At the option of Seller, such option to be exercised not later than ten
(10) days prior to the Scheduled Closing Date ("Equity Election Date"), Seller
may elect to receive not more than twenty-five percent (25%) of the Purchase
Price in the form of operating partnership units of Ocwen Partnership, L.P. (the
"Partnership"). The number of units to be received by the Seller at the Closing
shall be calculated in accordance with the terms of that certain Amended and
Restated Agreement of Limited Partnership of Ocwen Partnership, L.P. (the
"Partnership Agreement"). Upon written request by Seller, Buyer shall deliver a
copy of the Partnership Agreement and any related documentation not later than
one (1) week prior to the Equity Election Date. Seller agrees to execute and
deliver or otherwise provide, as required or reasonably requested by Buyer, any
and all documentation and instruments necessary in Buyer's or the Partnership's
discretion to effect its admission to the Partnership as a limited partner in
accordance with the terms of the Partnership Agreement and any applicable law,
including without limitation any applicable state and federal securities laws.
In the event of such election by Seller, Seller agrees to abide by the terms and
provisions of the Partnership Agreement upon Seller's admission as a limited
partner. Seller shall not, prior to Closing, assign this right to receive the
interest in the Partnership without the prior written consent of the
Partnership, which consent may be withheld in the sole discretion of the
Partnership.
2.3 XXXXXXX MONEY DEPOSIT. Within two (2) Business Days
following the Contingency Date (as hereinafter defined), if Buyer has not
objected or been deemed to object to the matters described in Section 4.1
through 4.3 as set forth in Section 4.4 of this Agreement, Buyer shall deposit
with Escrow Holder the sum of Three Million Dollars ($3,000,000.00) (the
"Xxxxxxx Money Deposit") in immediately available funds. In the event of
objection by Buyer pursuant to Section 4.4 of this Agreement, Buyer shall
deposit the Xxxxxxx Money Deposit with Escrow Holder within two (2) Business
Days following the first to occur of receipt by Buyer and Escrow Holder of (a)
Seller's agreement cure said objections or (b) Buyer's waiver of any such
objection which Seller has not agreed to cure. The Escrow Holder shall hold the
Xxxxxxx Money Deposit in an interest-bearing account with a bank or savings
association as Buyer may select and all interest earned thereon shall be deemed
to be part of the Xxxxxxx Money Deposit. The Xxxxxxx Money Deposit shall be
nonrefundable as provided in Section 2.4 unless this Agreement terminates for
any reason other than a default of Buyer hereunder. Without limiting the
foregoing, the Xxxxxxx Money Deposit shall be fully refundable to Buyer in the
event that Escrow fails to Close unless such failure is the result of a default
under this Agreement by Buyer. The Xxxxxxx Money Deposit shall be released to
Seller only at the Closing as a part of the Purchase Price.
2.4 DEPOSIT AS LIQUIDATED DAMAGES. IF THE SALE OF THE
PROPERTY AS CONTEMPLATED HEREUNDER IS NOT CONSUMMATED SOLELY AS THE RESULT OF A
DEFAULT UNDER THIS AGREEMENT ON THE PART OF BUYER, ESCROW HOLDER SHALL PROMPTLY
PAY OVER TO SELLER THE XXXXXXX MONEY DEPOSIT AND SELLER SHALL BE ENTITLED TO
RETAIN THE XXXXXXX MONEY DEPOSIT AS LIQUIDATED DAMAGES. THE PARTIES ACKNOWLEDGE
THAT SELLER'S ACTUAL DAMAGES IN THE EVENT OF A DEFAULT BY BUYER
3
WOULD BE EXTREMELY DIFFICULT OR IMPRACTICABLE TO DETERMINE. THEREFORE, BY
PLACING THEIR SIGNATURES BELOW, THE PARTIES EXPRESSLY AGREE AND ACKNOWLEDGE THAT
THE XXXXXXX MONEY DEPOSIT HAS BEEN AGREED UPON, AFTER NEGOTIATION, AS THE
PARTIES' REASONABLE ESTIMATE OF SELLER'S DAMAGES. THEREFORE, IF, AFTER
SATISFACTION OR WAIVER OF ALL CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS UNDER
THIS AGREEMENT, BUYER BREACHES THIS AGREEMENT AND FAILS TO COMPLETE THE PURCHASE
OF THE PROPERTY AS PROVIDED HEREIN, SELLER SHALL BE ENTITLED TO LIQUIDATED
DAMAGES IN THE AMOUNT OF THE XXXXXXX MONEY DEPOSIT. ON RECEIPT AND RETENTION BY
SELLER OF THE XXXXXXX MONEY DEPOSIT, THIS AGREEMENT SHALL TERMINATE AND BUYER
SHALL HAVE NO FURTHER OBLIGATIONS OR LIABILITY HEREUNDER. THE PARTIES FURTHER
ACKNOWLEDGE THAT THE XXXXXXX MONEY DEPOSIT HAS BEEN AGREED UPON AS SELLER'S
EXCLUSIVE REMEDY AGAINST BUYER IN THE EVENT OF A DEFAULT ON THE PART OF BUYER.
---------------------------- -----------------------------------
Buyer Seller
2.5 DEFAULT BY SELLER. In the event of a default by
Seller under this Agreement, Buyer shall be entitled to all remedies provided by
law or in equity, including damages as provided in California Civil Code Section
3306.
ARTICLE III
TITLE TO PROPERTY
3.1 TITLE. At the Closing, Seller shall convey to Buyer
fee simple title to the Property pursuant to the Deed. Subject to the terms of
Section 4.4 hereof, it shall be a condition to Buyer's obligations under this
Agreement that Chicago Title Insurance Company (the "Title Company") issue an
ALTA Owner's Policy of Title Insurance (1970 Form B), together with such
endorsements thereto as Buyer may request, which may include without limitation
an ALTA Form 9, contiguity endorsement, zoning endorsement, survey location
endorsement, access endorsement and Subdivision Map Act Compliance endorsement
(the "Title Policy") in the full amount of the Purchase Price, insuring fee
simple title to the Real Property in Buyer, subject only to (i) the lien of real
property taxes for the then applicable fiscal year, to the extent not yet due
and payable, (ii) the lien of supplemental taxes imposed by reason of transfer
on or after the Closing, and (iii) other Permitted Exceptions (as hereinafter
defined). Buyer will pay the cost of the premium for the Title Policy.
3.2 OTHER CONVEYANCE DOCUMENTS. At the Closing, Seller
shall (i) assign the Leases and Rents to Buyer pursuant to the Assignment and
Assumption of Leases and Rents; (ii) transfer title to the Personal Property to
Buyer pursuant to the Xxxx of Sale, and (iii) transfer and assign to Buyer all
of Seller's rights in and to the Intangible Property pursuant to the Assignment
and Assumption of Contracts, Intangible Property, Warranties and Guarantees;
such title and rights to be free of any liens, encumbrances or interests of
third parties other than the Permitted Exceptions.
4
ARTICLE IV
BUYER'S CONTINGENCIES
The complete satisfaction or deemed satisfaction as provided
in this Article as of 5:00 p.m. Pacific Standard Time on March 6, 1998 (the
"Contingency Date") (or such other date as may be specified in this Article)
with respect to those matters described in this Article IV hereof is a condition
precedent to Buyer's obligation to purchase the Property. Buyer's failure to
approve the condition set forth in Section 4.1 through 4.3 in writing prior to
the Contingency Date (unless another time period is specified) shall be deemed
disapproval and in such event this Agreement shall terminate. In the event the
Agreement terminates as the result of a failure of a condition as set forth in
this Article IV except to the extent such termination results from a default
under this Agreement by Buyer or Seller, Buyer and Seller shall have no further
obligations under this Agreement except as set forth in Section 12.2 hereof and
other obligations specified in this Agreement to survive such termination. In
such event within two (2) Business Days after any such termination, Escrow
Holder shall deliver to Buyer the Xxxxxxx Money Deposit.
4.1 PHYSICAL CHARACTERISTICS OF THE PROPERTY. Buyer shall
have reviewed and approved, in its sole and absolute discretion, of (a) an
environmental assessment (which may, without limiting the scope of the report,
contain an assessment of asbestos and radon affecting the Property) by an
environmental consultant of Buyer's choice and at Buyer's cost (the "Phase I
Report"), (b) the results of Buyer's physical inspection and testing of the
Property, or any portion thereof (which testing shall be conducted at Buyer's
expense, and may include, but shall not be limited to, testing for the presence
of asbestos, polychlorinated biphenyls, and other Hazardous Materials (as
hereinafter defined), including without limitation the performance of core
sampling, drilling and other intrusive testing), of the structural, mechanical,
electrical and other physical or environmental characteristics of the Property,
including any tenant improvements or other construction installed or to be
installed as of the Closing Date; and (c) any other physical, economic, legal or
other condition of the Property. Subject to the rights of the tenants under the
Leases, Seller shall allow, and shall have allowed prior to the Effective Date,
Buyer reasonable access to the Property to perform any physical inspection
thereof described in this Section or which Buyer otherwise reasonably deems
appropriate. Buyer hereby agrees to indemnify, defend and hold Seller harmless
from and against any and all losses, damages, liabilities, suits, actions,
causes of action, claims, fines, proceedings, costs and expenses resulting from
any investigations, inspections and tests conducted by Buyer with respect to the
Property, except to the extent caused by the gross negligence or willful
misconduct of Seller.
4.2 GOVERNMENTAL PERMITS, APPROVALS AND REGULATIONS.
Buyer shall have confirmed that all governmental permits and approvals and other
legal matters with respect to the Property relating to the construction,
operation, use or occupancy of the Property or any portion thereof, including
asbestos notifications, are in full force and effect and are otherwise
acceptable to Buyer in its sole discretion. Seller has provided copies of all
such permits, approvals and notifications which are or have been in Seller's
possession or Control (as defined hereafter) during the period of time of
Seller's ownership of the Property as part of the Due Diligence Materials.
4.3 CONDITION OF TITLE AND OTHER MATTERS. Buyer shall
have reviewed and approved of a current title report for the Property issued by
Title Company and copies of all documents referenced therein ("PTR") and an ALTA
survey, the physical and financial state
5
of the Property, any contracts or leases relating to the Property, any item
delivered (or not delivered) by Seller to Buyer, and any other matter Buyer may
reasonably deem necessary or appropriate, including the Due Diligence Materials
(as herein defined). All items disclosed in the PTR or ALTA survey but not
objected to by Buyer or for which Buyer's objection is waived, and those items
referred to in items (i) and (ii) of the second sentence of Section 3.1 hereof,
shall be deemed "Permitted Exceptions"; provided, however, that Seller covenants
to remove all monetary encumbrances (other than those with respect to the liens
referred to in items (i) and (ii) of the second sentence of Section 3.1 hereof)
affecting the Property or any portion thereof prior to Closing, and Seller
further agrees that no monetary encumbrances other than the liens referred to in
items (i) and (ii) of the second sentence of Section 3.1 hereof shall be
Permitted Exceptions. Seller shall cause all contracts as to Buyer and the
Property to terminate as of the Closing other than the Assigned Contracts and
those contracts which will be otherwise terminable by the owner of the Property
on not more than thirty (30) days' notice ("Short Termination Contracts"). All
Short Termination Contracts shall also be listed on EXHIBIT I attached hereto.
4.4 OBJECTION BY BUYER. Buyer hereby agrees that it has
no objection to, and waives any right to object to, any of the conditions set
forth in Section 4.1 and 4.2. In addition, Buyer approves the legal description,
the endorsements and the exceptions from coverage to title set forth in the
proforma report issued by the Title Company dated February 20, 1998, No. 8560152
SW and stamped dated "Pro Forma Policy, 3/2/98" ("Pro Forma Policy") (except
that the second half taxes shall not be a Permitted Exception and Item 12 shall
be a Permitted Exception only if it lists only those tenants shown on the Rent
Roll attached hereto plus those additional tenants approved by Buyer pursuant to
Section 9.2 hereto, if any). Buyer further approves the survey issued by Xxxxxx
X. Xxx Associates, Inc., Drawing No. S3868, dated March 6, 1998].
4.5 CHANGES OR ADDITIONAL MATTERS. To the extent there is
a material change in any of the information or matters either described in this
Article IV or contained in the Due Diligence Materials ("Additional Matter"),
Seller shall immediately inform Buyer in writing of such change and deliver any
such new or supplemental information to Buyer, such notice to specify that such
material is an "Additional Matter" as described in Section 4.5 of the Agreement.
If the aggregate of (a) all costs to remedy such Additional Matters and (b) the
decrease in value of the Property resulting from the Additional Matters not
capable of being remedied ("Reduced Value") exceeds Five Hundred Thousand
Dollars ($500,000) ("Reduction Limit"), Buyer shall have until the later of (i)
the Contingency Date or (ii) five (5) Business Days following Buyer's receipt of
such notification, within which to give Seller and Escrow Holder written
approval of the Additional Matters or written notice outlining any of the
Additional Matters objected to and specifying if applicable, Buyer's desired
cure. Buyer's failure to provide any such notice shall be deemed disapproval of
the Additional Matters and this Agreement shall terminate. Seller shall have
five (5) Business Days after receipt of Buyer's notice to advise Buyer and
Escrow Holder, in writing, as to whether Seller shall cure said objections prior
to the Closing or cure such objections to the extent that the Reduced Value
following such cure does not exceed the Reduction Limit. Seller's failure to
advise Buyer of Seller's election within such five (5) Business Day period shall
be deemed an election to refuse to so cure said objections. If Seller elects to
so cure, completion of such cure shall be a covenant by Seller as well as a
condition to Buyer's obligation to purchase the Property. In the event Seller
elects, or is deemed to elect, not to cure Buyer's objections to the Additional
Matters, Buyer shall have the option within five (5) Business Days following
receipt of Seller's election or, if Seller fails to so notify Buyer, within five
(5) Business Days following the last date provided herein for Seller to give
such notice, to (A) waive Buyer's objections and purchase the Property as
otherwise contemplated in this Agreement,
6
notwithstanding such objections, or (B) terminate this Agreement by written
notice to Seller and Escrow Holder. Buyer's failure to so notify Seller within
such five (5) Business Day period shall be deemed Buyer's election to terminate
this Agreement. In the event Buyer waives its objections and elects to purchase
the Property or in the event the Reduced Value is in excess of $100,000 but less
than the Reduction Limit, the Purchase Price shall be reduced by the Reduced
Value up to the Reduction Limit (but shall not be reduced if the Reduced Value
is less that $100,000). Notwithstanding the foregoing, any Additional Matters
intentionally caused by Seller shall be remedied by Seller prior to Closing or,
at Buyer's election, the full Reduced Value shall be deducted from the Purchase
Price. Such remedies shall not limit any other remedy of Seller resulting from
such intentional causation by Seller. To the extent the time periods for notice,
objection, approval or waiver cause the time period permitted therefor to extent
beyond the Scheduled Closing Date, the parties agree that the Scheduled Closing
Date shall be extended to the extent necessary to permit the parties to utilize
the time periods set forth in this Section.
4.6 TENANT MATTERS.
(a) Seller shall deliver written estoppel statements
(the "Tenant Estoppels") from tenants under Leases covering 5,000 or more
rentable square feet except for the lease with The Jewish Bulletin ("Required
Estoppels"). In addition to the Required Estoppels, Seller shall use reasonable
commercial efforts to obtain Tenant Estoppels from all other tenants
("Non-Required Estoppels") in addition to the Required Estoppels. The Tenant
Estoppels shall be delivered to Buyer as they are received from such tenants,
but not later than three (3) Business Days prior to the Scheduled Closing Date
(as hereinafter defined), which shall have been executed not earlier than
January 15, 1998 and shall be in substantially the form as attached hereto as
EXHIBIT G. In the event that Seller, using commercially reasonable efforts, is
unable to obtain all such Required Estoppels by such time, either Seller or
Buyer shall have the right to extend the Scheduled Closing Date by up to ten
(10) days to enable Seller to obtain such Required Estoppels; thereafter, if all
of the Required Estoppels are still not obtained, Buyer shall have the right to
further extend the Scheduled Closing Date by an additional ten (10) days. Seller
shall prepare and deliver the Tenant Estoppels to all of the tenants as soon as
commercially feasible. To the extent that Seller is unable to obtain
Non-Required Estoppels, Seller shall sign Tenant Estoppels on behalf of each
such tenant in substantially the form as attached hereto as EXHIBIT G ("Landlord
Estoppels") certifying as to the truth and accuracy of the information in such
Tenant Estoppel, and shall sign it under the following statement: "This Tenant
Estoppel is executed for the benefit of the Purchaser by Pacific Resources
Development Inc. which shall be responsible to Purchaser for the truth and
accuracy of the information contained herein." Each such Landlord Estoppel shall
be treated as between the parties as if it were a representation and warranty
set forth in this Agreement. All Landlord Estoppels shall be signed no earlier
than April 1, 1998 and shall be delivered to Buyer not later than three (3)
Business Days prior to the Scheduled Closing Date. Buyer shall have until one
(1) Business Day prior to the Scheduled Closing Date to notify Seller of any
objection Buyer may have regarding such Tenant Estoppels, and in the event Buyer
fails to so notify Seller, Buyer shall be deemed to have approved the
satisfaction of the condition set forth in this Section 4.6. Buyer may object
only to the following issues related to the Tenant Estoppels: (a) failure of a
Tenant Estoppel to be completed or to be missing any exhibits thereto; (b)
failure of a Tenant Estoppel to contain only information that is wholly
consistent with such tenant's Lease as delivered to Buyer and the Rent Roll; or
(c) disclosure of a material default or dispute.
(b) Seller is entering concurrently into an agreement
with International Data Group ("IDG") to terminate its existing Lease. Seller
shall indemnify,
7
defend and hold Buyer harmless from and against any liability,
claim, demand or loss arising out of or related to such termination.
(c) Seller agrees that any sums payable to the
Landlord under the IKON Lease related to or arising out of the supervision of
the construction of IKON's tenant improvements shall be paid to Buyer and that
no portion of any such sum shall be payable to or accepted by Seller.
ARTICLE V
CLOSING, RECORDING AND TERMINATION
5.1 DEPOSIT WITH ESCROW HOLDER AND ESCROW INSTRUCTIONS.
Promptly after execution of this Agreement, whether or not by facsimile as
provided in Section 12.10, each party hereto shall deliver three (3) fully
executed and initialed originals of this Agreement to the Escrow Holder and this
instrument shall serve as the escrow instructions to the Escrow Holder for
consummation of the purchase and sale contemplated hereby. Escrow Holder shall
deliver two originals executed by Seller to Buyer and two originals executed by
Buyer to Seller. Seller and Buyer agree to execute such additional and
supplementary escrow instructions as may be appropriate to enable the Escrow
Holder 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.
5.2 CLOSING.
(a) The Closing shall occur no later than Tuesday, April
7, 1998, or such other date as Buyer and Seller may mutually agree in
writing ("Scheduled Closing Date"). Except as otherwise expressly
provided herein, the Scheduled Closing Date may not be extended without
the written approval of both Seller and Buyer. The Closing shall not
occur until the Purchase Price shall have been paid by Buyer to Escrow
Holder as provided herein. The "Closing" shall be deemed to have
occurred on the date that the Deed is recorded as specified in Section
5.9 of this Agreement. The "Closing Date" shall be the date on which
the Closing occurs.
(b) In the event the Closing does not occur on or before
the Scheduled Closing Date, either of the parties not then in default
as of the Scheduled Closing Date may instruct Escrow Holder to cancel
the Escrow as provided in Section 12.10.
5.3 DELIVERY BY SELLER. No less than three (3) Business
Days prior to the Scheduled Closing Date, Seller shall deposit with the Escrow
Holder, for the benefit of Buyer, or deliver directly to Buyer the following:
(a) The Deed and the Assignment and Assumption of Leases
and Rents, each duly executed and acknowledged by Seller, in recordable
form, with the transfer tax information separated from the Deed so as
to not be recorded;
(b) The Xxxx of Sale duly executed by Seller;
(c) Originals or copies of any warranties and guaranties
received by Seller and to be assigned to Buyer, from any contractors,
subcontractors, suppliers
8
or materialmen in connection with any construction, repairs or
alterations of the Improvements or any tenant improvements;
(d) The Assignment and Assumption of Contracts,
Intangible Property, Warranties and Guarantees, duly executed by Seller
assigning all of Seller's interest in the Intangible Property; and a
proper and effective assignment to Buyer, or reissue for the benefit of
Buyer, of any letters of credit benefiting Seller related to the
Property, including the security deposit under the Lease with Xxxxxx,
Xxxxxx & Xxxxxxxxx.
(e) Originals or copies of all certificates of
occupancy, licenses and permits for the Improvements;
(f) All existing as-built plans and specifications,
calculations and other related documents for the Improvements in
Seller's possession or reasonably available to Seller;
(g) A certificate executed by Seller in the form
attached hereto as EXHIBIT H (the "Non-Foreign Certificate") stating,
under penalty of perjury, that (a) Seller is not a "foreign person" for
the purposes of Section 1445 of the Internal Revenue Code of 1986, as
amended, and that withholding of tax will not be required thereunder,
and (b) withholding is not required under the provisions of any state
laws in connection with the contemplated transfer of the Property by
Seller to Buyer;
(h) A certificate duly executed by Seller and dated
as of the Closing Date confirming the truth, accuracy and completeness
of each of the Seller's representations and warranties set forth in
Article VI below and noting with specificity any changes or exceptions
thereto based upon events or circumstances intervening after the
execution hereof (the "Seller Update Certificate");
(i) Complete originals of the Leases and all
amendments, supplements, modifications and guaranties thereto and
copies of all records, books of account, ledgers, statements and other
business records relating to the ownership and operation of the
Property and/or the administration of the Leases, in whatever mode
maintained, including information contained on computer disks;
(j) Letters to (A) all tenants under the Leases, (B)
the parties to any Assumed Contract in the forms attached hereto as
EXHIBIT N-1 and EXHIBIT N-2 each such letter notifying such parties of
the transfer of the Property to Buyer ("Notice Letters"), along with
addressed envelopes therefor to the address for proper notice to each
such tenant or contractor as provided in each such Lease or contract;
and
(k) Such evidence as Buyer or Escrow Holder may
reasonably require as to the authority of the person or persons
executing documents on behalf of Seller.
Buyer may waive compliance on Seller's part under any of the
foregoing items by an instrument in writing. Notwithstanding the foregoing,
Seller may deliver those documents described in subparagraphs (c), (e), (f) and
(i) to a location reasonably acceptable to Seller and Buyer which is accessible
only to Buyer and Seller not later than three (3) Business Days prior to the
Scheduled Closing Date. Buyer shall have the right to review and
9
inventory all such documents and placed them in sealed boxes. Seller shall not
interfere with such process nor open or move any such sealed boxes prior to the
Closing. Upon the Closing, Buyer shall have the right to remove all such
documents.
5.4 DELIVERY BY BUYER. Buyer shall execute and deliver to
Escrow Holder, for the benefit of Seller the following:
(a) Buyer's executed counterpart of the Assignment
and Assumption of Leases and Rents, and Assignment and Assumption of
Contracts, Intangible Property, Warranties and Guarantees which shall
be delivered not later than two (2) Business Days prior to the
Scheduled Closing Date.
(b) A certificate executed by Buyer certifying as of
the Closing Date the truth, accuracy and completeness of each of the
Buyer's representations and warranties set forth in Section VII below
and noting with specificity any changes thereto based on events or
circumstances intervening after the execution of this Agreement ("Buyer
Update Certificate").
After Buyer's or Escrow Holder's receipt of all of the items
specified in Section 5.3 hereof, after the complete satisfaction of all of the
conditions precedent to Buyer's obligations hereunder, Buyer shall deliver the
remainder of the Purchase Price to Escrow Holder as provided in Section 2.2
above.
5.5 CONDITIONS TO CLOSING.
(a) Seller's obligation to sell the Property is
expressly conditioned on each of the following:
(1) Buyer shall have deposited with Escrow Holder
all sums and documents required under the terms of this
Agreement.
(2) Buyer shall have timely performed each
obligation and covenant of Buyer hereunder.
(3) All representations and warranties of Buyer
hereunder shall be true and correct in all material respects.
(4) Seller shall have approved (such approval not
to be unreasonably withheld or delayed) a settlement statement
prepared by Escrow Holder, including items in the Prorations
Schedule.
(b) Buyer's obligation to buy the Property is
expressly conditioned on each of the following:
(1) Seller shall have deposited with Escrow
Holder all documents required under the terms of this
Agreement.
(2) All of the conditions set forth in Article IV
hereof entitled "Buyer's Contingencies" shall have been
satisfied or deemed satisfied.
10
(3) Seller shall have timely performed each
obligation and covenant of Seller hereunder.
(4) All representations and warranties made by
Seller under this Agreement shall be true and correct in all
material respects.
(5) Buyer shall have received and approved (or be
deemed to have approved) the Tenant Estoppels as provided in
Section 4.6.
(6) Buyer shall have approved (such approval not
to be unreasonably withheld or delayed) a settlement statement
prepared by Escrow Holder, including items in the Proration
Schedule.
(7) The Title Company shall have given an
unconditional commitment to issue the Title Policy.
(8) There shall have occurred no material adverse
change in the financial condition of any tenant leasing in
excess of 16,000 rentable square feet under any of the Leases,
and there shall be no material default, or event that with the
giving of notice or the passage of time or both would
constitute a material default, under any of the Leases except
as described in approved (or deemed approved) Tenant
Estoppels.
5.6 OTHER INSTRUMENTS. Seller and Buyer shall each
deposit such other instruments as are reasonably required by Escrow Holder or
otherwise required to close the escrow and consummate the purchase of the
Property in accordance with the terms hereof.
5.7 PRORATIONS AND OTHER ALLOCATIONS. Prior to the
Closing, the parties shall agree (using good faith and due diligence) on the
amounts of the following prorations, such amounts to be prorated as of the
Closing Date, on an accrual basis unless otherwise stated, with Seller to
prepare the initial proposed prorations and deliver such to Buyer not later than
two (2) Business Days prior to the Scheduled Closing Date. The prorations shall
be calculated on the basis of Buyer being deemed to be the owner of the Property
on the Closing Date and based on a thirty (30) day month and 365 day year:
(a) RENTS AND SECURITY DEPOSITS. All rents and other
receipts payable for the month in which the Closing occurs shall be
prorated on a cash basis as of the Closing Date and all security
deposits (including letters of credit in lieu thereof which Seller
shall properly have assigned or have reissued to Buyer at Seller's
expense at the Closing) delivered to Seller by any tenant pursuant to
any of the Leases shall be credited to Buyer at Closing. In addition,
any consideration received by Seller from and after the Effective Date
in regards to an assignment or subletting of any Lease shall be
delivered to Buyer at the Closing. Buyer shall use reasonable efforts
for ninety (90) days following the Closing to collect delinquent rents
for the period up to the Closing (such reasonable efforts consisting of
no more than the requirement that Buyer send three written demands for
said past due rent) and shall pay to Seller any such sums collected
during such ninety (90) day period (less any costs to Buyer to so
collect such sums) prior to applying any such sums to rents due
following the Closing except to the extent that any tenant is refusing
to pay due to a claim or any offset by such tenant arising from events
occurring prior to the Closing.
11
Following the end of such ninety (90) day period, Buyer shall have no
further obligation to Seller to pay to Seller any past due rents which
may be received from any tenant. From and after the Closing Date,
Seller agrees that it shall make no efforts to collect any past due
rents or other amounts payable by any tenant under a Lease or take,
pursue or continue any action, arbitration or other proceeding against
any such tenant so long as such tenant remains on the Property. Seller
shall notify Buyer immediately upon receipt of any rents or other
payments under any Lease delivered to Seller following the Closing and
shall deliver to Buyer any amounts thereof applicable to periods
following the Closing Date.
(b) OPERATING EXPENSES. All operating expenses and other
amounts payable or reimbursable to the landlord including gross
receipts taxes under any Leases in addition to the base monthly rental
shall be reconciled at Closing, such that if Seller has collected sums
in excess of its actual paid reimbursable expenses under the Leases,
Seller shall cause Escrow Holder to release such sum from the
Prorations Holdback (as defined hereafter) and pay excess directly to
Buyer. In the event that such reconciliation shows that Seller has
collected less than its incurred reimbursable expenses under the
Leases, Buyer shall remit the excess to Seller not later than the
expiration of three months after the conclusion of the twelve-month
period then in progress with respect to the budgeting of such expenses
under the Leases; provided, however, that Buyer shall endeavor to
collect all amounts payable and prepare a reconciliation at an earlier
date to the extent feasible.
(c) TAXES. Unless such items are subject to proration
under subparagraph (b) above, real estate taxes, recurring assessments,
and personal property taxes, if any, on all or any portion of the
Property, based on the regular and supplemental tax bills for the
calendar year in which the Closing Date occurs (or, if such tax xxxx
has not been issued as of the date of Closing, the regular and
supplemental tax xxxx for the calendar year preceding that in which the
Closing Date occurs, with such increase thereto as Buyer reasonably
estimates will occur) shall be prorated as of the Closing Date. Seller
and Buyer agree that the second half property taxes shall be paid
through escrow. If any supplemental real estate taxes or assessments
are levied following the Closing Date which apply in whole or in part
to any period preceding the Closing, the parties will, immediately
after the issuance of the supplemental xxxx, prorate between
themselves, in cash, without interest and to the date of the Closing
Date, the supplemental real estate taxes and assessments shown by such
xxxx. Buyer understands that Seller may be receiving a refund of
unsecured property taxes that were overpaid in prior years. To the
extent that any such refund is received by Buyer within the twelve (12)
month period following the Closing, Buyer shall deliver any such refund
to Seller within ten (10) Business Days of receipt thereof. Buyer shall
have no further obligations as to such refund of unsecured property
taxes following such twelve (12) month period.
(d) UTILITIES. Unless such items are subject to proration
under subparagraph (b) above, all utilities, including gas, water,
sewer, electricity, telephone and other utilities supplied to the
Property shall be read and/or transferred as of the Closing Date. All
amounts applicable to the period prior to the Closing Date shall be
paid by Seller and amounts applicable to the period following the
Closing Date shall be paid by Buyer.
(e) SERVICE AND OTHER CONTRACTS. Amounts payable under
contracts assigned pursuant to the Assignment and Assumption of
Contracts, Intangible
12
Property, Warranties and Guaranties as itemized in EXHIBIT I (the
"Assigned Contracts") shall be prorated on an accrual basis. Seller
shall pay, prior to the Closing, all such amounts for which a xxxx has
been received or for which payment is otherwise due prior to the
Closing Date, and Seller shall be credited, and Buyer shall be debited,
with any amount of such xxxx applicable to the period following the
Closing Date. Buyer shall pay all other such bills and Buyer shall be
credited, and Seller shall be debited, at the Closing with an estimated
amount of the charges under all such Assigned Contracts applicable to
the period prior to the Closing Date. As soon as all bills for payment
due under the Assigned Contracts are received by and paid by Buyer
after Closing, Buyer shall deliver copies of all such bills to Seller
and the amounts shall be again prorated as of the Closing Date. In such
event, any overpayment by Buyer shall be reimbursed to Buyer by Seller
(which shall be taken from the Prorations Holdback to the extent
available) and any underpayment shall be paid by Buyer to Escrow Holder
to be held as part of the Prorations Holdback.
(f) TENANT IMPROVEMENTS AND LEASING COMMISSIONS. Buyer
shall be responsible for all tenant improvement costs, leasing
commission costs and costs of lease concessions to the extent approved
in writing by Buyer which arise from Qualifying Leases (as hereinafter
defined). "Qualifying Leases" shall include only those leases set forth
on EXHIBIT J and any other leases entered into by and between Seller
and a new or existing tenant following the Effective Date which are
approved by Buyer pursuant to the terms of Section 9.2 of this
Agreement, which approved leases shall be added to EXHIBIT J upon such
approval. Buyer has approved and shall be responsible to pay only the
amount of broker's commissions, tenant improvement allowances and
tenant concessions specified for Qualifying Leases on EXHIBIT J. Seller
shall pay all such amounts to the extent due and payable prior to the
Closing and shall deliver to Buyer and Escrow Holder evidence
reasonably satisfactory of such payments not later than two (2)
Business Days prior to the Scheduled Closing Date and Seller shall be
credited at the Closing with all such sums paid. In addition, Buyer
shall be responsible to pay only those future tenant improvement
allowances, tenant concessions and broker's commissions on or related
to existing Tenant Leases which will or may arise in the future on
existing Tenant Leases as set forth in EXHIBIT K. Seller represents and
warrants to Buyer that any broker's commissions payable pursuant to
EXHIBIT J or EXHIBIT K are payable only to Xxxxx & Xxxxx or CB
Commercial and agrees to obtain a release satisfactory to Buyer in
favor of Buyer from Xxxxx & Xxxxx of any broker's commissions or other
payments related to the Property other than the amounts which are
stated as still outstanding as set forth on said EXHIBIT J or EXHIBIT K
and specified to be payable to Xxxxx & Xxxxx. All other costs of tenant
improvements, leasing commissions, or leasing concessions on Leases
entered into prior to the Effective Date shall be paid by Seller at or
prior to the Closing to the extent due and payable by the Closing Date
and if not so paid shall be deducted from the Purchase Price. Seller
agrees to indemnify, defend and hold Buyer harmless from and against
any claim by CB Commercial or other broker for any commissions other
than a commission (a) which is specified to be payable by Buyer on
EXHIBIT J or EXHIBIT K and (b) for which Seller receives no credit at
the Closing. In addition to the foregoing, Buyer understands that
Seller is entitled to receive from San Francisco Foundation ("SFF") a
reimbursement of tenant improvement costs advanced to or on behalf of
SFF by Seller. To the extent that Buyer receives such reimbursement,
Buyer shall deliver such reimbursement to Seller within ten (10)
Business Days following receipt thereon. Buyer agrees to diligently
pursue obtaining such reimbursement from SFF pursuant to a reasonable
and prudent plan to be agreed upon by Buyer and Seller following the
Effective Date in order to obtain the
13
repayment of such sums and any reasonable costs incurred by Buyer in
pursuing such plan shall be deducted from any such reimbursement prior
to its delivery to Seller.
(g) OTHER ITEMS. All other proratable items, including
licenses and permits being assumed by Buyer (if any; provided that in
no event shall Buyer assume any indemnification obligations of Seller)
and other income from, and expenses associated with, the Property shall
be prorated between Buyer and Seller as of the Closing.
Buyer and Seller's obligation to prorate shall survive the Closing. Buyer and
Seller shall use good faith efforts to conclude prorations with respect to
operating expenses and other proratable amounts as soon as practicable after the
determination of the amounts thereof. Nothing in the Assignment and Assumption
of Leases and Rents shall be construed to amend, modify or diminish in any way
the provisions of this Section 5.7. Escrow Holder shall hold back from the sums
due Seller at the Closing the sum of Fifty Thousand Dollars ($50,000) and place
such sum in a federally insured interest bearing account ("Prorations Holdback")
until that date which is the later to occur of (a) ninety (90) days following
the Closing Date or (b) submission by Buyer and Seller to Escrow Holder of a
post-closing proration statement (which Buyer and Seller shall commence to
complete no later than seven (7) Business Days prior to the end of such ninety
(90) day period and shall attempt in good faith to complete prior to the end of
such ninety (90) day period. Escrow Holder shall distribute to Buyer from the
Prorations Holdback any amounts payable to Buyer pursuant to such post-closing
proration schedule and deliver the remainder to Seller. Any disbursements to
Buyer from the Prorations Holdback shall also include interest at the rate
earned in such account on the amount disbursed from the Closing Date until
disbursement. Such disbursement shall not affect Buyer's and Seller's continuing
obligations under this Section 5.7.
5.8 COSTS AND EXPENSES.
(a) Seller shall bear and pay all legal fees and
costs incurred by Seller, the cost of any documentary or other transfer taxes
applicable with respect to the sale of the Real Property, mailing or delivering
the Notice Letters as provided in Section 5.9 and other fees and charges which
are typically borne by sellers in the usual and customary practice in the City
and County of San Francisco. All costs payable by Seller under this Section 5.8
shall be deducted from Seller's proceeds at Closing.
(b) Buyer shall pay for its out-of-pocket expenses,
all due diligence, legal fees and costs incurred by Buyer in connection
herewith, and document recordation fees, the premium for the Title Policy and
endorsements thereto, all sales tax, if any, applicable with respect to the sale
of the Personal Property and/or the Intangible Property, the Escrow Holder's
fees and charges, and other fees and charges which are typically borne by buyers
in the usual and customary practice in the City and County of San Francisco. All
costs payable by Buyer under this Section 5.8 shall be paid by Buyer to Escrow
Holder by immediately available funds.
5.9 CLOSING AND RECORDATION. Provided that Escrow Holder
has received all of the items required to be delivered pursuant to this Article
V (or a waiver from the party for whose benefit such item is being delivered)
and Buyer has not elected to terminate its rights and obligations hereunder, as
provided in this Agreement, and provided that Buyer has either received the
Title Policy or the irrevocable commitment of Title Company to provide it with
the Title Policy immediately after recordation of the Deed, Escrow Holder is
authorized and instructed (a) with respect to the Property, to cause the Title
Company to record the
14
documents delivered to the Escrow Holder in accordance with recording
instructions set forth in a letter to be delivered to Escrow Holder and Title
Company by Buyer and deliver a conformed copy to both Buyer and Seller of all
such documents within one (1) Business Day following Closing, (b) to deliver
those other documents and instruments delivered into Escrow to the party for
whose benefit such documents or instruments were made and (c) to deliver the
Purchase Price, as adjusted pursuant to Sections 5.7 and 5.8 hereof, to Seller
upon receiving confirmation of recording of the Deed and (d) to mail the Notice
Letters by certified U.S. mail return receipt requested, except to the extent
personal delivery is requested in which case such Notice Letters shall be sent
by personal delivery, and Escrow Holder shall cause the deliverer to execute a
certification of delivery and obtain an acknowledgment of receipt from the
recipient.
5.10 TERMINATION OF AGREEMENT.
(a) FAILURE OF BUYER'S CONDITIONS. If any one or more
of the conditions to Buyer's obligations, as set forth in Article IV, Section
5.5 or elsewhere in this Agreement, is not either fully performed, otherwise
satisfied, or waived in writing (or deemed waived as provided herein) on or
before the Closing Date or such earlier date as provided elsewhere herein, then
Buyer may elect, by written notice as provided in Section 12.10 hereof, to
terminate this Agreement, in which case neither party shall have any further
obligation to the other (except as set forth in Sections 5.2(b), 12.5 hereof and
this Section 5.10(a)). Nothing in this paragraph shall be construed to limit any
of Buyer's rights or remedies at law or equity in the event of a default by
Seller.
(b) FAILURE OF SELLER'S CONDITIONS. If any one or
more of the conditions to Seller's obligations, as set forth in Section 5.5 or
elsewhere in this Agreement, is not either fully performed, otherwise satisfied
or waived in writing (or deemed waived as provided herein) on or before the
Closing Date or such earlier date as provided elsewhere herein, then Seller may
elect, by written notice as provided in Section 12.10 hereof, to terminate this
Agreement and neither party shall have any further obligation to the other
(except as set forth in Sections 5.2(b) and 12.5 hereof and this Section
5.10(b). Nothing in this paragraph shall be construed to limit Seller's rights
under Section 2.4 in the event of a default by Buyer).
ARTICLE VI
REPRESENTATIONS, WARRANTIES AND
COVENANTS OF SELLER
As an inducement to Buyer to enter into this Agreement and the
consummation of the transaction contemplated hereby, Seller hereby represents
and warrants to and agrees with Buyer both as of the Effective Date and again as
of the Closing Date, and as of all dates and times in between (except as
specifically provided to the contrary herein), as set forth below. For purposes
of representations made to the Seller's knowledge, such knowledge shall be
deemed to be the knowledge of Xxxxx Xx, Xxxxxx Xxx or Xxxx Xxxxx.
6.1 AUTHORITY. Seller is duly organized and validly
existing under the laws of the jurisdiction of its organization, is duly
qualified to conduct business and own real property in the State of California,
and has all requisite power to own all of its properties and assets and to carry
on its business as presently conducted. The execution, delivery and
15
performance of this Agreement and all other agreements contemplated hereby has
been duly and validly authorized by all necessary action of Seller and this
Agreement and all other agreements contemplated hereby are and will be valid and
binding obligations of Seller, enforceable against Seller in accordance with
their respective terms.
6.2 TITLE. Seller holds fee simple title to the Real
Property, and to the best of Seller's knowledge, such fee simple title is free
and clear of all liens, encumbrances, security interests, charges, adverse
claims and other exceptions to title, except for the Leases, matters of record,
matters disclosed by the Due Diligence Materials and the Permitted Exceptions.
Nothing in the Deed shall be construed to amend, modify or diminish the
effectiveness or survival of the foregoing representation. Seller holds title to
all other Property free and clear of all liens, pledges, charges, security
interests or other impositions.
6.3 DUE DILIGENCE MATERIALS. Seller has delivered and/or
made available to Buyer true, complete and correct copies of any and all
material documents, contracts and correspondence in Seller's possession, custody
or Control that relate to the Property, including without limitation, the items
set forth in the Schedule of Due Diligence Materials attached hereto as EXHIBIT
L (collectively, the "Due Diligence Materials"). The term "Control" for purposes
of this Agreement means legal control, including without limitation the right to
require an agent or contractor to deliver such item to the party allegedly
having control of such item. Except as otherwise disclosed in writing to Buyer
prior to the Due Diligence Date, Seller represents and warrants that the
information contained in the Due Diligence Materials is accurate or complete and
that it contains no material omissions except for the Due Diligence Materials
created by any third party. Seller represents that Seller has no actual
knowledge, without having carried out any inquiry or due diligence, of any such
inaccuracy, incompleteness or material omissions as to any Due Diligence
Materials prepared by a third party, except as otherwise disclosed in writing to
Buyer prior to the Effective Date.
6.4 THE LEASES. A list of the current Leases in effect on
the Effective Date is set forth in the rent roll attached hereto as EXHIBIT M
(the "Rent Roll"). All information contained in the Rent Roll is accurate and
consistent with Seller's records, which records have been maintained by Seller
in accordance with good property management standards. Except for the Leases set
forth in the Rent Roll, there are no other oral or written leases, licenses or
other agreements affecting the occupancy of the Property or any oral or written
amendments to any lease not specified on the Rent Roll. Seller shall have paid,
on or prior to Closing, all brokers' commissions and tenant improvement costs
and other concessions by landlord under the Leases to the extent due and payable
as of the Closing Date.
6.5 NO LITIGATION OR ADVERSE EVENTS. Seller has received
no written notice of, and to the best of Seller's knowledge, there are no,
pending or threatened investigations, actions, suits, proceedings or claims
against or affecting Seller or the Property, at law or in equity or before or by
any federal, state, municipal or other governmental department, commission,
board, agency, or instrumentality, domestic or foreign.
6.6 COMPLIANCE WITH LAWS. Except as otherwise disclosed
to Buyer in writing prior to the Effective Date, Seller is not in violation in
any material respect of any applicable laws, ordinances, rules and regulations
(including without limitation those relating to zoning) applicable to the
ownership or operation of the Property. The representation set forth in this
Section specifically excludes any representation as to the Americans With
Disabilities Act and that section of Title 24 of the California Code of
Regulations to the extent that said Title 24 sets forth regulations concerning
accessibility for persons with disabilities. In addition, the representation set
forth herein is made to the best of Seller's
16
knowledge, but specifically without the requirement that Seller have hired any
architects or engineers to specifically confirm that the representation made
herein is true and correct, unless such confirmation would be necessary or
appropriate in the customary management of similar buildings. In addition,
except as otherwise disclosed to Buyer in writing prior to the Effective Date,
Seller has not received from any insurance company or Board of Fire Underwriters
or any governmental authority any notice, which remains uncured, of any defect
or inadequacy in connection with the Property or its operation.
6.7 NO DEFAULTS IN OTHER AGREEMENTS. Except as disclosed
in writing to Buyer prior to the Effective Date, Seller has neither given nor
received written notice that Seller or any other party is in material default
under any contract, including the Leases, affecting the Property or under any
covenants, conditions, restrictions, rights-of-way or easements affecting the
Property nor, to the best of Seller's knowledge, has any such material default
occurred nor does any event exist which, with the passage of time or the giving
of notice or both, will become a material default thereunder on the part of any
other party thereto.
6.8 LICENSES AND PERMITS AND CONTRACTS. Except as
disclosed in writing to Buyer prior to the Effective Date, to the best of
Seller's knowledge, all permits, certificates of occupancy, business licenses
and all other notices, licenses, permits, certificates and authority required as
of the Effective Date and as of the Closing Date in connection with Seller's use
or occupancy of the Property have been obtained and are in full force and effect
and in good standing and copies of all such items have been delivered to Buyer.
To the best of Seller's knowledge, there are no written or oral contracts to
which Buyer or the Property may be subject other than the Leases, the Assigned
Contracts and the Short Termination Contracts.
6.9 TAXES AND ASSESSMENTS. To the best of Seller's
knowledge, there is no proposed assessment that has or may become a lien on the
Property.
6.10 EMPLOYEES. Seller has no employees who will have any
rights to employment at the Property after Closing.
6.11 OPERATING STATEMENTS. To the best of Seller's
knowledge, any financial statements delivered by Seller to Buyer fairly present
the profit or loss from the management and operation of the Property for the
periods covered thereby and, in all material respects, accurately reflect all
rents and other gross receipts, and all amounts paid by Seller for electricity,
water, sewer, other utility services, insurance, fuel, maintenance and repairs
(whether capitalized or expensed), real estate taxes, payroll and payroll taxes
and all other operating and other expenses associated with the Property.
6.12 DISCLOSURE. To the best of Seller's knowledge, no
representation or warranty of Seller in this Agreement, or statement or
certificate furnished or to be furnished by Seller or at Seller's direction
pursuant to this Agreement contains or shall contain any materially untrue
statement of a material fact or omits or shall omit to state a material fact
necessary to make the statements contained therein not misleading, nor does
Seller have actual knowledge of any material defect in the Property not
disclosed to Buyer in writing prior to the Effective Date.
6.13 NO LEASES OF PROPERTY OR ASSETS. No material portion
of the Personal Property or fixtures with respect to the Property (other than
fixtures owned or installed by tenants) is leased by the Seller as lessee.
17
6.14 DISCLOSURES TO OTHER POTENTIAL PURCHASERS. Seller has
not and will not fail to disclose to any other potential purchaser of the
Property of the existence of this Agreement. Seller has not entered into any
other agreements for the sale of the Property.
6.15 CHANGES IN REPRESENTATIONS AND WARRANTIES. In the
event that a representation and warranty of Seller was true when made but
becomes no longer true prior to the Closing due to events following the
Effective Date which were not caused by Seller or Seller's agents, Seller shall
notify Buyer within one (1) Business Day of learning that such representation or
warranty is no longer true and specifying in detail the event that caused such
change ("Change in Representation"). In the event that the aggregate of (a) all
costs to remedy the event which led to the Change in Representation in order to
cause the Property and the Buyer to be placed in the condition that would make
the representation true and correct to the extent such remedy is possible
("Representation Cure") and (b) the decrease in value of the Property, to the
extent the Change in Representation cannot be remedied, from the value if the
representation were true and correct (together, "Representation Reduced Value")
exceed Five Hundred Thousand Dollars ($500,000) ("Representation Reduction
Limit"), Buyer shall have until the later of the Scheduled Closing Date or (ii)
five (5) Business Days following Buyer's receipt of such notification, within
which to give Seller and Escrow Holder written approval of any such Change in
Representation or written notice outlining any Change in Representation objected
to and specifying if applicable, Buyer's desired cure. Buyer's failure to
provide any such notice shall be deemed disapproval of the Change in
Representation and this Agreement shall terminate. Seller shall have five (5)
Business Days after receipt of Buyer's notice to advise Buyer and Escrow Holder,
in writing, as to whether Seller shall cure said objections prior to the Closing
or cure such objections to the extent that the Representation Reduced Value
following such cure does not exceed the Representation Reduction Limit. Seller's
failure to advise Buyer of Seller's election within such five (5) Business Day
period shall be deemed an election to refuse to so cure said objections. If
Seller elects to so cure, completion of such cure shall be a covenant by Seller
as well as a condition to Buyer's obligation to purchase the Property. In the
event Seller elects, or is deemed to elect, not to cure Buyer's objections to
the Change in Representation, Buyer shall have the option within five (5)
Business Days following receipt of Seller's election or, if Seller fails to so
notify Buyer, within five (5) Business Days following the last date provided
herein for Seller to give such notice, to (A) waive Buyer's objections and
purchase the Property as otherwise contemplated in this Agreement,
notwithstanding such objections, or (B) terminate this Agreement by written
notice to Seller and Escrow Holder. Buyer's failure to so notify Seller within
such five (5) Business Day period shall be deemed Buyer's election to terminate
this Agreement. In the event Buyer waives its objections and elects to purchase
the Property or in the event the Representation Reduced Value is in excess of
$100,000 but less than the Representation Reduction Limit, the Purchase Price
shall be reduced by the Representation Reduced Value up to the Reduction Limit
(but shall not be reduced if the Representation Reduced Value is less that
$100,000). Notwithstanding the foregoing, any Change in Representation
intentionally caused by Seller, Buyer shall have the right to elect to require
that Seller remedy such Change in Representation Seller prior to Closing or, at
Buyer's election, the full Reduced Value shall be deducted from the Purchase
Price. Such remedies shall not limit any other remedy of Seller resulting from
such intention causation by Seller. To the extent the time periods for notice,
objection, approval or waiver cause the time period permitted therefor to extent
beyond the Scheduled Closing Date, the parties agree that the Scheduled Closing
Date shall be extended to the extent necessary to permit the parties to utilize
the time periods set forth in this Section.
18
The representations and warranties set forth in this Article
VI or elsewhere in this Agreement shall survive the execution and delivery of
this Agreement, the delivery of the Deed and transfer of title to the Property.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF BUYER
As an inducement to Seller to enter into this Agreement and
the consummation of the transaction contemplated hereby, Buyer hereby represents
and warrants to and agrees with Seller both as of the date hereof and again as
of the Closing Date, and as of all dates and times in between (except as
specifically provided to the contrary herein), as set forth below.
7.1 ORGANIZATION. Buyer is a corporation duly organized
and validly existing under the laws of the State of Florida and will be duly
qualified to own real property in the State of California by the Closing Date.
7.2 AUTHORIZATION. The execution, delivery and
performance of this Agreement and all documents executed by Buyer which are to
be delivered to Seller at the Closing are, and as of the Closing Date will be,
duly authorized, executed and delivered by Buyer.
7.3 BINDING OBLIGATION. This Agreement and all executed
by Buyer which are to be delivered to Seller at the Closing are and as of the
Closing Date will be legal, valid and binding obligations of Buyer enforceable
against Buyer in accordance with their respective terms, and do not and as of
the Closing Date will not violate any provisions of any agreement or judicial
order to which Buyer is a party or to which it is subject.
7.4 "AS IS". Buyer agrees to purchase the Property "as
is" and "with all faults," solely in reliance on Buyer's own investigation of
the Property. Buyer acknowledges that it has conducted or will conduct an
investigation of the physical condition of the Property, the present and
proposed land use regulations that affect or may affect the Property and the
fitness of the Property for Buyer's proposed uses, among other things. In
undertaking its investigation, Buyer has been or will be advised by its own
architects, attorneys, engineers and other advisors.
(a) NO OTHER WARRANTIES. Buyer acknowledges that
Seller makes no representations or warranties express or implied with
respect to the Property except as may be made in the Agreement. In
light of Buyer's diligent investigation and evaluation of the Property
and acceptance of the Property on an "as is" and "with all faults"
basis, the parties have negotiated the terms and conditions of this
Agreement, including the Purchase Price and the representations and
warranties by Seller set forth in this Agreement. By acknowledging
satisfaction of the conditions precedent to the Closing contained in
this Agreement (or waiving one or more of those conditions), Purchaser
acknowledges that except as provided in the representations and
warranties in this Agreement, Buyer is purchasing the Property "as is"
and "with all faults," without other express or implied warranties of
Seller.
(b) BUYER INSPECTIONS. By acquiring the Property and
except as otherwise provided in any representation, warranty or
covenant of Seller in this
19
Agreement, Buyer shall be deemed to have (i) waived any and all
objections to the physical characteristics, including the condition of
the Improvements to the Property, which would be disclosed by such
inspection or otherwise, and (ii) agreed to purchase the Property
having inspected and accepted the condition of the Property, and
without regard to any other physical or environmental condition of the
Property, including without limitation, topography, acreage, climate,
soil, subsoil, existing fill, drainage and surface and groundwater
quality, and without regard to air and water rights, the availability
of utilities and water, present and future zoning, purposes for which
the Property is suited, access to public roads, proposed routes, or
enlargement of roads or extensions thereof, or any other condition or
matter affecting the Property.
(c) WAIVER. In order to more practically implement
the "as-is" nature of the conveyance of the Property, and except for
any obligations or representations and warranties specifically set
forth in this Agreement, which shall not be affected by the terms of
this waiver and release, Buyer hereby waives, releases, acquits, and
forever discharges Seller, and Seller's agents, directors, officers and
employees to the maximum extent permitted by law, of and form any and
all claims, actions, causes of action, demands, rights, liability,
damages, losses, costs, expenses, or compensation whatsoever, direct or
indirect, known or unknown, foreseen or unforeseen, that it now has or
which may arise in the future on account of or in any way growing out
of or connection with (i) the existence of any condition of any
Improvement of the Property, (ii) the physical and environmental
condition of the Property, and (iii) the state of title to the
Property. BUYER EXPRESSLY WAIVES ANY OF ITS RIGHTS GRANTED UNDER
CALIFORNIA CIVIL CODE SECTION 1542, WHICH PROVIDES AS FOLLOWS: "A
GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASES, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR."
--------------------------------
Buyer's Initials
ARTICLE VIII
POSSESSION, DESTRUCTION AND CONDEMNATION
8.1 POSSESSION. Possession of the Property shall be
delivered to Buyer on the Closing Date, subject to the Leases described on the
Rent Roll or otherwise approved by Buyer. Without limiting any other provisions
of this Agreement, Seller shall afford authorized representatives of Buyer
reasonable access to the Property for the purposes of determining Seller's
compliance herewith; however, in no event shall such right give rise to any
obligation of Buyer to determine compliance or noncompliance.
8.2 LOSS, DESTRUCTION AND CONDEMNATION.
(a) NOTICE BY SELLER. Seller will notify Buyer within
two (2) Business Days of Seller's receipt of knowledge of any casualty or
threatened taking which occurs following the date of this Agreement and prior to
the Closing Date ("Casualty Notice" in the event of a casualty and "Condemnation
Notice" in the event of a taking). Within ten (10) days following Buyer's
receipt of a Casualty Notice, Seller shall provide Buyer with two
20
estimates from reputable contractors as to the cost and time to fully repair
such damage ("Contractor Estimates") and Buyer shall have the right to obtain up
to two additional Contractor Estimates. Seller's Condemnation Notice to Buyer
shall indicate if the taking or threatened taking is a "material" taking.
(b) DEFINITION OF MATERIAL DAMAGE. For the purposes
of this Section 8.2, damage to the Property is "material" if (i) the actual cost
of repairing or replacing the damaged portions of the Improvements on the
Property as indicated by any of the Contractor Estimates exceeds Five Hundred
Thousand Dollars ($500,000.00), or (ii) if any of the Contractor Estimates
indicates it would take longer than one hundred eighty (180) days to perform
such repair or replacement using reasonably diligent efforts, or (iii) if any
tenant leasing rentable space in excess of 10,000 square feet has the right to
xxxxx any rent under its lease as a result of such damage and there is not full
rental interruption coverage with respect thereto available to Buyer through and
after the Closing Date until the estimated date of reconstruction, or (iv) if
any tenant leasing rentable space in excess of 10,000 square feet in the Real
Property has a right to terminate its lease (or leases) as a result of such
damage and does not irrevocably waive such right prior to Closing in a form
reasonably acceptable to Buyer.
(c) EFFECT OF NON-MATERIAL DAMAGE TO IMPROVEMENTS. If
prior to the Closing the Improvements on the Property are damaged by casualty
and such damage is not material, (i) this Agreement may not be terminated by
reason of such casualty (provided that this does not waive Buyer's other
termination rights under this Agreement) and (ii) Seller will, at Buyer's
option, either (a) cause the damaged portion of the Improvements to be repaired
at Seller's sole cost and expense if such repair can be completed prior to the
Closing or (b) assign to Buyer all insurance proceeds payable as a result of
such damage and reduce the Purchase Price by an amount equal to the actual,
reasonable and necessary cost of repairing or replacing the damaged portions of
the Improvements less the amount of such insurance proceeds received by Buyer.
In the event Seller is obligated to so repair the Improvements prior to Closing
and the Improvements are not so completed, Buyer may elect to postpone the
Scheduled Closing Date for up to ten (10) Business Days to enable such work to
be completed, provided that Seller shall have the right to close the Escrow
(either before or after such postponement of the Scheduled Closing Date) and
deduct from the Purchase Price the cost of the incomplete repairs.
(d) EFFECT OF MATERIAL DAMAGE TO IMPROVEMENTS. If
prior to the Closing the Improvements are damaged by casualty and such damage is
material, Buyer shall elect in writing within ten (10) Business Days of receipt
of Seller's Contractor Estimates either to (i) terminate this Agreement, in
which case the Deposit shall be refunded to Buyer and neither party shall have
further obligation (except as set forth in Section 12.2 and other obligations
specified in this Agreement to survive such termination) or (ii) purchase the
Property, in which event (A) all insurance proceeds payable as a result of such
damage shall be assigned to Buyer, and (B) the Purchase Price shall be reduced
by the amount to so restore such damaged Improvements to their condition
existing prior to such damages, less any insurance proceeds received by Buyer;
provided, however that such reduction shall not exceed a reduction of Five
Hundred Thousand Dollars ($500,000).
(e) DEFINITION OF MATERIAL TAKING. For the purposes
of this Section 8.2, a taking or threatened taking by eminent domain or similar
proceedings shall be deemed material if (i) the value of that portion of the
Property to be so taken exceeds Five Hundred Thousand Dollars ($500,000.00),
(ii) Buyer determines that the Property is materially and adversely affected by
such taking or threatened taking, including without
21
limitation any change in zoning or permitted uses, (iii) any tenant with an
excess of 10,000 square feet of rentable space not included within the portion
of the Property to be taken has the right to xxxxx any rent under its lease as a
result of such taking or threatened taking in excess of a pro-rata reduction, or
(iv) any tenant with an excess of 10,000 square feet of rentable space not
included within the portion of the Property to be taken has a right to terminate
its lease (or leases) as a result of such taking or threatened taking and does
not irrevocably waive such right prior to Closing in a form reasonably
acceptable to Buyer.
(f) EFFECT OF NON-MATERIAL TAKING. If prior to the
Closing there is a taking or threatened taking of a portion of the Property
which is not material, (i) this Agreement may not be terminated by reason of
such taking or threatened taking and (ii) Seller will assign to Buyer at the
Closing all of Seller's rights in and to any condemnation award with respect to
such non-material taking, and there will be no reduction in the Purchase Price.
Seller will deliver written notice to Escrow Holder and Buyer within two (2)
Business Days after Seller receives notice of or otherwise becomes aware of any
taking or threatened taking affecting the Property.
(g) EFFECT OF MATERIAL TAKING. If prior to the
Closing there is a taking or threatened taking that is material, within ten (10)
Business Days after Buyer's receipt of Seller's Condemnation Notice, Seller and
Buyer shall endeavor to agree upon whether the Property shall be purchased by
Buyer, and any reduction in the Purchase Price, any agreed upon delay in Closing
and any assignment of any condemnation award with respect to such taking. If
within such ten (10) Business Day period Buyer and Seller have not reached a
mutually acceptable agreement as to those matters, Buyer within thirty (30) days
thereafter may elect in writing to (i) continue this Agreement subject to the
taking or threatened taking with an assignment of all of Seller's rights to
condemnation awards, severance damages, payments-in-lieu thereof or the like; or
(ii) terminate this Agreement, in which case Buyer and Seller shall have no
further rights or obligations to one another under this Agreement. Buyer's
failure to have elected any of these options within the time period allotted
therefor shall be deemed to be an election of option (ii).
ARTICLE IX
MAINTENANCE AND OPERATION OF THE PROPERTY;
COVENANTS
9.1 MAINTENANCE. In addition to Seller's other
obligations hereunder, Seller shall, upon and after the date of this Agreement
and to and including the Closing Date, at Seller's sole cost and expense,
maintain the Property in the ordinary course of business consistent with past
practice, pay all taxes, assessments, fines, penalties, charges and other
operating expenses, and shall make all repairs, maintenance and replacements of
the Improvements and any Personal Property and otherwise operate the Property in
its ordinary and customary manner, and otherwise in the same manner as before
the making of this Agreement, the same as though Seller were retaining the
Property. Seller shall not make any alterations to the Property costing in
excess of $20,000 without first receiving Buyer's prior written consent thereto,
which consent shall not be unreasonably withheld. Buyer hereby consents to such
alterations which may be required to be made by Seller under the Leases with
IKON, San Francisco Foundation or IDG, provided that such alterations are made
in good and workmanlike manner consistent with building standards and according
to plans and
22
specifications approved by Buyer, which approval shall not be unreasonably
withheld or delayed.
9.2 LEASES AND OTHER AGREEMENTS. After the date hereof,
without Buyer's prior written consent, which consent may be withheld in Buyer's
sole and absolute discretion, Seller shall not enter into any agreement or
contract with respect to the Property, including without limitation any Lease,
or any amendment, modification or supplement thereto, which is not terminable on
thirty (30) days' prior notice (without premium or penalty). In addition, Seller
shall not provide any consent or approval under such agreement or contract, nor
deliver any notice of default thereunder, without the prior written consent of
Buyer, which Buyer may withhold on the basis of the same standard as applicable
to Seller under the applicable contract or agreement. This Section 9.2 shall be
deemed to apply to any and all agreements, contracts, and leases. In addition,
Seller shall comply with all of its obligations under the Leases and Assigned
Contracts up to the Closing.
9.3 ENCUMBRANCES AND TITLE MATTERS. Seller shall not, in
between the date of this Agreement and the Closing Date, mortgage, encumber or
suffer to be encumbered all or any portion of the Property, which encumbrances
would survive the Closing Date, without the prior written consent of Buyer nor
permit any additional exceptions to title other than the Permitted Exceptions.
9.4 CONSENTS AND NOTICES. Seller and Buyer shall
cooperate with each other and exercise commercially reasonable efforts to obtain
as of the Closing Date, all consents from, and provide all notices to, any third
party and any governmental or regulatory authority which are required pursuant
to any contract or any applicable laws as a condition to or in connection with
the execution, delivery or performance of this Agreement or other documents and
instruments contemplated thereby.
9.5 AUDIT COOPERATION. Seller hereby agrees to cooperate
with Buyer in Buyer's producing audited financial statements for the Property
for such periods as may be requested by Buyer. Such cooperation shall include,
without limitation, the execution and delivery by Seller to Buyer's auditors of
such confirmations and letters as such auditors may reasonably require. This
Section 9.5 shall survive the Closing. All costs of such audit shall be borne by
Buyer.
ARTICLE X
1031 EXCHANGE
Buyer acknowledges that Seller may include the transfer of the
Property in a "like kind exchange" in accordance with Section 1031 of the United
States Internal Revenue Code and agrees to cooperate with Seller's reasonable
requests related thereto; provided, however, that no such cooperation or
contemplated exchange may cause the Scheduled Closing Date to be extended as a
result, nor shall Buyer be obligated to incur any cost or other potential legal
or economic limitation or exposure as a result thereof.
23
ARTICLE XI
CONFIDENTIALITY
11.1 CONFIDENTIALITY AGREEMENT OF BUYER AND SELLER.
(a) Buyer, Seller and Escrow Holder agree that it is
an essential economic element of this Agreement that any proprietary information
related to Seller, Buyer or the Property (other than that which is reflected in
the public record) revealed in connection with the transactions contemplated
hereby or concerning the existence and terms of this Agreement remain strictly
confidential. Therefore, Buyer, Seller and Escrow Holder hereby agree to
strictly maintain the confidentiality of such information as may be revealed
during the course of the offers, counteroffers and other negotiations relating
to this Agreement and Buyer's acquisition of the Property or during the course
of Buyer's investigation and reviews relating to the acquisition of the
Property.
Notwithstanding the provisions of this Article XI, each party
shall be authorized to disclose information concerning this transaction or the
Property to the extent necessary or appropriate to carry out the terms of the
Agreement and to the extent such disclosure is required by law or pursuant to
valid legal process.
11.2 END OF CONFIDENTIALITY PERIOD. The obligation
pursuant to Section 11.1 shall terminate upon the first to occur of (a) the
acquisition by Buyer of the Property or (b) the termination of this Agreement.
ARTICLE XII
MISCELLANEOUS
12.1 NOTICES. Any notice required or permitted to be given
under this Agreement shall be in writing and personally delivered or sent by
United States mail, registered or certified mail, postage prepaid, return
receipt requested, by facsimile transmission, or sent by Federal Express or
similar nationally recognized overnight courier service, and addressed as
follows, and shall be deemed to have been given upon the date of delivery (or
refusal to accept delivery) at the address specified below as indicated on the
return receipt or air xxxx:
If to Seller: Pacific Resources Development Inc.
------------ 000 Xxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attn.: Mr. Xxxxx Xx
Phone No.(000) 000-0000
Fax. No.: (000) 000-0000
with a copy to: Xxxxx & XxXxxxxx
Xxx Xxxxxxxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attn.: Xxxxxxx Xxxxxxx
Phone No.: (000) 000-0000
Fax. No.: (000) 000-0000
24
If to Buyer: Ocwen Capital Corporation
----------- 0000 Xxxx Xxxx Xxxxx Xxxxx Xxxx.
Suite 1002
West Palm Beach, Florida 33401
Attn.: Secretary
Phone No.: (000) 000-0000
Fax. No.: (000) 000-0000
with a copy to: Ocwen Capital Corporation
0000 Xxxx Xxxx Xxxxx Xxxxx Xxxx.
Suite 000
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
Attn.: Xxxxxxx X. Xxxxxxx
Phone No.: (000) 000-0000
Fax. No.: (000) 000-0000
with a copy to: Xxxxxx, Xxxx & Xxxxxxxx LLP
0 Xxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxxxx 00000-0000
Attn.: Xxxxx X. Xxxxx, Esq.
Phone No.: (000) 000-0000
Fax No.: (000) 000-0000
If to Escrow Holder: Chicago Title Insurance Company
------------------- 000 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attn.: Xxxxx Xxxx
Phone No.: (000) 000-0000
Fax. 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.
12.2 BROKERS AND FINDERS. Buyer and Seller each hereby
represents and warrants that no broker was involved in this Agreement or the
transactions contemplated hereby except for Xxxxx & Xxxxx Company, whose
commissions are to be paid by Buyer pursuant to a separate agreement. In the
event of a claim for a broker's fee, finder's fee, commission or other similar
compensation in connection herewith other than as set forth above, (i) Buyer, if
such claim is based upon any agreement alleged to have been made by Buyer,
hereby agrees to reimburse, defend, save, protect, indemnify and hold harmless
Seller against any and all out-of-pocket expenses (including reasonable
attorneys' and paralegals' fees and costs) which Seller may sustain or incur by
reason of such claim and (ii) Seller, if such claim is based upon any agreement
alleged to have been made by Seller, hereby agrees to reimburse, defend, save,
protect, indemnify and hold harmless Buyer against any and all out-of-pocket
expenses (including reasonable attorneys' and paralegals' fees and costs) which
Buyer may sustain or incur by reason of such claim. The provisions of this
Section 12.2 shall survive the Closing or earlier termination of this Agreement.
Buyer and Seller hereby disclaim any intention to benefit Xxxxx & Xxxxx Company
or any other brokers or finders by any express or implied promise contained in
this Agreement and in the event that the Closing fails to occur for any reason,
including by reason of Buyer's or Seller's default, neither Buyer
25
nor Seller shall be liable for Xxxxx & Xxxxx' or any other broker's or finder's
claim in connection herewith unless otherwise agreed in writing by the party
agreeing to be so liable.
12.3 SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon, and inure to the benefit of, the parties hereto and their
respective successors and assigns, except that neither Seller's nor Buyer's
interest under this Agreement may be assigned, encumbered or otherwise
transferred whether voluntarily, involuntarily, by operation of law or
otherwise, without the prior written consent of the other, which consent may be
withheld in the sole discretion of the consenting party. Notwithstanding the
foregoing, Buyer shall have the right to assign its right, title and interest
under this Agreement to an affiliate of Seller, including Ocwen California
Partnership II or III, L.P. There shall be no third party beneficiaries to this
Agreement.
12.4 AMENDMENTS. This Agreement may be amended or modified
only by a written instrument executed by the party asserted to be bound thereby.
12.5 CONTINUATION AND SURVIVAL OF INDEMNITIES,
REPRESENTATIONS, WARRANTIES AND POST-CLOSING OBLIGATIONS. All indemnities,
representations and warranties by, and all of the post-closing obligations, if
any, of, the respective parties contained herein or made in writing pursuant to
this Agreement or any other instrument delivered by Seller pursuant hereto are
intended to and shall remain true and correct and binding as of the time of
Closing and shall survive the execution and delivery of this Agreement, the
delivery of the Deed and transfer of title. Seller's representations and
warranties shall survive for one (1) year following the closing.
12.6 INTERPRETATION. Whenever used herein, the term
"including" shall be deemed to be followed by the words "without limitation."
Words used in the singular number shall include the plural, and vice-versa, and
any gender shall be deemed to include each other gender. The captions and
headings of the Articles and Sections of this Agreement are for convenience of
reference only, and shall not be deemed to define or limit the provisions
hereof. Any references to the square footage of any Lease are intended solely
for the purposes of this Agreement and may not be used or relied upon by any
unrelated third party.
12.7 GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of California.
12.8 MERGER OF PRIOR AGREEMENTS. This Agreement (including
the exhibits hereto) constitutes the entire agreement between the parties with
respect to the purchase and sale of the Property specifically described herein
and supersedes all prior and contemporaneous (whether oral or written)
agreements and understandings between the parties hereto relating to the
specific subject matter hereof.
12.9 ATTORNEYS' FEES. In the event of any action or
proceeding at law or in equity between Buyer and Seller to enforce or interpret
any provision of this Agreement or to protect or establish any right or remedy
of either Buyer or Seller hereunder, both sides shall be responsible for their
own costs and attorney's fees notwithstanding which party prevails. In the event
of any action or proceeding between Buyer or Seller and the trustee or debtor in
possession the other party hereto if such party is a debtor in a proceeding
under the Bankruptcy Code (Title 11 of the United States Code or any successor
statute to such Code) the party which is not a debtor shall be entitled to all
costs and expenses, including without limitation reasonable attorneys' and
paralegals' fees and expenses (including without
26
limitation fees, costs and expenses of experts and consultants), incurred in
such action or proceeding and in any appeal in connection therewith together
with all costs of enforcement and/or collection of any judgment or other relief.
12.10 NOTICE OF TERMINATION. If either Buyer or Seller
elects to terminate this Agreement as the result of a default by the other party
or the failure of a condition (other than a termination pursuant to Article IV
for which the provision of said Article IV shall control) or pursuant to Section
5.2(b), it will submit to Escrow Holder and the other party hereto a written
notice of termination. If Escrow Holder receives such a notice of termination,
it is instructed to fax and deliver by overnight delivery service a copy to the
other party within one (1) Business Day of its receipt by Escrow Holder. If
Escrow Holder has not received a written objection from the other party within
five (5) Business Days after receipt thereof by such other party (unless Escrow
Holder is then in a position to close Escrow, in which event Escrow Holder is
instructed to so close), Escrow Holder is to (i) comply with the instructions
contained in the notice of termination, and (ii) pay cancellation charges out of
any funds on deposit in this Escrow. Failure to so object shall not be deemed to
relieve either party hereto of any liability it may have for any default
hereunder.
12.11 SPECIFIC PERFORMANCE. The parties understand and
agree that the Property is unique and for that reason, among others, Buyer will
be irreparably damaged in the event that this Agreement is not specifically
enforced. Accordingly, in the event of any breach or default in or of this
Agreement or any of the warranties, terms or provisions hereof by Seller, Buyer
shall have the right to demand and have specific performance of this Agreement.
12.12 RELATIONSHIP. It is not intended by this Agreement
to, and nothing contained in this Agreement shall, create any partnership, joint
venture, financing arrangement or other agreement between Buyer and Seller. No
term or provision of this Agreement is intended to be, or shall be, for the
benefit of any person, firm, organization or corporation not a party hereto, and
no such other person, firm, organization or corporation shall have any right or
cause of action hereunder.
12.13 COUNTERPARTS AND FACSIMILE SIGNATURES. This Agreement
may be executed in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute but one and the same
instrument. This Agreement may be executed by delivery of facsimile signatures
(and initials where provided) to the parties and to Escrow Holder, provided,
however, that each party shall as soon as reasonably feasible thereafter deliver
the originals as required pursuant to Section 5.1 of this Agreement.
12.14 TIME OF THE ESSENCE. Time is of the essence in this
Agreement and with respect to all of its terms.
12.15 BUSINESS DAYS; PERFORMANCE DUE ON DAY OTHER THAN
BUSINESS DAYS. The term "Business Day" as used in this Agreement shall mean any
day other than a Saturday, Sunday or any other day on which banking institutions
in the State of California are authorized or obligated by law or executive order
to close. If the time period for the performance of any act called for under
this Agreement expires on a day other than a Business Day, said act may be
performed on the next succeeding Business Day.
27
IN WITNESS WHEREOF, Seller and Buyer have executed this
Agreement as of the date written by their respective signatures below.
BUYER: OCWEN CAPITAL CORPORATION,
a Florida corporation
Date: March 6, 1998 By: /s/ JORDAN X. XXXX
---------------------------------
Name: Jordan X. Xxxx
-------------------------------
Title: Senior Vice President
-------------------------------
SELLER: PACIFIC RESOURCES DEVELOPMENT INC.,
a California corporation
Date: March 6, 1998 By: /s/ XXXXX XX
---------------------------------
Name: Xxxxx Xx
-------------------------------
Title: Vice President
-------------------------------
28
CONSENT OF ESCROW COMPANY
The undersigned Escrow Company agrees to (i) accept the
foregoing Agreement, (ii) be Escrow Holder under the Agreement, and (iii) be
bound by the Agreement in the performance of its duties as Escrow Holder;
however, the undersigned will have no obligations, liability or responsibility
under (a) this consent or otherwise, unless and until the Agreement, fully
signed by the parties, has been delivered to the undersigned, or (b) any
amendment to the Agreement unless and until the amendment is accepted by the
undersigned in writing.
Dated: March 6, 1998
CHICAGO TITLE INSURANCE COMPANY
By: /s/ XXXXXX XXXX
--------------------------------------
Authorized Agent
29
EXHIBIT A
LEGAL DESCRIPTION OF THE PROPERTY
DESCRIPTION
CITY OF SAN FRANCISCO
PARCEL ONE:
BEGINNING AT THE POINT FORMED BY THE INTERSECTION OF THE SOUTHERLY LINE OF XXXX
STREET WITH THE WESTERLY LINE OF SANSOME STREET; RUNNING THENCE SOUTHERLY ALONG
SAID LINE OF SANSOME STREET, 137 FEET AND 6 INCHES; THENCE AT A RIGHT ANGLE
WESTERLY, 206 FEET AND 3 INCHES; THENCE AT A RIGHT ANGLE NORTHERLY, 137 FEET AND
6 INCHES TO THE SOUTHERLY LINE OF XXXX STREET; THENCE AT A RIGHT ANGLE EASTERLY
ALONG SAID LINE OF XXXX STREET, 206 FEET AND 3 INCHES TO THE POINT OF BEGINNING.
BEING A PORTION OF 50 VARA BLOCK NO. 56.
PARCEL TWO:
BEGINNING AT A POINT ON THE SOUTHERLY LINE OF XXXX STREET, DISTANT THEREON 206
FEET AND 3 INCHES WESTERLY FROM THE WESTERLY LINE OF SANSOME STREET; RUNNING
THENCE WESTERLY ALONG SAID LINE OF XXXX STREET, 68 FEET AND 9 INCHES; THENCE AT
A RIGHT ANGLE EASTERLY, 68 FEET AND 9 INCHES; THENCE AT A RIGHT ANGLE NORTHERLY,
137 FEET AND 6 INCHES TO THE POINT OF BEGINNING.
BEING A PORTION OF 00 XXXX XXXXX XX. 00.
PARCEL THREE:
BEGINNING AT A POINT WHICH IS PERPENDICULARLY DISTANT 245 FEET WESTERLY FROM THE
WESTERLY LINE OF SANSOME STREET AND PERPENDICULARLY DISTANT 154 FEET SOUTHERLY
FROM THE SOUTHERLY LINE OF XXXX STREET; RUNNING THENCE NORTHERLY AND PARALLEL
WITH THE WESTERLY LINE OF SANSOME STREET, 16 FEET AND 6 INCHES; THENCE AT A
RIGHT ANGLE WESTERLY, 30 FEET; THENCE AT A RIGHT ANGLE SOUTHERLY, 16 FEET AND 6
INCHES; THENCE AT A RIGHT ANGLE EASTERLY, 30 FEET TO THE POINT OF BEGINNING.
BEING A PORTION OF 50 VARA BLOCK NO. 56.
PARCEL FOUR:
AN EXCLUSIVE EASEMENT, APPURTENANT TO PARCELS ONE, TWO AND THREE ABOVE, AS MORE
PARTICULARLY DESCRIBED IN THE DEED RECORDED DECEMBER 18, 1973, IN BOOK B835,
PAGE 939, OFFICIAL RECORDS, INSTRUMENT NO. W-38605, AFFECTING THE FOLLOWING
DESCRIBED REAL PROPERTY.
BEGINNING AT A POINT ON THE SOUTHERLY LINE OF XXXX STREET, DISTANT THEREON 275
FEET WESTERLY FROM THE POINT OF INTERSECTION OF SAID SOUTHERLY LINE OF XXXX
STREET AND THE WESTERLY LINE OF SANSOME STREET; RUNNING THENCE WESTERLY ALONG
SAID SOUTHERLY LINE OF XXXX STREET, 25 FEET; THENCE AT A RIGHT ANGLE SOUTHERLY,
154 FEET TO A POINT PERPENDICULARLY DISTANT 121 FEET, MORE OR LESS, FROM THE
NORTHERLY LINE OF XXXXXX STREET; THENCE AT A RIGHT ANGLE EASTERLY, 25 FEET;
THENCE AT A RIGHT ANGLE NORTHERLY, 154 FEET TO SAID SOUTHERLY LINE OF XXXX
STREET AND THE POINT OF BEGINNING.
BEING A PORTION OF 00 XXXX XXXXX XX. 00.
PARCEL FIVE:
AN EASEMENT APPURTENANT TO PARCELS ONE, TWO AND THREE FOR A TERM OF 50 YEARS
BEGINNING JANUARY 1, 1975 AND ENDING DECEMBER 31, 2024, HEREINAFTER OVER AND
ACROSS THOSE PORTIONS OF THE NEXT DESCRIBED PARCELS IN PARAGRAPHS A) AND B)
WHICH ARE MORE THAN 53' IN ELEVATION ABOVE THE TOP OF THE EXISTING SIDEWALK IN
SANSOME STREET AT THE JUNCTION OF SAID SIDEWALK AND THE NEXT HEREINAFTER
DESCRIBED PROPERTY FOR THE PURPOSES OF RECEIVING AND ENJOYING LIGHT AND AIR AND
OTHER PURPOSES AS SET FORTH IN THE DOCUMENT RECORDED APRIL 5, 1976, IN BOOK
C149, PAGE 924, TO WIT:
A) COMMENCING AT A POINT ON THE WESTERLY LINE OF SANSOME STREET ONE
HUNDRED THIRTY-SEVEN FEET SIX INCHES (137'6") NORTH OF THE POINT OF
INTERSECTION BETWEEN THE WESTERLY LINE OF SANSOME STREET AND THE
NORTHERLY LINE OF XXXXXX STREET, RUNNING THENCE WESTERLY ONE HUNDRED
TWENTY-TWO FEET NINE INCHES (122'9) THENCE AT RIGHT ANGLES SOUTHERLY
TWENTY FEET (20') THENCE AT RIGHT ANGLES EASTERLY ONE HUNDRED
TWENTY-TWO FEET NINE INCHES (122'9") TO THE WESTERLY LINE OF SANSOME
STREET, AND THENCE AT RIGHT ANGLES NORTHERLY TWENTY FEET (20') TO THE
POINT OF COMMENCEMENT.
BEING A PORTION OF 00 XXXX XXXXX XX. 00.
B) COMMENCING AT A POINT ONE HUNDRED TWENTY-TWO FEET NINE INCHES (122'9")
XXX XXXX OF A POINT ON THE WESTERLY LINE OF SANSOME STREET ONE HUNDRED
THIRTY-SEVEN FEET SIX INCHES (137'6") NORTH OF THE POINT OF
INTERSECTION BETWEEN THE WESTERLY LINE OF SANSOME STREET AND THE
NORTHERLY LINE OF XXXXXX STREET, RUNNING THENCE WESTERLY ONE HUNDRED
TWENTY-TWO FEET THREE INCHES (122'3"), THENCE AT RIGHT ANGLES SOUTHERLY
TWENTY FEET (20'), THENCE AT RIGHT ANGLES EASTERLY ONE HUNDRED
TWENTY-TWO FEET THREE INCHES (122'3") AND THENCE AT RIGHT ANGLES
NORTHERLY TWENTY FEET (20') TO THE POINT OF COMMENCEMENT.
BEING A PORTION OF 00 XXXX XXXXX XX. 00.
LOST 001, BLOCK 0289 (AFFECTS PARCEL ONE)
LOST 007, BLOCK 0289 (AFFECTS PARCELS TWO AND THREE)
The following exhibits have been omitted but are available to the Commission
upon request:
Exhibit B FORM OF DEED
Exhibit C FORM OF ASSIGNMENT AND ASSUMPTION OF LEASES AND RENTS
Exhibit D EXCEPTIONS TO PERSONAL PROPERTY CONVEYED
Exhibit E FORM OF XXXX OF SALE
Exhibit F FORM OF ASSIGNMENT AND ASSUMPTION OF CONTRACTS,
INTANGIBLE PROPERTY, WARRANTIES AND GUARANTEES
Exhibit G TENANT ESTOPPEL FORM
Exhibit H FORM OF NON-FOREIGN CERTIFICATE
Exhibit I LIST OF ASSIGNED CONTRACTS AND SHORT
TERMINATION CONTRACTS
Exhibit J TENANT IMPROVEMENT ALLOWANCES LEASING COMMISSIONS,
AND OTHER CONCESSIONS PAYABLE BY BUYER
ON NEW LEASES
Exhibit K TENANT IMPROVEMENT ALLOWANCES LEASING COMMISSIONS,
AND OTHER CONCESSIONS PAYABLE BY BUYER
ON EXISTING LEASES
Exhibit L SCHEDULE OF DUE DILIGENCE MATERIALS
Exhibit M RENT ROLL
Exhibit N FORM OF NOTICE LETTERS
