Exhibit 1.4
PURCHASE AND SALE AGREEMENT
AND ESCROW INSTRUCTIONS
By and Among
Xxxxxx X. Xxxxxxxxxx and Xxxxx X. Xxxxxxxxxx,
as Sellers
PACIFIC GATEWAY PROPERTIES, INC.,
a New York corporation,
as Buyer
and
Chicago Title Company,
as Escrow Holder
December 18, 1996
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TABLE OF CONTENTS
LIST OF SCHEDULES vi
TABLE OF DEFINED TERMS vii
ARTICLE I PROPERTY 1
1.1. Land 1
1.2. Appurtenances 1
1.3. Improvements 2
1.4. Personal Property 2
1.5. Intangible Property 2
1.6. Leases 2
ARTICLE II PURCHASE PRICE 3
2.1. Purchase Price 3
2.2. Deposits 3
2.3. Payment of Purchase Price 3
ARTICLE III TITLE TO PROPERTY 3
3.1. Title 3
3.2. Xxxx of Sale, Etc. 4
ARTICLE IV BUYER'S INVESTIGATIONS 4
4.1. Delivery of Documents by Seller 4
4.2. Review of Title 5
4.3. Service and Other Contracts 5
4.4. Governmental Permits, Approvals and Regulations 6
4.5. Review Period 6
4.6. Right of Entry 6
4.7. Objections to Survey, Title Report, Property, Leases, or
Other Matters 7
4.8. Cooperation 7
ARTICLE V CONDITIONS PRECEDENT TO CLOSING 8
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5.1. Title Matters 8
5.2. Delivery of Documents 8
5.3. Representations and Warranties 8
5.4. Approval of Update Certificate 8
5.5. Non-Foreign Status of Seller 8
5.6. Use Certificate 9
5.7. Board Approval 9
5.8. Impairment of Property 9
5.9. Litigation 9
5.10. Termination of Employees 9
5.11. Contract Termination 9
B. Seller's Conditions to Closing 10
5.12. Delivery of Documents and Purchase Price 10
5.13. REPRESENTATIONS AND WARRANTIES 11
ARTICLE VI ESCROW; CLOSING, RECORDING AND TERMINATION 11
6.1. Escrow; Deposit with Escrow Holder and Escrow Instructions 11
6.2. Closing 11
6.3. Delivery by Seller 12
6.4. Delivery by Buyer 14
6.5. Other Instruments 15
6.6. Prorations 15
6.7. Costs and Expenses 18
6.8. Closing and Recordation 18
6.9. Termination of Agreement 19
6.10. Release of Deposits 19
6.11. Limitation on Seller's Remedies 19
ARTICLE VII REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER 20
7.1. Condition of Property 20
7.2. Use and Operation 20
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7.3. Land-Use Regulation 21
7.4. Utilities 21
7.5. Use Permits and Other Approvals 21
7.6. Authority of Seller/Interest of Seller in the Property 21
7.7. Use of Property 22
7.8. Hazardous Substances and Asbestos/Indemnification 22
7.9. Reports, Contracts and Other Documents 23
7.10. Leases 23
7.11. Service Contracts and Other Agreements 23
7.12. Agreements Affecting the Property 23
7.13. Matters in Respect of Appurtenances; Title 24
7.14. Litigation 24
7.15. Other Contracts to Convey Property 24
7.16. Property Tax Assessment 24
7.17. Assessment Liens 24
7.18. Full Disclosure 24
7.19. Non-Foreign Status 25
7.20. Condemnation 25
ARTICLE VIII REPRESENTATIONS AND WARRANTIES OF BUYER 26
8.1. Representations and Warranties of Buyer 26
ARTICLE IX DELIVERY OF PROPERTY 26
9.1. Possession 26
9.2. Loss, Destruction and Condemnation 26
ARTICLE X MAINTENANCE AND OPERATION OF THE PROPERTY 28
10.1. Maintenance 28
10.2. Leases and Other Agreements 29
10.3. Consents and Notices 29
ARTICLE XI MISCELLANEOUS 29
11.1. Notices 29
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11.2. Brokers and Finders 30
11.3. Successors and Assigns 30
11.4. Amendments 31
11.5. Continuation and Survival of Indemnities, Representations,
Warranties and Post-Closing Obligations 31
11.6. Interpretation 31
11.7. Governing Law 31
11.8. Merger of Prior Agreements 31
11.9. Attorneys' Fees 31
11.10. Notice of Termination 32
11.11. Specific Performance/Damages 32
11.12. Relationship 32
11.13. Authority 32
11.14. Counterparts 33
11.15. Time of the Essence 33
11.16. Tax Deferred Exchange 33
11.17. Confidentiality/Publicity 33
11.18. Prohibition Against Consideration of Other Purchase
Proposals 33
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LIST OF SCHEDULES
A: Description of the Land
B: Form of Deed
C: Form of Xxxx of Sale
D: Form of Assignment of Intangible Property and
Warranties
E: Form of Assignment of Leases
F: Service Contracts and Other Agreements
G: Approved Contracts
H: Permits, Approvals and Regulations
I: Form of Non-Foreign Certificate
J: Form of Update Certificate
K: Notice to Space Tenants
L: Form of Vendor Estoppel
M: Form of Notice to Vendors
N: Notices to Vendors of Approved Contracts
O: Leases
P: Rent Roll and List of Security Deposits
Q: Form of Vendor Estoppel
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TABLE OF DEFINED TERMS
----------------------
DEFINED TERM SECTION
------- ---- WHERE DEFINED
------ -------
Agreement Introductory Paragraph
Approved Contracts Section 4.3
Appurtenances Section 1.2
Assignee Section 11.4
Assignment of Intangible Property and Warranties Section 1.5
Assignment of Leases Section 1.6
Xxxx of Sale Section 1.4
Buyer Introductory Paragraph
CC&R's Section 7.7
CEQA Section 7.2
Closing Section 6.2
Closing Date Section 6.2
Code Section 5.5
Contracts Section 4.3
Deed Section 1.1
Deposits Section 2.2.
Escrow Section 6.1
Escrow Holder Introductory Paragraph
Governmental or Regulatory Authority Section 7.2
Hazardous Substances Section 7.8
HSR Act Section 5.6
Improvements Section 1.3
Intangible Property Section 1.5
Land Section 1.1
Laws Section 6.2
Leases Section 7.2
Non-Foreign Certificate Section 5.5
Official Records Section 2.3
Permitted Exceptions Section 4.7
Personal Property Section 1.4
Property Section 1.6
Purchase Price Section 2.1
Real Property Section 1.6
Review Period Section 4.5
Seller Introductory Paragraph
Space Tenants Section 6.3
Survey Section 4.2
Title Company Section 3.1
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Title Policy Section 3.1
Title Report Section 4.2
Update Certificate Section 5.3
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PURCHASE AND SALE AGREEMENT
AND ESCROW INSTRUCTIONS
THIS PURCHASE AND SALE AGREEMENT AND ESCROW INSTRUCTIONS ("Agreement")
is made and entered into as of December 18, 1996, by and among XXXXXX X.
XXXXXXXXXX AND XXXXX X. XXXXXXXXXX, dba XXXX ESTATE ("Seller"), PACIFIC GATEWAY
PROPERTIES, INC., a New York corporation ("Buyer"), and CHICAGO TITLE COMPANY
("Escrow Holder") 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, Seller and Buyer, and where appropriate Escrow
Holder, agree as follows:
ARTICLE I
PROPERTY
Seller hereby agrees to sell and convey to Buyer, and Buyer hereby
agrees to purchase from Seller, subject to the terms and conditions set forth
herein, the following:
1.1. LAND. That certain real property (the "Land") described in
SCHEDULE A hereto, all of which shall be conveyed to Buyer pursuant to grant
deed in the form of SCHEDULE 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 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").
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1.3. IMPROVEMENTS. All improvements and fixtures located on the Land,
including, without limitation, all buildings and structures currently located on
the Land or located thereon on the Closing Date, 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 remain a part of the Property (all of which are collectively referred to
as the "Improvements");
1.4. PERSONAL PROPERTY. All tangible personal property currently
owned by Seller or owned by Seller on the Closing Date which is located or
situated in and used in connection with, the Land and/or the Improvements
("Personal Property"), and all of which Personal Property shall be transferred
and assigned to Buyer pursuant to an instrument in the form of SCHEDULE C hereto
(the "Xxxx of Sale");
1.5. INTANGIBLE PROPERTY. All of the interest of Seller in (i) any
intangible personal property (excluding cash, accounts receivable, subject to
the terms of Section 6.6.(c) below, and books and records of Seller) which
relates to and is reasonably required for the operation and functioning of the
Land, Improvements or Personal Property generally, and (ii) any and all
warranties guarantees, permits, contracts and other rights owned by Seller
relating to the ownership, operation or functioning of all or any part of the
Property, as defined below (including without limitation all third party
guarantees and warranties, express or implied, in connection with the
construction of the Improvements) (all of which are collectively referred to as
the "Intangible Property"), and all of which shall be assigned to Buyer pursuant
to the assignment in the form of SCHEDULE D hereto (the "Assignment of
Intangible Property and Warranties "), provided, however, that Seller shall
provide Buyer with copies of all books and records related to its operation of
the Property in the calendar year of 1996 and shall provide reasonable access to
Buyer to all books and records after the Close of Escrow.
1.6. LEASES. All interest of Seller, as landlord, in and to all
leases affecting any portion of the Land, Improvements or Personal Property as
of the Closing Date (the "Leases") which shall be assigned to Buyer pursuant to
an instrument in the form of SCHEDULE E hereto (the "Assignment of Leases").
All of the items described in Sections 1.1, 1.2, 1.3, 1.4, 1.5, and
1.6 above are hereinafter sometimes collectively referred to as the "Property."
The items described in Sections 1.1, 1.2, and 1.3 above are hereinafter
sometimes referred to collectively as the "Real Property."
ARTICLE II
PURCHASE PRICE
2.1. PURCHASE PRICE. The purchase price for the Property shall be
equal to Three Million Two Hundred Fifty Thousand Dollars ($3,250,000) (the
"Purchase Price"), which Purchase Price is subject to adjustment as provided in
Section 6.6 and 9.2. The Purchase Price shall be allocated to Real Property.
2.2. DEPOSITS. Seller acknowledges that Buyer has deposited the sum
of ONE HUNDRED THOUSAND DOLLARS ($100,000) (the "Initial Deposit") with the
Title
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Company pursuant to a non-binding letter of intent dated November 21, 1996
between Buyer and Seller. Upon the execution of this Agreement, Buyer shall
deposit the further sum of ONE HUNDRED FIFTY THOUSAND DOLLARS ($150,000) (the
"Additional Deposit") with the Title Company. The Initial Deposit and the
Additional Deposit are referred to collectively herein as the "Deposits". The
Title Company shall invest the Deposits in one or more interest bearing accounts
designated by Buyer and all interest earned thereon shall accrue to and become a
part of the Deposits and be paid to the party entitled to the Deposits as
provided in Section 6.10 below.
2.3. PAYMENT OF PURCHASE PRICE. Buyer shall pay the Purchase Price
into Escrow (defined below) at the Closing by wire transfer of immediately
available funds in accordance with wiring instructions to be provided by Escrow
Holder; provided, however, that Buyer shall deduct from the funds to be wired
pursuant to this Section 2.3 an amount equal to the Deposits held pursuant to
Section 2.2 above.
ARTICLE III
TITLE TO PROPERTY
3.1. TITLE. At the Closing, Seller shall convey to Buyer marketable
and insurable fee simple title to the Property pursuant to the Deed. Buyer
shall cause Chicago Title Insurance Company or such other title insurance
company as may be selected by Buyer (the "Title Company") to issue an ALTA
Owner's Policy of Title Insurance (Form B, Rev. 10/17/70) (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) the Permitted Exceptions (as defined in Section 4.7 below),
provided that indemnification of the Title Company to allow it to insure over
any otherwise unpermitted exception to title shall not be allowed except with
the prior written consent of Buyer (which shall be in Buyer's sole and absolute
discretion) after full disclosure to Buyer of the nature and substance of such
exception and indemnity. The Title Policy shall (i) provide full coverage
against mechanics' and materialmen's liens arising out of the construction,
repair or alteration of any of the Improvements or any tenant improvements, (ii)
be in form and substance satisfactory to Buyer in its sole and absolute
discretion, and (iii) contain such other endorsements as Buyer may require.
Furthermore, the Title Company shall obtain, if requested by Buyer, co-insurance
and/or reinsurance agreements as Buyer may request, which reinsurance agreements
shall be in ALTA Facultative Reinsurance Agreement Form (rev. 1987), and shall
include direct access agreements, in such amounts and in such form as shall
otherwise be satisfactory to Buyer.
3.2. XXXX OF SALE, ETC. At the Closing, Seller shall (i) transfer
title to the Personal Property to Buyer pursuant to the Xxxx of Sale, (ii)
transfer and assign to Buyer all of Seller's rights in and to the Intangible
Property pursuant to the Assignment(s) of Intangible Property and Warranties,
and (iii) transfer and assign to Buyer all of Seller's interest, as landlord, in
and to the Leases pursuant to the Assignment(s) of Leases; such title, interest
and rights to be free of any liens, encumbrances or interests of third parties
other than the Permitted Exceptions to the extent applicable to the Personal
Property, Intangible Property or Leases, respectively.
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ARTICLE IV
BUYER'S INVESTIGATIONS
4.1. DELIVERY OF DOCUMENTS BY SELLER. To the extent that Seller has
not done so prior to the execution of the Agreement, within three (3) business
days after the execution hereof, Seller shall deliver to Buyer true, correct and
complete copies of all maps, reports, documents, surveys, studies, agreements,
correspondence, or other materials pertaining to or concerning the Property in
Seller's possession or under its control, including but not limited to all:
environmental reports or assessments; hazardous materials, soils and/or ground
water studies and reports; geological and geo-technical studies; seismic
reports, tests; engineering studies; reports concerning the roof, membranes,
foundation, other structural components, or the HVAC, plumbing electrical or
other building systems; surveys; Leases and all information regarding the
financial condition of all tenants thereunder; contracts; plans; specifications,
drawings; documents pertaining to the operation, use, management, construction,
repair or maintenance of the Real Property or to taxes or assessments affecting
the Real Property and the Personal Property; government permits and approvals;
applications filed with governmental agencies or utility companies; and
correspondence with or reports or materials from governmental agencies or
utility companies.
4.2. REVIEW OF TITLE. In connection with Buyer's review of title,
survey and related matters, Seller shall deliver to Buyer to the extent that
such items are in Seller's possession or under Seller's control (or, shall make
available to Buyer at Seller's office at a reasonable time) and Buyer shall be
entitled to review the following:
(a) a current extended coverage preliminary title report for the
Property issued by the Title Company (the "Title Report"), accompanied
by legible record copies of all of the underlying documents referred
to in Schedule B of the report;
(b) copies of all existing or proposed easements, covenants,
restrictions, agreements or other documents which affect the ownership
of or title to the Property and which are not disclosed by the Title
Report for the Property, if any (to be made available), including all
easements and other agreements related to the use of the 930
Xxxxxxxxxx Street Building;
(c) any existing ALTA land survey of the Property (the "Survey") ;
(d) Copies of subdivision maps and condominium plans, and the
conditions and requirements thereto (the conditions and requirements
to be made available);
(e) Copies of all permits and licenses relating to the Property
(to be made available);
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(f) Copies of the real property and personal property tax bills
for the Property for the previous three (3) years; and
(g) Such other documents and matters relating to the Property as
Buyer may reasonably request during the Review Period (to be made
available);
4.3. SERVICE AND OTHER CONTRACTS. Seller shall promptly deliver (to
the extent such items are in Seller's possession or under Seller's control), and
Buyer shall review and approve in its sole and absolute discretion, a list of
and copies of all utility contracts, water and sewer service contracts, service
contracts, warranties, permits, soils reports, contracts for employees involved
in the operation of the Property (together with a summary of the benefits and
compensation payable to such employees) and other contracts or documents of any
nature relating to the Property or any portion thereof (the "Contracts"; those
Contracts which Buyer approves prior to the end of the Review Period (and prior
to the Closing Date in the case of contracts not entered into or delivered or
made available to the Buyer until after the expiration of the Review Period)
shall be referred to as the "Approved Contracts"). A list of all Contracts is
attached hereto as SCHEDULE F. A list of all Approved Contracts is attached
hereto as SCHEDULE G.
4.4. GOVERNMENTAL PERMITS, APPROVALS AND REGULATIONS. Seller shall
promptly deliver to the extent such items are in Seller's possession or under
Seller's control, and Buyer shall review and approve, a list of and copies of
all governmental permits and approvals with respect to the Property relating to
the construction, operation, use or occupancy of the Property or any portion
thereof, including without limitation, all certificates of occupancy,
certificates of compliance, and such other certificates as may be required or
customary in the jurisdiction where the Property is located, evidencing
compliance with all building permits, approval of use and occupancy of the
portions of the Improvements to be occupied or for which a certificate of
occupancy or certificate of compliance is required as of the Closing Date in
order to permit the Improvements to be legally occupied, and approval of
installations therein. A list of all government permits and approvals is
attached hereto as SCHEDULE H.
4.5. REVIEW PERIOD. Buyer shall have until December 24, 1996 (the
"Review Period") to complete its review of all materials provided by Seller to
Buyer pursuant to this Article IV and to undertake such studies, tests,
examinations, inspections, inquiries, and investigations of and concerning the
condition of the Real Property (including, without limitation, any and all of
the components and systems thereof) as Buyer may, in its sole and absolute
discretion, deem to be reasonable, prudent or desirable under the circumstances,
including without limitation, studies, tests, examinations, inspections,
inquiries and investigations of: the foundation, roof structure and membranes,
and all other components of the Improvements; HVAC and other building systems;
seismic safety; asphalt; landscaping, location and availability of utilities;
geological and seismic conditions and safety; hazardous materials, soils and/or
ground water conditions covering the disposal, escape, discharge, use or
treatment of Hazardous Substances (as defined below); building, zoning,
Americans with Disabilities Act and other code compliance; all Leases, Contracts
and other documents affecting the Property and the financial condition of all
tenants under the Leases.
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4.6. RIGHT OF ENTRY. Seller grants to Buyer the right to enter upon
the Real Property, upon not less than twenty-four hours written notice to
Seller, for such purposes as may be necessary to the exercise or performance of
the rights of Buyer to inspect and investigate the Property pursuant to this
Agreement. Buyer shall exercise such right in accordance with the leases and
contracts on the Property and in a manner which will minimize interference with
the use and enjoyment of the Property by the existing tenants. Buyer agrees to
pay in full for all materials joined or affixed to the Property in connection
with any environmental, engineering, soil, feasibility or other studies or
activities that are procured or undertaken by Buyer prior to Closing (herein,
"Buyer's Work") and to pay in full all persons who perform labor on the
Property with respect to Buyer's Work and not to permit or suffer any mechanic's
or materialman's lien of any kind or nature to be enforced against the Property
for any of Buyer's Work. Buyer shall be responsible for the costs and expenses
of all reports commissioned by Buyer with respect to the Property. In the event
that this Agreement is terminated, Buyer shall, as soon as possible , and at
Buyer's sole cost and expense, restore the Property where Buyer or Buyer's
representatives, agents, contractors, servants, or licensees have performed any
Buyer's Work to substantially the same condition it was in but for such Buyer's
Work, failing in which Seller may perform the work of restoration and Buyer
shall reimburse Seller for the reasonable cost and expense thereof within ten
(10) business days after rendition of bills paid by Seller. Buyer shall
indemnify and defend Seller, and hold Seller harmless, from any claims, costs,
demands, causes of action, and suits directly arising from Buyer's studies,
tests, and inspections of the Property; provided, however, that Buyer shall not
be required to indemnify Seller for any diminution in the value of the Property,
or increased costs to Seller, to the extent that they are triggered by any
discovery or disclosure by Buyer or its consultants of any defects or hazardous
conditions on or about the Property.
4.7 OBJECTIONS TO SURVEY, TITLE REPORT, PROPERTY, LEASES, OR OTHER
MATTERS. On or prior to the end of the Review Period, Buyer shall notify Seller
of any objections Buyer has to the sufficiency of any Survey or Title Report, to
the status of Seller's title, to any matter disclosed in any Survey or Title
Report, to the physical or financial state of the Property, to any Phase I
and/or Phase 2 environmental assessment, or other environmental report, to the
Leases, to the Contracts, to the Property, to any item delivered or not
delivered by Seller to Buyer, or to any other matter covered by this Article IV;
provided, however, that if Buyer has not received a particular Title Report,
survey or environmental report by the end of the Review Period, it shall have
until ten (10) days after its receipt of the missing item(s) to notify Seller of
its objections thereto. If Buyer objects as provided herein, Buyer shall have
the option, which must be exercised on or prior to the end of the Review Period
(a) to waive Buyer's objections and purchase the Property as otherwise
contemplated by this Agreement, or (b) terminate this Agreement as provided in
Section 11.10 hereof. If Buyer shall fail to give Seller notice of its
objections, it shall be deemed to have had no objections. All exceptions to
title to, and or encumbrances against, the Property shown on the Title Report or
Survey but not objected to by Buyer shall be deemed "Permitted Exceptions."
4.8 COOPERATION. Seller shall cooperate with Buyer in a good faith
attempt to make the deliveries and provide information within the time limits
provided for above including, without limitation, information requested by
Buyer's lender. Without limiting the generality of the foregoing, Seller shall
provide to Buyer with such consent as
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Buyer may reasonably require so that Buyer may independently confirm information
provided to it by Seller with third parties.
ARTICLE V
CONDITIONS PRECEDENT TO CLOSING
A. CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS. Buyer's obligation
to proceed with the purchase of the Property is subject to fulfillment or waiver
by Buyer of the following conditions precedent:
5.1 TITLE MATTERS. Buyer shall have reviewed and approved the
condition of title to the Real Property, there shall be no exceptions to title
to the Property other than the Permitted Exceptions, and the Title Company shall
be prepared to issue the Title Policy.
5.2. DELIVERY OF DOCUMENTS. Seller shall have duly and timely
performed all of its obligations and executed and/or delivered the Deed and all
of the other documents and things to be executed and/or delivered by Seller
pursuant to this Agreement including, without limitation, all of the documents
and things specified in Section 6.3 below.
5.3. REPRESENTATIONS AND WARRANTIES. All of Seller's representations
and warranties contained herein or made in writing by Seller shall have been
true and correct when made and shall, except as otherwise provided in the Update
Certificate (provided that Buyer shall be entitled to terminate this Agreement
and its obligations hereunder if the Update Certificate reveals any inaccuracies
in Seller's representations and warranties contained herein), be true and
correct as of the Closing Date, as though made at, and as of, the Closing Date,
and all times in between such dates, and Seller shall have strictly complied
with all of Seller's covenants and agreements contained in or made pursuant to
this Agreement.
5.4. APPROVAL OF UPDATE CERTIFICATE. Seller shall have executed and
delivered to Buyer at the Closing the Update Certificate, which Update
Certificate shall indicate no changes or exceptions to Seller's representations
and warranties made as of the date hereof (except as otherwise indicated on the
Update Certificate) and be in form of SCHEDULE I attached hereto and in
substance acceptable to Buyer.
5.5. NON-FOREIGN STATUS OF SELLER. Seller shall have executed and
delivered to Buyer, on the Closing Date, Seller's certificate in the form
attached hereto as SCHEDULE I (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 (the "Code"),
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.
5.6. USE CERTIFICATE. Buyer shall have obtained a certificate from
the Office of the Secretary of State of the State of California or from a
Uniform Commercial Code report or service as of a recent date before the Closing
Date indicating that there are no filings against any Personal Property of
Seller which shall be transferred to Buyer pursuant to this Agreement. Seller
may satisfy this condition by causing a termination of any such filings to be
filed in the Office of the Secretary of State prior to Closing.
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5.7. BOARD APPROVAL. This Agreement and the transactions contemplated
hereby shall have been approved by the Buyer's board of directors, which may be
granted or withheld in the Board's sole and absolute discretion on or before
December 24, 1996.
5.8. IMPAIRMENT OF PROPERTY. No material adverse change shall have
occurred in the condition or ownership of the Property or any part thereof and,
as of the Closing, no part of the Property, or any interest of Seller therein,
shall be encumbered by any lien, pledge, security interest, financing or due and
unpaid charge, tax or other imposition (other than Permitted Exceptions and
items which will be removed on or prior to the Closing Date), or damaged and not
repaired to Buyer's satisfaction or taken in condemnation or other like
proceeding and no such proceeding is pending or threatened, except as otherwise
provided in Section 9.2 hereof.
5.9. LITIGATION. There shall be no actions, suits, or proceedings,
pending or threatened against Seller, at law or in equity, in or before or by
any federal, state, municipal or other governmental department, commission,
board, bureau, agency, or instrumentality, which, in Buyer's reasonable opinion,
could have a material adverse impact on the Property.
5.10. TERMINATION OF EMPLOYEES. Seller shall have terminated all
employees employed by Seller in connection with the operation of the Property in
compliance with applicable law and shall have paid in full all compensation and
benefits owed to such employees.
5.11. CONTRACT TERMINATION. Seller shall have terminated, on or before
the Closing Date, those Contracts, if any, which would be binding on Buyer
subsequent to the Closing and which Buyer has designated on or before the Review
Period to be terminated. [Seller shall not terminate the National Guardian
Contract.] Seller shall deliver to Buyer within fifteen days after the
execution hereof a list of all Contracts which would be binding on Buyer
subsequent to the Closing, together with a true, complete and correct copy of
such Contracts if not previously delivered to Buyer.
The foregoing conditions contained in this Article V.A are intended solely
for the benefit of, and may be waived by, Buyer.
B. SELLER'S CONDITIONS TO CLOSING.
The following conditions are conditions precedent to Seller's
obligation to sell the Property:
5.12. DELIVERY OF DOCUMENTS AND PURCHASE PRICE. Buyer's due and timely
execution and delivery of all documents and things to be executed and delivered
by Buyer (including, without limitation, the Purchase Price) pursuant to this
Agreement including, without limitation, all of the documents and things
specified in Section 6.4, below.
5.13. REPRESENTATIONS AND WARRANTIES.
All of Buyer's representations and warranties contained herein or made in
writing by Buyer shall have been true and correct when made and shall, except as
otherwise provided in the Update Certificate (provided that Seller shall be
entitled to terminate this Agreement and
18
its obligations hereunder if the Update Certificate reveals any inaccuracies in
Buyer's representations and warranties contained herein), be true and correct as
of the Closing Date, as though made at, and as of, the Closing Date, and all
times in between such dates, and Buyer shall have strictly complied with all of
Seller's covenants and agreements contained in or made pursuant to this
Agreement.
The foregoing conditions contained in this Article V.B are intended solely
for the benefit of Seller.
ARTICLE VI
ESCROW; CLOSING, RECORDING AND TERMINATION
6.1. ESCROW; DEPOSIT WITH ESCROW HOLDER AND ESCROW INSTRUCTIONS. The
purchase and sale contemplated by this Agreement shall be consummated through an
escrow (the "Escrow") established with Chicago Title Insurance Company and its
office located at 000 Xxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxxxx, Xxxxxxxxxx
00000, Attention: Xxxxxx Xxxxxxxxx. Promptly after execution of this
Agreement, the parties hereto shall deliver one (1) fully executed copy 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. 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
unless agreed to in writing by both Buyer and Seller.
6.2. CLOSING.
(a) Escrow shall close (the "Closing") on January 7, 1997 (the
"Closing Date") or such other date as Buyer and Seller may mutually agree in
writing. Except as otherwise expressly provided herein, such date may not be
extended without the written approval of both Seller and Buyer. The "Closing"
shall be deemed to have occurred on the date that all of the events specified in
Section 6.8 of this Agreement shall have occurred.
(b) In the event the Closing does not occur on or before January
7, 1997, the Escrow Holder shall, unless it is notified by Buyer to the contrary
within five (5) days after such date, return to the depositor thereof all items
which may have been deposited with Escrow Holder hereunder, provided that the
Escrow Holder shall release Deposits in accordance with Section 6.10 hereof.
Any such return shall not, however, relieve either party hereto of any liability
it may have for its wrongful failure to close, including, without limitation,
Buyer's obligations under Sections 4.5 and 4.6. Buyer shall, within seven (7)
days after the termination of this Agreement in accordance with the terms
hereof, return to Seller all documents and materials delivered to Buyer
hereunder by or on behalf of Seller.
6.3. DELIVERY BY SELLER. At the Closing, Seller shall deposit with
the Escrow Holder, for the benefit of Buyer, or deliver directly to Buyer the
following:
(a) The Deed, duly executed and acknowledged by Seller, in
recordable form, and ready for recordation in the Official Records;
19
(b) The Xxxx of Sale duly executed by Seller;
(c) Original counterparts of the Leases (and amendments thereto,
if any, and all records and correspondence relating thereto); estoppel
certificates from the Space Tenants (as hereinafter defined)
thereunder dated not earlier than sixty (60) days before the Closing
Date, certifying to and for the benefit of Buyer and its successors
and assigns that the Leases are in full force and effect, the
counterparts of and amendments to the Leases provided by the Seller to
the Buyer are true, correct and complete versions of those Leases, and
certifying that Seller, as landlord, is not in default thereunder; and
a certified rent roll and listing of security deposits for the
Property, if any;
(d) The Assignment(s) of Leases covering all of the Leases on the
Property, duly executed by Seller;
(e) To the extent such items are in the possession or under the
control of Seller after Seller has used its best efforts to obtain
such items, originals or, if unavailable, certified copies of any
warranties and guaranties received by Seller and to be assigned to
Buyer, from any contractors, subcontractors, suppliers or materialmen
in connection with any construction, repairs or alterations of the
Improvements or any tenant improvements;
(f) The Assignment(s) of Intangible Property and Warranties, duly
executed by Seller, assigning all of Seller's interest in the
Intangible Property (except that the only Contracts that shall be
assigned are the Approved Contracts);
(g) To the extent such items are in the possession or under the
control of Seller after Seller has used its best efforts to obtain
such items, originals or, if unavailable, certified copies of all
certificates of occupancy for the Improvements;
(h) To the extent such items are in the possession or under the
control of Seller after Seller has used its best efforts to obtain
such items, , as-built plans and specifications for the Improvements,
showing the Improvements in their state of Completion, certified by
Seller to be true, complete and correct copies thereof;
(i) To the extent such items are in the possession or under the
control of Seller after Seller has
20
used its best efforts to obtain such items, originals or, if
unavailable, certified copies of all licenses or permits held by
Seller, and/or to be assigned to Buyer pursuant to this Agreement, in
connection with the use, operation or enjoyment of the Property;
(j) Such resolutions, authorizations, or other documents or
existing agreements relating to Seller as shall be reasonably required
by the Title Company or by Buyer in connection with this transaction;
(k) A closing statement prepared by Escrow Holder in form and
content consistent with this Agreement and otherwise reasonably
satisfactory to Buyer and Seller;
(l) The Non-Foreign Certificate, duly executed by Seller;
(m) A certificate in the form of EXHIBIT J-1 attached hereto 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 VII below and
noting with specificity any changes or exceptions thereto based upon
events or circumstances intervening after the execution hereof (the
"Update Certificate");
(n) Notices to each of the tenants under the Leases (the "Space
Tenants") in the form of SCHEDULE K hereto; and
(o) Seller's closing certificate, certifying as to the
satisfaction of all of the conditions precedent to Seller's
obligations hereunder (except delivery of the Purchase Price),
addressed to Buyer.
(p) A estoppel certificate in the form of EXHIBIT L attached
hereto from parties to Approved Contracts certifying to and for the
benefit of Buyer and its successors and assigns that all amounts owed
by Seller thereunder have been paid in full and that there exist no
disputes, offsets, or counterclaims with respect thereto;
(q) Notices to each of the parties to the Approved Contracts in
the form of SCHEDULE M hereto;
(r) All keys, properly tagged and identified for the Property; and
21
(s) A quitclaim deed duly executed and acknowledged by Xxxx X.
Xxxxxxxxxx and Xxxx X. Xxxxxxxxxx releasing and quitclaiming any and
all rights, title, and interest in the Property.
Buyer may waive compliance on Seller's part under any of the foregoing
items by an instrument in writing.
6.4. DELIVERY BY BUYER. At the Closing, Buyer shall execute and deliver
to Escrow Holder, for the benefit of Seller, or directly to Seller the
following:
(a) The Purchase Price;
(b) Assignment of Leases executed by Buyer;
(c) Assignment of Intangible Property and Warranties executed by
Buyer;
(d) Notices to the Space Tenants in the form of SCHEDULE K hereto;
(e) Buyer's closing certificate, certifying as to the satisfaction
of all of the conditions precedent to Buyer's obligations hereunder,
addressed to Seller; and
(f) Notices to each of the parties of the Approved Contracts in
the form of SCHEDULE N hereto; and
(g) A Certificate in the form of Exhibit J-2 attached hereto duly
executed by Buyer and dated as of the Closing Date confirming the
truth, accuracy and completeness of each of the Buyer's
representations and warranties set forth in Article VIII below and
noting with specificity any changes or exceptions thereto based upon
events or circumstances intervening after the execution hereof
("Buyer's Update Certificate").
Seller may waive compliance on Buyer's part under any of the foregoing by
an instrument in writing.
After Escrow Holder's receipt of all of the items specified in Section 6.3
hereof, after the complete satisfaction of all of the conditions precedent to
Buyer's obligations hereunder, and after the expiration of the Review Period,
Buyer shall deliver the Purchase Price to Escrow Holder as provided in Section
2.3 above.
6.5. 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.
6.6. PRORATIONS. At Closing, the parties shall prorate as of the
Closing
22
Date, on the basis of a thirty-one-day (31-day) month or 365-day year, as
appropriate, the following with respect to the Property:
(a) TAXES. Real estate taxes, recurring assessments, personal
property taxes, and rent tax, 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 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
occurs). If any supplemental real estate taxes are levied for any
period preceding the Closing (excluding any reassessment of the
Property resulting from the sale hereunder), the parties will,
immediately after the Closing or the issuance of the supplemental real
estate tax xxxx (whichever last occurs), prorate between themselves,
in cash, without interest and to the date of the Closing Date, the
supplemental real estate taxes shown by such xxxx.
(b) UTILITIES. All utilities including gas, water, sewer,
electricity, telephone and other utilities supplied to the Property
shall be read as of the Closing Date. Seller shall be responsible for
payment of all amounts for utility charges which have accrued prior to
the Closing Date and Buyer shall be responsible for payment of all
amounts for utility charges which have accrued after the Closing Date.
Seller shall pay, prior to the Closing Date, all such amounts for
which a xxxx has been received prior to the Closing Date, and shall
pay all other amounts for which Seller is responsible promptly, upon
receipt of any xxxx.
(c) RENTS. Rents collected by Seller for the month in which the
Closing Date occurs shall be prorated so that Seller shall receive all
amounts due Seller applicable to time periods prior to the Closing
Date (excluding delinquencies), and Buyer shall receive all amounts
applicable to time periods after the Closing Date. With respect to
any Lease with delinquent rents as of the Closing Date, Buyer shall
apply rents under such Lease received after Closing first to current
rents due to Buyer, second to rents due to Seller as of the Closing
Date but uncollected prior to settlement, and third to payment of
delinquent rent due to Seller. Seller shall retain the right to
commence legal action against a tenant for any delinquent rent
apportioned to the Seller, at Seller's sole cost and expense, except
Seller may not bring unlawful detainer proceedings or similar actions
to dispossess a tenant without the consent of Buyer.
(d) SERVICE CONTRACTS. Amounts payable under Approved Contracts
shall be prorated on an accrual basis. Seller shall pay, prior to the
Closing Date, all such amounts for which a xxxx has been received or
for which payment is otherwise due prior to the Closing Date, and
Buyer shall pay all amounts for which a xxxx is received for
23
amounts accrued on or after the Closing Date. Buyer shall be
credited, and Seller shall be debited, with an amount equal to all
amounts accrued under the Approved Contracts from the date such bills
were issued or such payments were due until the Closing Date. Seller
shall deliver to Escrow, for the benefit of Buyer, evidence of the
cancellation or termination of all Contracts other than Approved
Contracts, and Seller shall be responsible for all such cancellation
costs.
(e) SECURITY DEPOSITS. Buyer shall be credited and Seller shall
be debited with an amount equal to all Security Deposits, plus accrued
interest thereon, if any, paid to or on behalf of Seller that remain
refundable pursuant to the terms of the Leases as of the Closing Date.
In the event that there is any dispute between Seller and any Tenant
concerning the amount of any deposit which is not resolved to Buyer's
satisfaction, Buyer may terminate this Agreement and neither party
shall have any further obligation to the other (except as set forth in
Section 6.9 hereof).
(f) OTHER ITEMS. All other proratable items including, without
limitation, licenses and permits being assumed by Buyer, property
owners association dues and expenses and other income from, and
expenses associated with, the Property shall be prorated between Buyer
and Seller as of the Closing. Notwithstanding anything to the
contrary in the foregoing or elsewhere herein, Seller shall pay for
all brokerage fees and commissions (including without limitation those
to Leasing Agent) incurred with respect to Leases executed prior to
the Closing Date.
(g) POST-CLOSING PRORATIONS. Any required post-Closing prorations
(e.g. supplemental taxes) shall be accomplished as soon as reasonably
practicable after the Closing Date.
(h) METHOD OF PRORATION. Buyer and Seller agree to prepare a
schedule of tentative apportionments prior to the Closing Date. Such
apportionments, if and to the extent known and agreed upon as of the
Closing Date, shall be paid by Buyer to Seller (if the prorations
result in a net credit to the Seller) or by Seller to Buyer (if the
prorations result in a net credit to the Buyer), by increasing or
reducing the cash to be paid by Buyer at the Closing. Any such
apportionments that cannot be determined as of the Closing Date shall
be paid by Buyer to Seller, or by Seller to Buyer, as the case may be,
in cash as soon as practicable following the Closing Date.
6.7. COSTS AND EXPENSES. Seller shall pay all legal fees and costs
incurred by Seller, all city and county transfer taxes applicable with respect
to the sale of the Real Property, and other fees and charges which are typically
borne by sellers in San Francisco County, California. Buyer shall pay the full
cost of the premium for the Title Policy, the cost
24
of any recordation fees, the Escrow Holder's fees and charges, all of its
out-of-pocket expenses, all legal fees and costs incurred by Buyer in connection
herewith, and other fees and charges which are typically borne by buyers in San
Francisco County, California.
6.8. CLOSING AND RECORDATION. Provided that Escrow Holder has received
all of the items required to be delivered pursuant to this Article VI (or a
waiver from the party for whose benefit such item is being delivered) and that
it has not received prior written notice from Buyer that Buyer has elected to
terminate its rights and obligations hereunder pursuant to Article IV, Article V
and/or Section 6.9, 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 documents delivered to the Escrow Holder in accordance with recording
instructions (as approved by Seller which approval shall not be unreasonably
withheld, delayed, or conditioned) set forth in a letter to be delivered to
Escrow Holder and Title Company by Buyer (or if no such letter is received prior
to the Closing, in accordance with customary practice), (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 Section 6.6 hereof, upon receiving confirmation
of recording of the Deed.
25
6.9. 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 V.A,
Section 6.3 or Section 4.7 in this Agreement, is not either fully
performed, 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 11.10 hereof, to terminate this Agreement, in
which case neither party shall have any further obligation to the
other (except as set forth in Sections 6.2(b). 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 Article V.B.,
Section 6.4 or elsewhere in this Agreement, is not either fully
performed, 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 11.10 hereof, to terminate this Agreement and
neither party shall have any further obligation to the other (except
as set forth in Sections 6.2(b) and 6.11 hereof).
6.10 RELEASE OF DEPOSITS. The Deposits (including all interest
earned thereon): (a) shall be released to Seller as part of the
Purchase Price in accordance with the provisions of Section 2.3 above,
or (b) shall be released to Seller as liquidated damages if this
transaction is not consummated due to default on part of the Buyer as
provided in Section 6.11 below, or (c) shall be returned to Buyer if
this transaction is not consummated due to any reason other than
default on part of the Buyer.
6.11. LIMITATION ON SELLER'S REMEDIES. IF THIS TRANSACTION
DOES NOT CLOSE AS A CONSEQUENCE OF A DEFAULT BY BUYER IN THE
PERFORMANCE OF ITS OBLIGATIONS HEREUNDER, SELLER SHALL RETAIN THE
DEPOSITS (TOGETHER WITH ALL INTEREST EARNED THEREON) AS LIQUIDATED
DAMAGES. SELLER'S ACTUAL DAMAGES WOULD BE DIFFICULT OR IMPOSSIBLE TO
DETERMINE IF BUYER DEFAULTS, AND THE AMOUNT OF SUCH OF THE DEPOSITS
(TOGETHER WITH ALL INTEREST EARNED THEREON) ARE THE BEST ESTIMATE OF
THE AMOUNT OF DAMAGES SELLER WOULD SUFFER. THE PROVISIONS OF THIS
PARAGRAPH 6.11 SHALL BE SELLER'S SOLE REMEDY IN THE EVENT OF A DEFAULT
BY BUYER, IN LIEU OF ALL OTHER REMEDIES SELLER MIGHT OTHERWISE HAVE
HEREUNDER AT LAW OR IN EQUITY. THE PARTIES WITNESS THEIR AGREEMENT TO
THIS LIQUIDATED DAMAGES PROVISION AND THIS LIMITATION OF REMEDIES
PROVISION BY THEIR EXECUTION BELOW.
26
RVM PP
----------------- ------------------
Initials of Buyer Initials of Seller
ARTICLE VII
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 makes the following
representations and warranties to Buyer, which representations and warranties
are true, correct and complete 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 and in the Update Certificate) and agrees with
Buyer as follows:
7.1. CONDITION OF PROPERTY. Except as disclosed in SCHEDULE 7.1
hereto, to Seller's actual knowledge, there are no physical or mechanical
defects in any of the Improvements on the Property, and all such Improvements
are in good operating condition and repair and in compliance with all applicable
governmental laws, ordinances, regulations and requirements. Furthermore,
without limiting the generality of the foregoing, to Seller's actual knowledge,
the soil on the land is fully capable of supporting the Improvements, without
sinking, erosion or other incident or adverse consequence; and the roof of the
structures comprising the Improvements is in good condition and free of leaks,
and all gutters and leaders installed are in good condition and operating
properly.
7.2. USE AND OPERATION. Except as disclosed in SCHEDULE 7.2 HERETO,
To Seller's actual knowledge, the use and operation of the Property are fully
entitled for its current use, without restriction or conditions, and are in
compliance with applicable codes, ordinances, rules, laws, regulations and
requirements, including without limitation those applicable to subdivisions,
construction of improvements, zoning, land use (including without limitation the
California Environmental Quality Act ("CEQA")), public safety, Hazardous
Substances and the Americans with Disabilities Act to the extent required or
requested by the City and County of San Francisco (collectively, "Laws") of any
court, or any governmental agency or authority, (collectively, "Governmental or
Regulatory Authority"), and Seller has received no notice of non-compliance with
any Laws which have not been corrected.
7.3. LAND-USE REGULATION. To Seller's actual knowledge, there are no
zoning or other land-use regulation proceedings or any change or proposed change
in any applicable Laws, which could detrimentally affect the use or operation of
the Property, and Seller has not received notice of any special assessment
proceedings affecting the Property.
7.4. UTILITIES. To Seller's actual knowledge, all water, sewer, gas,
electric, telephone and drainage facilities and all other utilities required by
law or for the current full use and operation of the Property are installed to
the property lines of the Property, are all connected and operating pursuant to
valid permits, are adequate to service the Property and to permit full
compliance with all Laws and the current full usage of the Property, and are
connected to the Property by means of one or more public or private easements
extending from the Property to one or more public streets, public rights-of-way
or utility facilities.
27
7.5. USE PERMITS AND OTHER APPROVALS. Except as disclosed in SCHEDULE
7.5 hereto, to of Seller's actual knowledge, Seller has obtained all licenses,
permits, approvals, certificates of occupancy, other certificates, easements and
rights of way (and all such items are currently in full force and effect)
required from any Governmental or Regulatory Authority having jurisdiction over
the Property, including without limitation any approvals necessary to fully
comply with CEQA, or from private parties for the full intended use and
operation of the Property and to ensure free and unimpeded pedestrian ingress to
and egress from the Property as required to permit the full intended usage of
the Property..
7.6. AUTHORITY OF SELLER/INTEREST OF SELLER IN THE PROPERTY. (i)
Seller owns the Property as individuals, and the Property is Seller's sole and
separate property, and no person other than Seller has any community property
interest or other property interest in the Property; (ii) this Agreement, the
Deed, and all other documents executed and delivered by Seller pursuant to this
Agreement, constitute legal, valid and binding obligations of Seller,
enforceable against Seller in accordance with their respective terms, (iii)
Seller has full power and authority to carry on his business as presently
conducted, and (iv) neither the execution, delivery and performance of this
Agreement and all other documents executed and delivered by Seller pursuant to
this Agreement, nor the consummation of the transactions contemplated hereby,
violate or conflict with, result in the breach or termination of or constitute
default under any provisions of any agreement, organizational or charter
document, or judicial order to which Seller is a party or to which Seller or the
Property is subject.
7.7. USE OF PROPERTY. Seller knows of no facts nor has Seller failed
to disclose to Buyer any fact which would prevent Buyer from using and operating
the Property hereafter in the manner in which the Property is intended to be
operated. To Seller's actual knowledge, there do not exist any violation of any
declaration of covenants, conditions and restrictions (the "CC&R's") with
respect to the Property, nor is there any existing state of facts or
circumstances or condition or event which could, with the giving of notice or
passage of time, or both, constitute such a violation. To Seller's actual
knowledge, Seller is not in default in respect of any of its obligations
pertaining to the Property. The Property is not located in the 100-year flood
plain, and no fees, connection charges, assessments or special assessments are
due or pending for the installation or operation of any drainage, water run off
or dry well facilities related thereto.
7.8. HAZARDOUS SUBSTANCES AND ASBESTOS/INDEMNIFICATION.
(a) To Seller's actual knowledge, all operations or activities at, on, in,
under or about, or use or occupancy of, the Property, or any portion thereof, by
any party, is, and at all times has been, in all respects in compliance with all
Laws governing or in any way relating to toxic or hazardous substances,
materials or wastes, including, but not limited to, substances, materials or
wastes regulated under any applicable local, state or federal law (including
without limitation petroleum and petroleum products) ("Hazardous Substances"),
and neither Seller nor, to Seller's actual knowledge, any prior or current owner
or prior or current tenant or occupant of the Property, or any portion thereof,
engaged in or permitted any dumping, discharge, disposal, spillage, use or
leakage of Hazardous Substances, at, on, in, under or about the Property, or any
portion thereof, except in accordance with applicable laws. To Seller's actual
knowledge, there is not present at, on, in, under or about the Property, or any
portion thereof, any Hazardous Substances, underground storage tanks, asbestos,
or any
28
structures, fixtures, equipment or other objects or materials containing
Hazardous Substances or asbestos, except in accordance with applicable laws.
(b) Seller shall indemnify, protect, defend with counsel reasonably
acceptable to Buyer, and hold Buyer fully harmless from any and all liabilities,
damages, claims, penalties, fines, settlements, causes of action, cost or
expense, including reasonable attorneys' fees, environmental consultant fees and
laboratory fees and costs and expenses of investigating and defending any claims
or proceedings, resulting from or attributable to (a) the breach of the warranty
contained in this Section 7.8; (b) the presence, disposal, release, or
threatened release of any Hazardous Substance that was on, from or affecting the
Property during the Seller's ownership of the Property prior to the Closing
Date, including the soil, water, vegetation, building, personal property,
persons, animals, or otherwise; (c) any personal injury (including wrongful
death), or property damage (real or personal) arising out of or relating to any
hazardous substance present on the Property during the Seller's ownership of the
Property prior to the Closing Date; (d) any lawsuits or administrative action
brought or threatened, settlement breached or governmental order relating to the
presence of any Hazardous Substance on the Real Property during the Seller's
ownership of the Property prior to the Closing Date; or (e) any violation by
Seller of laws applicable to Hazardous Substance, provided that nothing in this
Section 7.8(b) shall obligate Seller to clean up any Hazardous Substance before
the Closing.
7.9. REPORTS, CONTRACTS AND OTHER DOCUMENTS. All contracts, or leases
or documents delivered or made available to Buyer pursuant to this Agreement or
in connection with the execution hereof are true, correct and complete copies,
and in full force and effect. All such contracts, leases and other documents
relating to or affecting the Property have been delivered or made available to
the Buyer pursuant to this Agreement to the extent required by this Agreement.
7.10. LEASES.
(a) SCHEDULE O attached hereto is a true and complete list of
the Leases which affect the Property. (i) Except as otherwise specified in
Schedule J, the Leases are in full force and effect, and (ii) there is no
monetary default or, to the best of Seller's knowledge, other default by any
party under any of the Leases (and there exists no condition that with the
passage of time or the giving of notice or both would constitute such a
default).
(b) Except with respect to the Leases, no person, firm or entity
has any possessory interest in any portion of the Property or any other rights
with regard to the use of the Property or any rights to lease all or any part of
the Property, or any part thereof or otherwise obtain any interest therein.
There has been no assignment of any of the Leases existing with respect to the
Property, except for a collateral assignment as security for financing to be
satisfied at Closing.
(c) The rent roll and summary of security deposits for the
Property attached hereto as SCHEDULE P are true, correct and complete.
7.11. SERVICE CONTRACTS AND OTHER AGREEMENTS. Seller has not entered
into and there are no contracts or other agreements affecting the owner or
ownership of the Property, except as specifically set forth in attached SCHEDULE
F (which shall be supplemented
29
as each new Contract or other agreement is executed).
7.12. AGREEMENTS AFFECTING THE PROPERTY. To the Seller's actual
knowledge, there are no easements, encumbrances or other agreements (whether or
not of record) affecting title to, or creating a lien or charge upon the
Property except as shown in the Survey or Title Report or as otherwise
specifically set forth in attached SCHEDULE H.
7.13. MATTERS IN RESPECT OF APPURTENANCES; TITLE.
(a) To the best of Seller's knowledge, there is no default by
Seller under or in respect of any of the Appurtenances, and no Appurtenances
have been conveyed, transferred or assigned to any third party except as shown
in the Title Report.
(b) Seller is the sole owner of good, marketable and insurable
fee simple title to the Property, free and clear of all liens, security
interests, covenants, conditions, rights-of-way, easements and encumbrances of
any kind or character whatsoever, subject only to the Permitted Exceptions.
7.14. LITIGATION. There is no action, suit or proceeding pending or,
to Seller's actual knowledge, threatened against Seller, or any basis therefor,
that arises out of the ownership of the Property or that might detrimentally
affect the use and operation of the Property for its intended purpose, or the
value of the Property or adversely affect the ability of Seller to perform its
obligations under this Agreement. Without limiting the generality of the
foregoing, there is no action, suit or proceeding under the Bankruptcy Code
pending or, to the best of Seller's knowledge, threatened against Seller or any
entity in which Seller is a general partner or has a contributing interest.
7.15. OTHER CONTRACTS TO CONVEY PROPERTY. Seller has not committed nor
obligated itself in any manner whatsoever to sell the Property, or any portion
thereof, to any party other than Buyer. Seller has not hypothecated or assigned
any rents or income from the Property, or any portion thereof in any manner
except pursuant to an existing secured financing.
7.16. PROPERTY TAX ASSESSMENT. The Real Property is a separate tax lot
or lots and is assessed and taxed for real estate tax purposes separate and
apart from any other lands.
7.17. ASSESSMENT LIENS. Except for those matters specifically set
forth in the Title Report delivered or to be delivered to Buyer pursuant to
Section 4.2 above, to Seller's actual knowledge, there is no assessment of any
kind or nature which constitutes a lien on the Property, or any portion thereof,
and no matters other than Permitted Exceptions.
7.18. FULL DISCLOSURE. No representation and warranty made by Seller
in this Agreement contains any untrue statement of a material fact, or fails to
state a material fact necessary to make the statements contained herein, in
light of the circumstances which under which they were made, not misleading. To
Seller's actual knowledge, there is no fact or circumstance which materially
adversely affects, or can be expected to materially adversely affect, the
condition, financial or otherwise, of the Property or the Seller.
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7.19. NON-FOREIGN STATUS. Seller is not a "foreign person" within the
meaning of Section 1445 ET SEQ. of the Code.
7.20 CONDEMNATION. Seller is not aware of any contemplated
condemnation proceeding or of any intention or plan by the City or County of San
Francisco to widen roads or sidewalks around the Property or otherwise to alter,
change, or affect the ingress and egress to and from the Property.
For the purposes of this Article VII, the term "actual knowledge"
shall mean such information as has actually been communicated to or learned by
Seller.
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES OF BUYER
8.1. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer hereby represents
and warrants to Seller as follows: Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of New York;
except for the Board Approval, 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, and are
and as of the Closing Date will be legal, valid and binding obligations of
Buyer, 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.
Buyer represents that it has made independent investigations of the
Property to the extent deemed necessary by Buyer, including investigations of
matters related to title referred to in the preliminary title report, records
maintained by applicable city, state, federal and local governmental entities
exercising jurisdiction over the Property and other materials made available by
Seller to Buyer and that Buyer is not relying on any representations, warranties
or statements made by Seller other than those made in this Agreement, including
Seller's representation that it has delivered to Buyer all documents and
communicated to Buyer all information in its possession or under its control
regarding the Property.
ARTICLE IX
DELIVERY OF PROPERTY
9.1. POSSESSION. Possession of the Property shall be delivered to
Buyer on the Closing Date subject only to the rights of Space Tenants pursuant
to the Leases and Permitted Exceptions. 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.
9.2. LOSS, DESTRUCTION AND CONDEMNATION.
(a) DEFINITION OF MATERIAL DAMAGE. For the purposes of this
Section 9.2, damage to the Property is material if the actual cost of repairing
or replacing the damaged portions of the Improvements on the Property exceeds
$100,000 for an uninsured casualty or $200,000 for an insured casualty.
(b) EFFECT OF NON-MATERIAL DAMAGE TO IMPROVEMENTS. If prior to
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the Closing the Improvements on the Property are non-materially damaged by
casualty, whether insured or uninsured, (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 to the extent
insurance proceeds are available(a) cause the damaged portion of the
Improvements to be repaired or (b) 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, provided that Buyer will be responsible
for the first $100,000 of any uninsured casualty. Seller will notify Buyer
within one (1) day of Seller's receipt of knowledge of any casualty which occurs
in between the date of this Agreement and the Closing Date.
(c) EFFECT OF MATERIAL DAMAGE TO IMPROVEMENTS. If prior to the
Closing the Improvements are materially damaged by casualty, Seller shall notify
Buyer in writing of such casualty as soon as practicable. Within ten (10) days
after the occurrence of such casualty or receipt of applicable insurance
proceeds whichever is later, Seller will commence restoration of the damaged
Improvements, and shall complete such restorations promptly thereafter, and the
Closing Date shall, if necessary be extended until such damaged improvements are
complete; provided, however, that no such restoration shall be required unless
the same is fully covered by a policy of insurance maintained by Seller and
provided, however, that such Improvements must be complete by no later than, and
the extended Closing Date may not be extended to a date later than, the earlier
to occur of (i) a date which reasonably allows the Completion of the damaged
Improvements, and (ii) February 24, 1997. If Seller does not commence or
complete such restoration within such time period, then Buyer may elect within
the next thirty (30) days pursuant to a writing delivered to Seller and Escrow
Holder to (i) in the case of an insured casualty continue this Agreement, in
which case Seller shall assign to Buyer at the Closing any insurance proceeds to
which Seller is entitled with respect to such damage and Buyer shall further be
entitled to deduct from the Purchase Price the amount of any deductible payable
by Seller under the applicable casualty insurance policy; or (ii) in the case of
an uninsured casualty, continue this Agreement and Buyer shall pay the first
$100,000 of costs incurred to restore the Property and Seller shall pay the next
of such restoration costs; provided, however, that in the event that the
estimated restoration costs exceed $200,000 Buyer may continue this Agreement
and Buyer shall pay all restoration costs other than the $100,000 Seller is
obligated to pay as set forth above, provided further, however, that if Buyer is
unwilling to pay such restoration costs, this Agreement shall terminate; or
(iii) terminate this Agreement, in which case Buyer and Seller shall have no
further rights and obligations to the Seller under this Agreement except as
provided in Section 6.9. Buyer's failure to have elected any of these options
within the time allotted therefor shall be deemed to be an election of option
(iii).
(d) DEFINITION OF MATERIAL TAKING. For the purposes of this
Section 9.2, a taking or threatened taking by eminent domain or similar
proceedings shall be deemed material if the value of that portion of the
Property to be so taken exceeds $200,000, or if Buyer determines that the
Property so affected is materially adversely affected by such taking or
threatened taking.
(e) EFFECT OF NON-MATERIAL TAKING. If prior to the Closing
there is a non-material taking or threatened taking of a portion of the Property
(i) this Agreement may not be terminated and (ii) Seller will assign to Buyer at
the Closing all of Seller's rights in
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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 one (1) day after Seller receives
notice of or otherwise becomes aware of any taking or threatened taking
affecting the Property.
(f) EFFECT OF MATERIAL TAKING. If prior to the Closing there is
a material taking or threatened material taking of a portion of the Property or
all of it, Seller shall notify Buyer in writing of such taking or threatened
taking, and within ten (10) days after Buyer's receipt of such notice, Seller
and Buyer shall endeavor to agree upon whether the Property shall be purchased
by Buyer, whether there shall be any reduction in the Purchase Price, and
whether there shall be any assignment of any condemnation award with respect to
such taking. If within such ten (10) 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 except as set
forth in Section 6.9. 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 X
MAINTENANCE AND OPERATION OF THE PROPERTY
10.1. MAINTENANCE. In addition to Seller's other obligations hereunder,
Seller shall, in between the date of this Agreement and the Closing Date, at
Seller's sole cost and expense, maintain the Property in good order, condition
and repair, reasonable wear and tear excepted, shall perform all work required
to be done by the landlord under the terms of any Lease affecting the Property,
pay all taxes, assessments, fines, penalties, charges and other operating
expenses, and shall make all repairs, maintenance and replacements (except to
the extent covered by casualty insurance) of the Improvements and any Personal
Property and otherwise operate the Property in a first class manner (and, where
applicable, 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 in excess of $500 without first receiving Buyer's
prior written consent thereof.
10.2. LEASES AND OTHER AGREEMENTS. Seller shall not, in between the
date of this Agreement and the Closing Date, enter into or terminate any Lease,
amendment of lease, contract or agreement pertaining to the Property or permit
any tenant of the Property to enter into or terminate any sublease, assignment
of lease, contract or agreement pertaining to the Property, or modify any lease,
contract or agreement pertaining to the Property or waive any rights of Seller
thereunder, without in each case obtaining Buyer's prior written consent
thereto, which may be granted or withheld in Buyer's sole and absolute
discretion. In particular, Seller acknowledges that Buyer may wish to occupy
the Fourth Floor of the Property and Seller will not lease or enter into any
other agreement related to the Fourth Floor unless this Agreement is terminated.
Seller further agrees either to complete all unfinished tenant improvement
obligations prior to Closing or to credit the Purchase Price in an amount
sufficient to satisfy such obligations.
10.3. CONSENTS AND NOTICES. Seller and Buyer shall cooperate with each
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other and exercise commercially reasonably efforts to obtain as of the Closing
Date, obtain 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, the Leases or other
documents and instruments contemplated thereby.
ARTICLE XI
MISCELLANEOUS
11.1. 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 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: Xxxxxx X. Xxxxxxxxxx
Xxx. Xxxxx X. Xxxxxxxxxx
Xxxxxxxxxx & Company
0000 Xxxxxxxx Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, XX 00000
IF TO BUYER: Pacific Gateway Properties, Inc.
One Xxxxxx Center
000 Xxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx
Fax No.: (000) 000-0000
with a copy to: Xxxxxx, Xxxx & Xxxxxxxx
Xxx Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxx X. Xxxxxx, Esq.
Fax No.: (000) 000-0000
IF TO ESCROW HOLDER
AND/OR TITLE COMPANY: Chicago Land Title Company
000 Xxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxxx Xxxxxxxxx
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.
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11.2. BROKERS AND FINDERS. Buyer and Seller each hereby represents and
warrants that no broker was involved in this Agreement or the transactions
contemplated hereby, other than the Seller's agreement with Xxxxxxxxxx & Company
and Xxxxxx X. Xxxxxxxx of Xxxxx Xxxxx & Company ("Broker") pursuant to which
Broker is entitled to a broker's fee and the payment of which Seller is solely
responsible. 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 Seller for any liability,
loss, cost, damage or expense (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 Buyer for any liability, loss, cost,
damage or expense (including reasonable attorneys' and paralegals' fees and
costs) which Buyer may sustain or incur by reason of such claim. The provisions
of this Section 11.2 shall survive the Closing.
11.3. 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 Buyer's interest under this Agreement may not be
assigned, encumbered or otherwise transferred whether voluntarily,
involuntarily, by operation of law or otherwise, without the prior written
consent of the Seller. Without limiting the generality of the foregoing, Buyer
may assign its rights and interests hereunder to a wholly-owned affiliate of
Buyer without Seller's consent, provided that such affiliate shall assume all of
the Buyer's rights and obligations hereunder.
11.4. AMENDMENTS. This Agreement may be amended or modified only by a
written instrument executed by the party asserted to be bound thereby.
11.5. 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 or Buyer 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; provided that the representations
and warranties shall terminate six (6) months after Closing. All
representations and warranties of Seller or Buyer contained in any certificate
or other instrument delivered at the Closing or any time prior thereto by or on
behalf of Seller in connection with the transaction contemplated hereby shall
constitute representations and warranties hereunder.
11.6. 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.
11.7. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of California.
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11.8. 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.
11.9. ATTORNEYS' FEES. In the event of any action or proceeding at law
or in equity between Buyer and Seller (including an action or proceeding between
Buyer and the trustee or debtor in possession while Seller is a debtor in a
proceeding under the Bankruptcy Code (Title 11 of the United States Code) or any
successor statute to such Code) to enforce or interpret any provision of this
Agreement or to protect or establish any right or remedy of either Buyer or
Seller hereunder, the unsuccessful party to such action or proceeding shall pay
to the prevailing party all costs and expenses, including, without limitation,
reasonable attorneys' and paralegals' fees and expenses (including without
limitation fees, costs and expenses of experts and consultants), incurred in
such action or proceeding and in any appeal in connection therewith by such
prevailing party, whether or not such action, proceeding or appeal is prosecuted
to judgment or other final determination, together with all costs of enforcement
and/or collection of any judgment or other relief. The term "prevailing party"
shall include, without limitation, a party who obtains legal counsel or brings
an action against the other by reason of the other's breach or default and
obtains substantially the relief sought by judgment. If such prevailing party
shall recover judgment in any such action, proceeding or appeal, such costs,
expenses and attorneys' and paralegals' and others' fees shall be included in
and as a part of such judgment.
11.10. NOTICE OF TERMINATION. If either Buyer or Seller elects to
terminate this Agreement, it will submit to Escrow Holder and the other party
hereto a notice of termination in duplicate. If Escrow Holder receives a notice
of termination, it is instructed to mail and fax one copy to the other such
party within one (1) business day. If Escrow Holder has not received a written
objection from the other party within ten (10) business days after mailing and
faxing the copy, Escrow Holder is to (i) comply with the instructions contained
in the notice of termination in accordance with this Agreement, (ii) pay
cancellation charges out of any funds on deposit in this Escrow, (iii) return
the Deposit to Buyer, and (iv) cancel this Agreement.
11.11. SPECIFIC PERFORMANCE/DAMAGES. In addition and without prejudice
to any right or remedy available to Buyer in law or equity, 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.
11.12. 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.
11.13. AUTHORITY. Subject, in the case of Buyer, to obtaining the Board
Approvals, the individuals signing below represent and warrant that they have
the requisite authority to
36
bind the entities on whose behalf they are signing.
11.14. COUNTERPARTS. 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.
11.15. TIME OF THE ESSENCE. Time is of the essence in this Agreement
and with respect to all of its terms.
11.16. TAX DEFERRED EXCHANGE. The parties shall cooperate with one
another if either party elects to have the sale or acquisition of the Property
constitute a tax deferred exchange, provided such exchange is at no additional
expense to the other party.
11.17 CONFIDENTIALITY/PUBLICITY. Seller and Buyer agree that they
shall maintain this Agreement and the transaction contemplated hereby in strict
confidence and that no release, notice, or disclosure concerning the existence
or terms of this Agreement will be issued, given, or otherwise disseminated
without the other party's approval, provided that Buyer or Seller may make any
disclosures and announcements as required by applicable law.
11.18. PROHIBITION AGAINST CONSIDERATION OF OTHER PURCHASE PROPOSALS.
Until and unless this Agreement has been terminated by Buyer pursuant to Section
6.9 hereto, Seller shall not directly or indirectly solicit or initiate any
discussions or negotiations with or provide any information to or otherwise
cooperate in any way with, or facilitate or encourage any effort or attempt to,
or enter any agreement or understanding with any person or group of persons
concerning any sale, lease, exchange, mortgage, pledge, transfer or other
disposition of the Property in a single transaction or a series of related
transactions, except for a extension or refinancing of the existing loan.
IN WITNESS WHEREOF, Seller, Buyer, and Escrow Holder have executed
this Agreement as of the date first above written.
BUYER: PACIFIC GATEWAY PROPERTIES, INC.
By: ss/ Xxxxxxx X. Xxxxxx
---------------------
Its: President
SELLERS:
ss/ Xxxxxx X. Xxxxxxxxxx
------------------------
XXXXXX X. XXXXXXXXXX
ss/Xxxxx X. Xxxxxxxxxx
----------------------
XXXXX X. XXXXXXXXXX
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