SAN DIEGO TECHNOLOGY CENTER AGREEMENT OF PURCHASE AND SALE
Exhibit
10.133
SAN
DIEGO TECHNOLOGY CENTER
AGREEMENT
OF PURCHASE AND SALE
This
Agreement, dated as of February 25, 2005, is between CALWEST INDUSTRIAL
HOLDINGS, LLC, a Delaware limited liability company (“Seller”), and
▇▇▇▇▇▇▇ PROPERTIES, L.P., a Maryland limited partnership (“Buyer”).
ARTICLE
I
PURCHASE
AND SALE OF PROPERTY
Section
1.1 Sale.
Seller
agrees to sell to Buyer, and Buyer agrees to purchase from Seller, subject to
the terms, covenants and conditions set forth herein, all of Seller’s right,
title and interest in and to the following property (collectively, the
“Property”):
(a) Real
Property. That
certain real property commonly known as “San Diego Tech Center” and located at
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, in the City of ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, as more
particularly described in Exhibit
A attached
hereto and made a part hereof (the “Land”),
together with (1) all improvements located thereon (the “Improvements”), (2)
all rights, benefits, privileges, easements, tenements, hereditaments,
rights-of-way and other appurtenances thereon or in any way appertaining
thereto, including all mineral rights, development rights, air and water rights,
and (3) all strips and gores and any land lying in the bed of any street, road
or alley, open or proposed, adjoining such Land (collectively, the “Real
Property”);
(b) Leases. All of
the landlord’s interest in and to all of the Leases (as defined in Section
2.1(b) below) of the Real Property, including Leases entered into after the date
of this Agreement as permitted by this Agreement;
(c) Tangible
Personal Property. All of
the equipment, machinery, furniture, furnishings, supplies and other tangible
personal property, if any, owned by Seller and now or hereafter located on and
used exclusively in the operation, ownership or maintenance of the Real Property
(collectively, the “Tangible
Personal Property”), but
specifically excluding from the Tangible Personal Property (1) any items of
personal property owned by tenants of the Property, (2) any items of personal
property in Seller’s property management office, if any, located on the Real
Property, (3) any items of personal property owned by third parties and leased
to Seller, and (4) proprietary computer software, systems and equipment and
related licenses used in connection with the operation or management of the
Property. Seller will provide to Buyer any list which is in Seller’s possession
of such Tangible Personal Property within the Delivery Period as defined in
Section 2.1 below; and
(d) Intangible
Personal Property. To the
extent assignable at no cost to Seller, all intangible personal property, if
any, owned by Seller and related to the Real Property and the Improvements,
including, without limitation: any trade names and trademarks associated with
the Real Property and the Improvements (but specifically excluding the names
“RREEF” and any derivatives thereof and “Calwest” any plans and specifications
and other architectural and
engineering
drawings for the Improvements; any warranties; any Service Contracts (as defined
in Section 2.1(b) below), licenses and other contract rights related to the
Property (but only to the extent Seller’s obligations thereunder are expressly
assumed by Buyer pursuant to the Assignment of Leases as defined in Section
8.3(a)(3) below); and any governmental permits, approvals and licenses
(including any pending applications), but excluding any rights of the Seller
against third parties with respect to the period prior to Closing and the rights
of Seller to rents and other payments from tenants and other third parties for
the period prior to Closing (collectively, the “Intangible
Personal Property”).
Section
1.2 Purchase
Price.
(a) The
purchase price of the Property is One Hundred Eighty Five Million Dollars
($185,000,000.00) (the “Purchase
Price”).
(b) The
Purchase Price shall be paid as follows:
(1) On or
prior to the Effective Date, Buyer shall deposit in escrow with ▇▇▇▇▇▇▇ Title
Company, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, ATTN: ▇▇▇▇▇
▇▇▇▇, Phone No. (415) 403-9080 ext. 21, Fax No. (▇▇▇) ▇▇▇-▇▇▇▇, e-mail
▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇ (the “Title
Company”) cash
or other immediately available funds in the amount of Five Million Dollars
($5,000,000.00) (the “Deposit”).
(2) The
Deposit shall be held in an interest bearing account and all interest thereon,
less investment fees, if any, shall be deemed a part of the Deposit. If the sale
of the Property as contemplated hereunder is consummated, then the Deposit shall
be paid to Seller at the Closing (as defined in Section 1.2(b)(3) below) and
credited against the Purchase Price. IF
THE SALE OF THE PROPERTY IS NOT CONSUMMATED DUE TO SELLER’S DEFAULT HEREUNDER,
THEN BUYER MAY ELECT, AS BUYER’S SOLE AND EXCLUSIVE REMEDY, EITHER TO: (1)
TERMINATE THIS AGREEMENT AND RECEIVE A REFUND OF THE DEPOSIT, IN WHICH EVENT
NEITHER PARTY SHALL HAVE ANY FURTHER RIGHTS OR OBLIGATIONS HEREUNDER EXCEPT AS
PROVIDED IN SECTIONS 6.1, 9.3 AND 9.9 BELOW, OR (2) ENFORCE SPECIFIC PERFORMANCE
OF THIS AGREEMENT. BUYER SHALL NOT HAVE ANY OTHER RIGHTS OR REMEDIES HEREUNDER
AS A RESULT OF ANY DEFAULT BY SELLER PRIOR TO CLOSING, AND BUYER HEREBY WAIVES
ANY OTHER SUCH REMEDY AS A RESULT OF A DEFAULT HEREUNDER BY
SELLER.
IF THE SALE IS NOT CONSUMMATED DUE TO ANY DEFAULT BY BUYER HEREUNDER, THEN
SELLER SHALL RETAIN THE DEPOSIT AS LIQUIDATED DAMAGES, AND SELLER SHALL NOT HAVE
ANY OTHER RIGHTS OR REMEDIES AGAINST BUYER EXCEPT AS PROVIDED IN SECTIONS 6.1,
9.3 OR 9.9 BELOW. THE PARTIES HAVE AGREED THAT SELLER’S ACTUAL DAMAGES, IN THE
EVENT OF A FAILURE TO CONSUMMATE THIS SALE DUE TO BUYER’S DEFAULT PRIOR TO
CLOSING, WOULD BE EXTREMELY DIFFICULT OR IMPRACTICABLE TO DETERMINE. AFTER
NEGOTIATION, THE PARTIES HAVE AGREED THAT, CONSIDERING ALL THE CIRCUMSTANCES
EXISTING ON THE DATE OF THIS AGREEMENT, THE AMOUNT OF THE DEPOSIT IS A
REASONABLE ESTIMATE OF THE DAMAGES THAT SELLER WOULD INCUR IN SUCH EVENT. BY
2
PLACING
THEIR INITIALS BELOW, EACH PARTY SPECIFICALLY CONFIRMS THE ACCURACY OF THE
STATEMENTS MADE ABOVE AND THE FACT THAT EACH PARTY WAS REPRESENTED BY COUNSEL
WHO EXPLAINED, AT THE TIME THIS AGREEMENT WAS MADE, THE CONSEQUENCES OF THIS
LIQUIDATED DAMAGES PROVISION. THE FOREGOING IS NOT INTENDED TO LIMIT BUYER’S
OBLIGATIONS UNDER SECTIONS 6.1, 9.3 AND 9.9.
INITIALS: SELLER
WHO BUYER RFM
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
3
(3) The
balance of the Purchase Price, which is One Hundred Eighty Million Dollars
($180,000,000) (plus or minus the prorations pursuant to Section 8.5 hereof)
shall be paid to Seller in cash or by wire transfer of other immediately
available funds at the consummation of the purchase and sale contemplated
hereunder (the “Closing”).
ARTICLE
II
CONDITIONS
Section
2.1 Buyer’s
Conditions Precedent.
Subject
to the provisions of Section 9.3 hereof, Seller has provided and/or shall
provide Buyer and its consultants and other agents and representatives with
access to the Property to perform Buyer’s inspections and review and determine
the present condition of the Property. Seller has delivered or made available to
Buyer at Seller’s offices or at the Real Property, or shall within the Delivery
Period (as defined below) deliver or make available to Buyer at Seller’s offices
or at the Real Property, copies of all Due Diligence Materials (as defined in
Section 2.2 below) in Seller’s possession, except as otherwise specifically
provided herein. Notwithstanding anything to the contrary contained herein, the
Due Diligence Materials shall expressly exclude (i) those portions of the Due
Diligence Materials that would disclose Seller’s cost of acquisition of the Real
Property, or cost of construction of the Improvements and related soft costs, or
any estimates of costs to repair, replace, remediate or maintain the Real
Property (as opposed to Due Diligence Materials that would disclose actual costs
that have been incurred by Seller for the repair, replacement, remediation or
maintenance of the Real Property, which shall be made available to Buyer to the
extent the same exist and are in Seller’s possession), (ii) any reports,
presentations, summaries and the like prepared for any of Seller’s boards,
committees, partners or investors in connection with its consideration of the
acquisition of the Real Property, construction of the Improvements or sale of
the Property, (iii) any proposals, letters of intent, draft contracts or the
like prepared by or for other prospective purchasers of the Property or any part
thereof, (iv) Seller’s internal memoranda, attorney-client privileged materials,
internal appraisals, structural or physical inspection reports (except for those
structural or physical inspection reports which have been delivered to Buyer on
or before the Effective Date), and (v) any information which is the subject of a
confidentiality agreement between Seller and a third party that does not permit
disclosure to Buyer as a prospective purchaser of the Property (the items
described in clauses (i), (ii) (iii), (iv) and (v) being collectively referred
to as the “Confidential
Information”). The
Due Diligence Materials shall include a rent roll for the Property
(“Rent
Roll”) dated
as of February 15, 2005. The Rent Roll shall include, without limitation, the
amount of the security deposit, if any, held by Seller under each Lease,
provided, however, that if the Rent Roll does not list the tenant security
deposits, Seller shall provide Buyer with the list of such security deposits on
or before the expiration of the Contingency Period. Prior to the Closing, Seller
shall deliver to Buyer an update of the Rent Roll current as of no earlier than
seven (7) days prior to the Closing. The “Delivery
Period” shall
mean the period which ends one (1) business day after the Effective Date (as
defined in Section 9.14 below). Buyer’s obligation to purchase the Property is
conditioned upon Buyer’s review and approval of the following, within the
applicable time periods described in Sections 2.2 and 4.1 hereof:
4
(a) Title to
the Property and survey matters in accordance with Article IV below.
(b) The Due
Diligence Materials, including, but not limited to, tenant leases, any
guaranties thereof and any other occupancy agreements, and all amendments and
modifications thereof (collectively, the “Leases”)
affecting the Property, and of all contracts pertaining to the operation of the
Property, including all management, leasing, service and maintenance agreements,
and equipment leases (collectively, the “Service
Contracts”).
(c) The
physical condition of the Property.
(d) The
zoning, land use, building, environmental and other statutes, rules, or
regulations applicable to the Property.
(e) The
tenant correspondence files, operating statements and books and records
pertaining to the operation of the Property in each case for each of the three
(3) most recent years during which the Property has been owned by Seller and for
the current year (to the extent available), current real estate tax bills, any
warranties, licenses, permits, certificates of occupancy, plans and
specifications, and any current rent roll, current accounts receivable schedule
and list of Tangible Personal Property in such form as Seller shall have in its
possession for the Property, and other agreements or documents pertaining to the
Property which will be binding on Buyer after Closing.
(f) Any other
matters Buyer deems relevant to the Property.
Section
2.2 Contingency
Period.
Buyer
shall have until March 2, 2005, 5:00 p.m. Pacific Standard Time (such period
being referred to herein as the “Contingency
Period”) to
review and approve the matters described in Sections 2.1(b)-(f) above in Buyer’s
sole discretion, including, without limitation, title and survey review of the
Property (as described in Section 4.1(a) below). If Buyer determines to proceed
with the purchase of the Property, then Buyer shall, before the end of the
Contingency Period, so notify Seller in writing, in which case Buyer shall be
deemed to have approved all of the matters described in Sections 2.1(a)-(f)
above, including, without limitation, all documents, Service Contracts and other
contracts, agreements, Leases, reports, surveys and other items and materials
delivered to, prepared by or on behalf of or made available to Buyer in
connection with this Agreement (the “Due
Diligence Materials”), and
the Deposit shall become nonrefundable except as expressly provided herein. If
before the end of the Contingency Period Buyer fails to give Seller such written
notice, then Buyer shall be deemed to have elected to terminate this Agreement,
the Deposit shall be returned to Buyer, and neither party shall have any further
rights or obligations hereunder except as provided in Sections 6.1, 9.3 and 9.9
below.
5
ARTICLE
III
BUYER’S
EXAMINATION
Section
3.1 Representations
and Warranties of Seller.
Subject
to the disclosures contained in Schedule
1 attached
hereto and made a part hereof (the “Disclosure
Items”),
matters contained in the Due Diligence Materials, and any matters of public
record where the Property is located, Seller hereby makes the following
representations and warranties with respect to the Property. Notwithstanding
anything to the contrary contained herein or in any document delivered in
connection herewith, Seller shall have no liability with respect to the
Disclosure Items.
(a) Seller
has not (i) made a general assignment for the benefit of creditors,
(ii) filed any voluntary petition in bankruptcy or suffered the filing of
any involuntary petition by Seller’s creditors, (iii) suffered the appointment
of a receiver to take possession of all, or substantially all, of Seller’s
assets, (iv) suffered the attachment or other judicial seizure of all, or
substantially all, of Seller’s assets, (v) admitted in writing its inability to
pay its debts as they come due, or (vi) made an offer of settlement, extension
or composition to its creditors generally.
(b) Seller is
not a “foreign person” as defined in Section 1445 of the Internal Revenue Code
of 1986, as amended (the “Code”) and
any related regulations.
(c) Subject
to the provisions of Section 9.18 below, (i) this Agreement has been, and all
documents executed by Seller which are to be delivered to Buyer at Closing will
be, duly authorized, executed and delivered by Seller, and (ii) this Agreement
does not and such other documents will not violate any provision of any
agreement or judicial order to which Seller is a party or to which Seller or, to
the best of Seller’s knowledge, the Property is subject.
(d) The only
Leases in force for the Property (including amendments thereof) are set forth in
a tenant list attached hereto as Exhibit
B and made
a part hereof (or, if not attached, which Seller shall deliver to Buyer within
the Delivery Period and which at that time will be attached hereto as
Exhibit B and made
a part hereof), and to the best of Seller’s knowledge, Seller has (i) received
no written notice of any default by Seller with respect to such Leases which has
not been cured and (ii) as of the date hereof, has not delivered any written
notice of any default by any tenant which has not been cured except as set forth
on Schedule 1.
Notwithstanding anything contained in this Agreement to the contrary, in no
event shall Seller’s representation and warranty contained in (ii) above be
deemed to be remade as of the Closing.
(e) The only
Service Contracts in effect for the Property are set forth in a list of Service
Contracts attached hereto as Exhibit
G and made
a part hereof (or, if not attached, which Seller shall deliver to Buyer within
the Delivery Period) and which at that time will be attached hereto as
Exhibit
G and made
a part hereof.
(f) To the
best of Seller’s knowledge, Seller has not received written notice of any
litigation or governmental proceeding (including, but not limited to any
condemnation proceeding) pending with respect to the Property, or with respect
to Seller which impairs Seller’s
6
ability
to perform its obligations under this Agreement, except for any personal injury
or property damage action for which there is adequate insurance
coverage.
(g) To the
best of Seller’s knowledge, Seller has received no written notice from any
governmental authority of any violation of any law applicable to the Property
(including, without limitation, any Environmental Law as defined in Section
3.6(a)(2) below) that has not been corrected.
(h) Seller
has been duly organized, is validly existing, and is in good standing in the
state in which it was formed, and, if so required to, is qualified to do
business in the state in which the Real Property is located.
Each of
the representations and warranties of Seller contained in this Section 3.1:
(1) shall be true in all material respects as of the date of Closing except
as provided in Section 3.1(d) above, subject in each case to (A) any Exception
Matters (as defined below), (B) the Disclosure Items, and (C) other matters
expressly permitted in this Agreement or otherwise specifically approved in
writing; and (2) shall survive the Closing as provided in Section 3.3 below.
Section
3.2 No
Liability for Exception Matters.
As used
herein, the term “Exception
Matter” shall
refer to a matter which would make a representation or warranty of Seller
contained in this Agreement untrue or incorrect and which is disclosed to Buyer
in the Due Diligence Materials, the Disclosure Items, or otherwise, or is a
matter of public record, or is otherwise discovered by Buyer before the Closing,
including, without limitation, matters disclosed in any tenant estoppel
certificate or from interviews with tenants, property managers or any other
person. If Buyer first obtains knowledge of any material Exception Matter after
the close of the Contingency Period and prior to Closing and such Exception
Matter was not contained in the Due Diligence Materials, the Disclosure Items or
is not a matter of public record, Buyer’s sole remedy shall be to terminate this
Agreement on the basis thereof, upon written notice to Seller within the earlier
of (a) five (5) days following Buyer’s discovery of such Exception Matter or (b)
the Closing, which ever occurs first, in which event the Deposit shall be
returned to Buyer, unless within the earlier of five (5) days after receipt of
such notice or by the Closing, as the case may be, Seller notifies Buyer in
writing that it elects to attempt to cure or remedy such Exception Matter, in
which event there shall be no return of the Deposit unless and until Seller is
unable to so cure or remedy within the time period set forth below. Seller shall
be entitled to extend the Closing Date (as defined in Section 8.2 below) for up
to fifteen (15) business days in order to attempt to cure or remedy any
Exception Matter. Buyer’s failure to give notice within five (5) days after it
has obtained knowledge of a material Exception Matter shall be deemed a waiver
by Buyer of such Exception Matter. Seller shall have no obligation to cure or
remedy any Exception Matter, even if Seller has notified Buyer of Seller’s
election to attempt to cure or remedy any Exception Matter (except as
specifically provided in Section 4.1(c) hereof), and, subject to Buyer’s right
to terminate this Agreement as set forth above, Seller shall have no liability
whatsoever to Buyer with respect to any Exception Matters. Upon any termination
of this Agreement, neither party shall have any further rights nor obligations
hereunder, except as provided in Sections 6.1, 9.3 and 9.9 below. If Buyer
obtains knowledge of any Exception Matter before the Closing, but nonetheless
elects to
7
proceed
with the acquisition of the Property, Seller shall have no liability with
respect to such Exception Matter, notwithstanding any contrary provision,
covenant, representation or warranty contained in this Agreement or in any Other
Documents (as defined in Section 9.19 below).
Section
3.3 Survival
of Seller’s Representations and Warranties of Sale.
The
representations and warranties of Seller contained herein or in any Seller
estoppel delivered pursuant to Section 8.4 below or in any Other Documents shall
survive for a period of nine (9) months after the Closing. Any claim which Buyer
may have against Seller for a breach of any such representation or warranty,
whether such breach is known or unknown, which is not specifically asserted by
written notice to Seller within such nine (9) month period shall not be valid or
effective, and Seller shall have no liability with respect thereto.
Section
3.4 Seller’s
Knowledge.
For
purposes of this Agreement and any document delivered at Closing, whenever the
phrase “to
the best of Seller’s knowledge” or the
“knowledge” of
Seller or words of similar import are used, they shall be deemed to mean and are
limited to the current actual knowledge only of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, at the times
indicated only, and not any implied, imputed or constructive knowledge of such
individual(s) or of Seller or any Seller Related Parties (as defined in Section
3.7 below), and without any independent investigation or inquiry having been
made or any implied duty to investigate, make any inquiries or review the Due
Diligence Materials. Furthermore, it is understood and agreed that such
individual(s) shall have no personal liability in any manner whatsoever
hereunder or otherwise related to the transactions contemplated
hereby.
Section
3.5 Representations
and Warranties of Buyer.
Buyer
represents and warrants to Seller as follows:
(a) This
Agreement and all documents executed by Buyer which are to be delivered to
Seller at Closing do not and at the time of Closing will not violate any
provision of any agreement or judicial order to which Buyer is a party or to
which Buyer is subject.
(b) Buyer has
not (i) made a general assignment for the benefit of creditors, (ii) filed any
voluntary petition in bankruptcy or suffered the filing of any involuntary
petition by Buyer’s creditors, (iii) suffered the appointment of a receiver to
take possession of all, or substantially all, of Buyer’s assets, (iv) suffered
the attachment or other judicial seizure of all, or substantially all, of
Buyer’s assets, (v) admitted in writing its inability to pay its debts as they
come due, or (vi) made an offer of settlement, extension or composition to its
creditors generally.
(c) Buyer has
been duly organized, is validly existing and is in good standing in the state in
which it was formed, and, if required to do so, is qualified to do business in
the state in which the Real Property is located. This Agreement has been, and
all documents executed by Buyer which are to be delivered to Seller at Closing
will be, duly authorized, executed and delivered by Buyer.
8
(d) Buyer is
purchasing the Property as investment rental property, and not for Buyer’s own
operations or use.
(e) Buyer is
not a party in interest with respect to any employee benefit or other plan
within the meaning of Section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended (“ERISA”), or of
Section 4975(e)(1) of the Code, which is subject to ERISA or Section 4975 of the
Code and which is an investor in Seller.
(f) Other
than Seller’s Broker (as defined in Section 6.1 below) Buyer has had no contact
with any broker or finder with respect to the Property.
(g) Buyer is
in compliance with the requirements of Executive Order No. 133224, 66 Fed
Reg. 49079 (September 25, 2001) (the “Order”) and
other similar requirements contained in the rules and regulations of the Office
of Foreign Asset Control. Department of the Treasury (“OFAC”) and in
any enabling legislation or other Executive Orders in respect thereof (the Order
and such other rules, regulations, legislation, or orders are collectively
called the “Orders”). Buyer
agrees to make its policies, procedures and practices regarding compliance with
the Orders available to Seller for its review and inspection during normal
business hours and upon reasonable prior notice. Buyer agrees as
follows:
(1) Buyer is
not listed on the Specially Designated Nationals and Blocked Persons List
maintained by OFAC pursuant to the Order and/or on any other list of terrorists
or terrorist organizations maintained pursuant to any of the rules and
regulations of OFAC or pursuant to any other applicable Orders (such lists are
collectively referred to as the “Lists”);
(2) Buyer has
not been determined by competent authority to be subject to the prohibitions
contained in the Orders;
(3) The
ownership of Buyer is not controlled by, nor does Buyer act for or on behalf of,
any person or entity on the Lists or any other person or entity who has been
determined by competent authority to be subject to the prohibitions contained in
the Orders; and
(4) Buyer
shall not transfer or permit the transfer of any interest in Buyer or any
beneficial owner in Buyer to any person who is or whose beneficial owners are
listed on the Lists; provided, however, that the requirements of this Section
3.5(g) shall not be applicable to any direct or indirect publicly held ownership
interests in Buyer.
Each of
the representations and warranties of Buyer contained in this Section shall be
deemed remade by Buyer as of the Closing and shall survive the Closing for a
period of nine (9) months; provided, however, that Buyer’s representations and
warranties made pursuant to Sections 3.5(d) and (g) shall survive the Closing
indefinitely.
Section
3.6 Buyer’s
Independent Investigation.
(a) By Buyer
electing to proceed under Section 2.2, Buyer will be deemed to have acknowledged
and agreed that it has been given a full opportunity to inspect and investigate
9
each and
every aspect of the Property, either independently or through agents of Buyer’s
choosing, including, without limitation:
(1) All
matters relating to title and survey, together with all governmental and other
legal requirements such as taxes, assessments, zoning, use permit requirements
and building codes.
(2) The
physical condition and aspects of the Property, including, without limitation,
the interior, the exterior, the square footage within the improvements on the
Real Property and within each tenant space therein, the structure, seismic
aspects of the Property, the foundation, roof, paving, parking facilities,
utilities, and all other physical and functional aspects of the Property. Such
examination of the physical condition of the Property shall include an
examination for the presence or absence of Hazardous Materials, as defined
below, which shall be performed or arranged by Buyer (subject to the provisions
of Section 9.3 hereof) at Buyer’s sole expense. For purposes of this Agreement,
“Hazardous
Materials” shall
mean inflammable explosives, radioactive materials, asbestos,
asbestos-containing materials, polychlorinated biphenyls, lead, lead-based
paint, radon, under and/or above ground tanks, hazardous materials, hazardous
wastes, hazardous substances, oil, or related materials, which are listed or
regulated in the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended (42 U.S.C. Sections 6901, et seq.), the
Resources Conservation and Recovery Act of 1976 (42 U.S.C. Section 6901,
et seq.), the
Clean Water Act (33 U.S.C. Section 1251, et seq.), the
Safe Drinking Water Act (14 U.S.C. Section 1401, et seq.), the
Hazardous Materials Transportation Act (49 U.S.C. Section 1801, et seq.), and
the Toxic Substance Control Act (15 U.S.C. Section 2601, et seq.), the
California Hazardous Waste Control Law (California Health and Safety Code
Section 25100, et seq.), the
▇▇▇▇▇▇-Cologne Water Quality Control Act (California Water Code Section 13000,
et seq.), and
the Safe Drinking Water and Toxic Enforcement Act of 1986 (California Health and
Safety Code Section 25249.5, et seq.) and any
other applicable federal, state or local laws (collectively, “Environmental
Laws”).
(3) Any
easements and/or access rights affecting the Property.
(4) The
Leases and all matters in connection therewith, including, without limitation,
the ability of the tenants to pay the rent and the economic viability of the
tenants.
(5) The
Service Contracts and any other documents or agreements of significance
affecting the Property.
(6) All other
matters of material significance affecting the Property, including, but not
limited to, the Due Diligence Materials.
(b) Except as
expressly stated herein, Seller makes no representation or warranty as to the
truth, accuracy or completeness of any materials, data or information delivered
by Seller to Buyer in connection with the transaction contemplated hereby. Buyer
acknowledges and agrees that all materials, data and information delivered by
Seller to Buyer in connection with the transaction contemplated hereby are
provided to Buyer as a convenience only and that any reliance on or use of such
materials, data or information by Buyer shall be at the sole risk of
10
Buyer,
except as otherwise expressly stated herein. Without limiting the generality of
the foregoing provisions, Buyer acknowledges and agrees that (a) any
environmental or other report with respect to the Property which is delivered by
Seller to Buyer shall be for general informational purposes only, (b) Buyer
shall not have any right to rely on any such report delivered by Seller to
Buyer, but rather will rely on its own inspections and investigations of the
Property and any reports commissioned by Buyer with respect thereto, (c) neither
Seller, any affiliate of Seller nor the person or entity which prepared any such
report delivered by Seller to Buyer shall have any liability to Buyer for any
inaccuracy in or omission from any such report and (d) the failure to deliver
any report as to the environmental or other condition of the Property, including
any proposal for work at the Property which was not performed by Seller, shall
not be actionable by Buyer under this Agreement or otherwise.
(c) EXCEPT AS
EXPRESSLY SET FORTH IN SECTION 3.1 ABOVE AND ELSEWHERE IN THIS AGREEMENT OR THE
OTHER DOCUMENTS, BUYER SPECIFICALLY ACKNOWLEDGES AND AGREES THAT SELLER IS
SELLING AND BUYER IS PURCHASING THE PROPERTY ON AN “AS IS WITH ALL FAULTS” BASIS
AND THAT BUYER IS NOT RELYING ON ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND
WHATSOEVER, EXPRESS OR IMPLIED, FROM SELLER, ANY SELLER RELATED PARTIES, OR
THEIR AGENTS OR BROKERS, OR ANY OTHER PERSON ACTING OR PURPORTING TO ACT ON
BEHALF OF SELLER AS TO ANY MATTERS CONCERNING THE PROPERTY, INCLUDING WITHOUT
LIMITATION: (i) the quality, nature, adequacy and physical condition and
aspects of the Property, including, but not limited to, the structural elements,
seismic aspects of the Property, foundation, roof, appurtenances, access,
landscaping, parking facilities and the electrical, mechanical, HVAC, plumbing,
sewage, and utility systems, facilities and appliances, the square footage
within the improvements on the Real Property and within each tenant space
therein, (ii) the quality, nature, adequacy, and physical condition of
soils, geology and any groundwater, (iii) the existence, quality, nature,
adequacy and physical condition of utilities serving the Property, (iv) the
development potential of the Property, and the Property’s use, habitability,
merchantability, or fitness, suitability, value or adequacy of the Property for
any particular purpose, (v) the zoning or other legal status of the
Property or any other public or private restrictions on use of the Property,
(vi) the compliance of the Property or its operation with any applicable
codes, laws, regulations, statutes, ordinances, covenants, conditions and
restrictions of any governmental or quasi-governmental entity or of any other
person or entity, (vii) the presence of Hazardous Materials on, under or
about the Property or the adjoining or neighboring property, (viii) the
quality of any labor and materials used in any improvements on the Real
Property, (ix) the condition of title to the Property, (x) the Leases,
Service Contracts, or other documents or agreements affecting the Property, or
any information contained in any rent roll furnished to Buyer for the Property,
(xi) the value, economics of the operation or income potential of the
Property, or (x) any other fact or condition which may affect the Property,
including without limitation, the physical condition, value, economics of
operation or income potential of the Property. In addition, Seller shall have no
legal obligation to apprise Buyer regarding any event or other matter involving
the Property which occurs after the Effective Date or to otherwise update the
Due Diligence Items, unless and until an event or other matter occurs which
would cause Seller to be unable to remake any of its representations or
warranties contained in this Agreement.
11
Section
3.7 Release.
(a) Without
limiting the above, and subject to (i) the representations and warranties of
Seller contained in Section 3.1 hereof, and (ii) Seller’s obligations which
expressly survive the Closing under this Agreement and the Other Documents, from
and after Closing, Buyer on behalf of itself and its successors and assigns
waives its right to recover from, and forever releases and discharges, Seller,
Seller’s affiliates, Seller’s investment advisor, the partners, trustees,
beneficiaries, shareholders, members, managers, directors, officers, employees
and agents and representatives of each of them, and their respective heirs,
successors, personal representatives and assigns (collectively, the
“Seller
Related Parties”), from
any and all demands, claims, legal or administrative proceedings, losses,
liabilities, damages, penalties, fines, liens, judgments, costs or expenses
whatsoever (including, without limitation, court costs and attorneys’ fees and
disbursements), whether direct or indirect, known or unknown, foreseen or
unforeseen, that may arise on account of or in any way be connected with or
related to the Property, this Agreement and/or the transactions contemplated
hereunder, including, without limitation (i) the physical condition of the
Property including, without limitation, all structural and seismic elements, all
mechanical, electrical, plumbing, sewage, heating, ventilating, air conditioning
and other systems, the environmental condition of the Property and the presence
of Hazardous Materials on, under or about the Property, or (ii) any law or
regulation applicable to the Property, including, without limitation, any
Environmental Law and any other federal, state or local law.
(b) In
connection with Section 3.7(a) above, Buyer expressly waives the benefits of
Section 1542 of the California Civil Code, which provides as follows: “A GENERAL
RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO
EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM
MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.” BUYER
ACKNOWLEDGES AND AGREES THAT IT HAS BEEN REPRESENTED BY LEGAL COUNSEL OF ITS
CHOICE IN CONNECTION WITH THIS AGREEMENT, AND THAT SUCH COUNSEL HAS EXPLAINED TO
BUYER THE PROVISIONS OF THIS SECTION 3.7. BY INITIALING BELOW, BUYER CONFIRMS IT
HAS AGREED TO THE PROVISIONS OF THIS SECTION 3.7.
BUYER’S
INITIALS: RFM
12
Section
3.8 Survival.
The
provisions of this Article III shall survive the Closing subject to the
limitations and qualifications contained in such provisions and in Sections 9.11
and 9.19 hereof.
ARTICLE
IV
TITLE
Section
4.1 Conditions
of Title.
(a) Upon
execution of this Agreement, Seller shall order an updated preliminary title
report or commitment (the “Title
Report”) from
the Title Company, which shall be delivered to Buyer, together with copies of
all underlying documents relating to title exceptions referred to therein,
promptly upon Seller’s receipt thereof. Seller shall also furnish to Buyer
within the Delivery Period any existing survey of the Property in Seller’s
possession. Buyer shall immediately order any plat or survey of the Property or
any update thereto from a duly licensed surveyor (the “Survey”) if
desired by Buyer or if necessary to support the issuance of the Title Policy (as
defined in Section 4.2 below). Buyer shall provide to Seller a copy of the
Survey, which shall be certified to the Title Company, Buyer and Seller. Buyer
shall pay the entire cost of the Survey. If Closing does not occur, Buyer shall,
if Seller so requests, assign to Seller all contract rights Buyer has with the
surveyor and in such event Seller shall reimburse Buyer for the cost of the
Survey.
(b) In the
event the Title Company amends or updates the Title Report after the expiration
of the Contingency Period (each, a “Title
Report Update”), Buyer
shall furnish Seller with a written statement of objections, if any, to any
matter first raised in a Title Report Update (collectively, “Objections”) within
two (2) business days after its receipt of such Title Report Update (each, a
“Title
Update Review Period”).
Should Buyer fail to notify Seller in writing of any Objections to any matter
first disclosed in a Title Report Update prior to the expiration of the Title
Update Review Period, Buyer shall be deemed to have approved such matters which
shall be considered to be “Conditions
of Title” as
defined in Section 4.1(e) below.
(c) If Seller
receives a timely Objection in accordance with Section 4.1(b) (“Buyer’s
Notice”),
Seller shall have the right, but not the obligation, within two (2) business
days after receipt of Buyer’s Notice (“Seller’s
Response Period”), to
elect to attempt to cure any such matter upon written notice to Buyer
(“Seller’s
Response”), and
may extend the Closing Date for up to fifteen (15) business days to allow such
cure. If Seller does not give any Seller’s Response, Seller shall be deemed to
have elected not to cure any such matters. Notwithstanding the foregoing, Seller
shall in any event be obligated to cure those Objections (i) that are mortgage
or deed of trust liens against the Property, in each case granted by Seller (and
not tenants of the Property or other third parties), (ii) that are mechanics’
liens against the Property, but only those mechanics’ liens that arise pursuant
to agreements in which Seller (and not tenants or other third parties) is the
contracting party, or (iii) that have been voluntarily placed against the
Property by Seller (and not tenants of the Property or other third parties)
after the date of this Agreement and that are not otherwise permitted pursuant
to the provisions hereof. Seller shall be
13
entitled
to apply the Purchase Price towards the payment or satisfaction of such liens,
and may cure any Objection by causing the Title Company to insure against
collection of the same out of the Property.
(d) If Seller
elects (or is deemed to have elected) not to attempt to cure any Objections
raised in any Buyer’s Notice timely delivered by Buyer to Seller pursuant to
Section 4.1(b), or if Seller notifies Buyer that it elects to attempt to cure
any such Objection but then does not for any reason effect such cure on or
before the Closing Date as it may be extended hereunder, then Buyer, as its sole
and exclusive remedy, shall have the option of terminating this Agreement by
delivering written notice thereof to Seller within two (2) business days after
(as applicable) (i) its receipt of Seller’s Response stating that Seller
will not attempt to cure any such Objection or (ii) the expiration of
Seller’s Response Period if Seller does not deliver a Seller’s Response or
(iii) Seller’s failure to cure by the Closing Date (as it may be extended
hereunder) any Objection which Seller has previously elected to attempt to cure
pursuant to a Seller’s Response. In the event of such a termination, the Deposit
shall be returned to Buyer, and neither party shall have any further rights or
obligations hereunder except as provided in Sections 6.1, 9.3 and 9.9 below. If
no such termination notice is timely received by Seller hereunder, Buyer shall
be deemed to have waived all such Objections in which event those Objections
shall become “Conditions
of Title” under
Section 4.1(e). If the Closing is not consummated for any reason other than
Seller’s default hereunder, Buyer shall be responsible for any title or escrow
cancellation charges.
(e) At the
Closing, Seller shall convey title to the Property to Buyer by deed in the form
of Exhibit
C attached
hereto (the “Deed”)
subject to no exceptions other than:
(1) Interests
of tenants in possession under the Leases;
(2) Matters
created by or with the written consent of Buyer;
(3) Non-delinquent
liens for real estate taxes and assessments;
(4) Any
exceptions disclosed by the Title Report, the survey(s) delivered to Buyer
pursuant to Section 4.1(a) above and/or the Survey, and the Due Diligence
Materials;
(5) Any
exceptions disclosed by any Title Report Update which is approved or deemed
approved by Buyer in accordance with this Article IV above; and
(6) Any other
exceptions to title disclosed by the public records or which would be disclosed
by an inspection and/or survey of the Property that were not disclosed in the
Title Report or the Title Report Update.
All of
the foregoing exceptions shall be referred to collectively as the “Conditions
of Title.”
Subject to the terms and conditions contained elsewhere in this Agreement, by
acceptance of the Deed and the Closing of the purchase and sale of the Property,
(x) Buyer agrees it is assuming for the benefit of Seller all of the
obligations of Seller with respect to the Conditions of Title from and after the
Closing, and (y) Buyer agrees that Seller shall have conclusively satisfied
its
14
obligations
with respect to title to the Property. The provisions of this Section shall
survive the Closing.
Section
4.2 Evidence
of Title.
Delivery
of title in accordance with the foregoing shall be evidenced by the willingness
of the Title Company to issue, at Closing, its Owner’s ALTA Policy of Title
Insurance in the amount of the Purchase Price showing title to the Real Property
vested in Buyer, subject to the Conditions of Title (the “Title
Policy”);
provided, however, that with respect to the Title Company only, and not Seller,
Buyer may elect to require the Title Company to list all of the specific
exceptions to title disclosed to Buyer prior to the Closing on the Title Policy.
The Title Policy may contain such endorsements as reasonably required by Buyer
provided that the issuance of such endorsements shall not be a condition to
Buyer’s obligations hereunder. Buyer shall pay the costs for all such
endorsements. Except as may be agreed to by Seller in connection with the
removal from title of any matters required to be removed by Seller or any
matters that Seller elects, in Seller’s sole discretion, to remove in connection
with Buyer’s approval of the Conditions of Title, Seller shall have no
obligation to provide any indemnity or agreement to the Title Company or Buyer
to support the issuance of the Title Policy or any such endorsements other than
an affidavit as to the existing tenants of the Property and any ongoing
construction work at the Property.
ARTICLE
V
RISK
OF LOSS AND INSURANCE PROCEEDS
Section
5.1 Minor
Loss.
Buyer
shall be bound to purchase the Property for the full Purchase Price as required
by the terms hereof, without regard to the occurrence or effect of any damage to
the Property or destruction of any improvements thereon or condemnation of any
portion of the Property, provided that: (a) the cost to repair any such damage
or destruction does not exceed an amount equal to Seven Million Dollars
($7,000,000) in the estimate of an architect or contractor selected by Seller
and reasonably acceptable to Buyer or in the case of a condemnation, the
diminution in the value of the remaining Property as a result of a partial
condemnation is not material (as hereinafter defined) and (b) upon the Closing,
there shall be a credit against the Purchase Price due hereunder equal to the
amount of any insurance proceeds or condemnation awards collected by Seller as a
result of any such damage or destruction or condemnation, plus the amount of any
insurance deductible, less any sums expended by Seller toward the collection of
such proceeds or awards and the restoration or repair of the Property (the
nature of which restoration or repairs, but not the right of Seller to effect
such restoration or repairs, shall be subject to the approval of Buyer, which
approval shall not be unreasonably withheld, conditioned or delayed). If the
proceeds or awards have not been collected as of the Closing, then such proceeds
or awards shall be assigned to Buyer, except to the extent needed to reimburse
Seller for sums expended to collect such proceeds or awards or to repair or
restore the Property, and Seller shall retain the rights to such proceeds and
awards to such extent.
15
Section
5.2 Major
Loss.
If the
cost to repair the damage or destruction as specified above exceeds an amount
equal to Seven Million Dollars ($7,000,000) in the estimate of an architect or
contractor selected by Seller and reasonably acceptable to Buyer or the
diminution in the value of the remaining Property as a result of a condemnation
is material (as hereinafter defined), then Buyer may, at its option to be
exercised within five (5) days of Seller’s notice of the occurrence of the
damage or destruction or the commencement of condemnation proceedings and
receipt of the foregoing estimate, either terminate this Agreement or consummate
the purchase for the full Purchase Price as required by the terms hereof. If
Buyer elects to terminate this Agreement by delivering written notice thereof to
Seller or fails to give Seller notice within such five (5) day period that Buyer
will proceed with the purchase, then this Agreement shall terminate, the Deposit
shall be returned to Buyer and neither party shall have any further rights or
obligations hereunder except as provided in Sections 6.1, 9.3 and 9.9 below. If
Buyer elects to proceed with the purchase, then upon the Closing, there shall be
a credit against the Purchase Price due hereunder equal to the amount of any
insurance proceeds or condemnation awards collected by Seller as a result of any
such damage or destruction or condemnation, plus the amount of any insurance
deductible, less any sums expended by Seller toward the collection of such
proceeds or awards or to restoration or repair of the Property (the nature of
which restoration or repairs, but not the right of Seller to effect such
restoration or repairs, shall be subject to the approval of Buyer, which
approval shall not be unreasonably withheld, conditioned or delayed). If the
proceeds or awards have not been collected as of the Closing, then such proceeds
or awards shall be assigned to Buyer, except to the extent needed to reimburse
Seller for sums expended to collect such proceeds or awards or to repair or
restore the Property, and Seller shall retain the rights to such proceeds and
awards to such extent. A condemnation shall be deemed material if any portion of
any net rentable area of the Property or any parking is taken which would cause
the Property to be in violation of any existing laws or regulations, including
but not limited to, zoning regulations, or the existing access to the Property
is materially and adversely affected, permanently.
ARTICLE
VI
BROKERS
AND EXPENSES
Section
6.1 Brokers.
The
parties represent and warrant to each other that no broker or finder was
instrumental in arranging or bringing about this transaction except for Secured
Capital Corp. (“Seller’s
Broker”). At
Closing, Seller shall pay the commission due, if any, to Seller’s Broker, which
shall be paid pursuant to a separate agreement between Seller and Seller’s
Broker. If any other person brings a claim for a commission or finder’s fee
based upon any contact, dealings or communication with Buyer or Seller, then the
party through whom such person makes his claim shall defend the other party (the
“Indemnified
Party”) from
such claim, and shall indemnify the Indemnified Party and hold the Indemnified
Party harmless from any and all costs, damages, claims, liabilities or expenses
(including without limitation, court costs and reasonable attorneys’ fees and
disbursements) incurred by the Indemnified Party in defending against the claim.
The
16
provisions
of this Section 6.1 shall survive the Closing or, if the purchase and sale is
not consummated, any termination of this Agreement.
Section
6.2 Expenses.
Except as
expressly provided in this Agreement, each party hereto shall pay its own
expenses incurred in connection with this Agreement and the transactions
contemplated hereby.
ARTICLE
VII
EASES
AND OTHER AGREEMENTS
|
Section
7.1 |
Buyer’s
Approval of New Leases and Agreements Affecting the
Property. |
Between
the Effective Date and the Closing, Seller shall continue to lease the Property
in the same manner as before the making of this Agreement, the same as though
Seller were retaining the Property, provided that after the expiration of the
Contingency Period Seller shall not enter into any new Lease or other agreement
affecting the Property, or modify or terminate any existing Lease or other
agreement affecting the Property, which will be binding on the Property after
Closing, except as permitted or required under any Lease and except for
agreements which are terminable on no more than thirty (30) days’ notice without
payment of any penalty or fee or other cost by Seller, without first obtaining
Buyer’s approval of the proposed action, which approval will not be unreasonably
withheld, conditioned or delayed. In such case, Buyer shall specify in detail
the reasons for its disapproval of any such proposed action. If Buyer fails to
give Seller notice of its approval or disapproval of any such proposed action
requiring its approval under this Section 7.1 within three (3) business days
after Seller notifies Buyer of Seller’s desire to take such action, then Buyer
shall be deemed to have given its approval. Buyer agrees to cooperate with
Seller in enabling Seller to complete any such proposed transaction requiring
Buyer’s approval.
Section
7.2 Tenant
Improvement Costs, Leasing Commissions and Concessions.
With
respect to any new Lease or Lease modification entered into by Seller between
the Effective Date and the
Closing Date, and with respect to any renewal or extension of any Lease, whether
through the exercise of an option or otherwise, occurring between such date and
the Closing Date, all tenant improvement work, leasing commissions, legal fees
or other expenses or grants of any free rent period or other concessions shall
be prorated over the term of the lease, renewal or extension, based on the
economic benefit to the parties hereto occurring before or after the Closing.
Seller’s share of such costs shall be based on the portion of economic benefit
of the lease term, renewal or extension, as the case may be, occurring prior to
Closing, which amount shall be a credit against the Purchase Price, and Buyer
shall be responsible for the remainder of such costs. Buyer shall reimburse
Seller at the Closing for all such costs incurred by Seller to the extent Buyer
is obligated therefor pursuant to the provisions hereof. Pursuant to the
Assignment of Leases Buyer shall assume any then outstanding obligations with
respect to such tenant improvements, leasing commissions and concessions. The
provisions of this Section shall survive the Closing.
17
Section
7.3 Tenant
Notices.
At the
Closing, Seller shall furnish Buyer with a signed notice to be given to each
tenant of the Property. The notice shall disclose that the Property has been
sold to Buyer, that, after the Closing, all rents should be paid to Buyer and
that Buyer shall be responsible for all the tenant’s security deposit. The form
of the notice shall be otherwise reasonably acceptable to the parties. Buyer
covenants to deliver said notices to each tenant as soon as reasonably possible
after Closing. This provision shall expressly survive Closing.
Section
7.4 Maintenance
of Improvements and Operation of Property; Removal of Tangible Personal
Property.
Seller
agrees to keep its customary property insurance covering the Property in effect
until the Closing (provided, however, that the terms of any such coverage
maintained in blanket form may be modified as Seller deems necessary as long as
the coverage pertaining to the Property is not materially reduced). Seller shall
operate and manage the Property in a manner consistent with Seller’s practices
in effect prior to the Effective Date, provided that Seller shall in no event be
obligated to make any capital expenditures or repairs, except that Seller shall
make those repairs, in the ordinary course of business pursuant to Seller’s
customary practices, which repairs are first required after the expiration of
the Contingency Period by virtue of events occurring after the expiration of the
Contingency Period, but subject to the terms and conditions of Section 5
above. Seller shall not remove any Tangible Personal Property, except as may be
required for necessary repair or replacement, and replacement shall be of
approximately equal quality and quantity as the removed item of Tangible
Personal Property.
Section
7.5 Service
Contracts.
Within
three (3) business days prior to the expiration of the Contingency Period, Buyer
will advise Seller in writing which Service Contracts Buyer will assume and
which Service Contracts Buyer requests be terminated at Closing, provided Seller
shall have no obligation to terminate, and Buyer shall be obligated to assume,
any Service Contracts which by their terms cannot be terminated without penalty
or payment of a fee or other cost to Seller. Seller shall deliver at Closing
notices of termination of all Service Contracts that are not so assumed and
Buyer shall be responsible for any charges applicable to periods commencing with
the Closing. Notwithstanding the foregoing, Seller shall terminate, as of the
Closing Date, all existing management and leasing agreements with respect to the
Property.
ARTICLE
VIII
CLOSING
AND ESCROW
Section
8.1 Escrow
Instructions.
Upon
execution of this Agreement, the parties hereto shall deposit an executed
counterpart of this Agreement with the Title Company, and this instrument shall
serve as the instructions to the Title Company as the escrow holder for
consummation of the purchase and sale contemplated hereby. Seller and Buyer
agree to execute such reasonable additional and supplementary escrow
instructions as may be appropriate to enable the Title Company to comply
18
with the
terms of this Agreement; provided, however, that in the event of any conflict
between the provisions of this Agreement and any supplementary escrow
instructions, the terms of this Agreement shall control.
Section
8.2 Closing.
The
Closing hereunder shall be held and delivery of all items to be made at the
Closing under the terms of this Agreement shall be made at the offices of the
Title Company or as otherwise mutually agreed on April 4, 2005, and before
10:00 a.m. local time, or such other earlier date and time as Buyer and Seller
may mutually agree upon in writing (the “Closing
Date”).
Except as expressly provided herein, such date and time may not be extended
without the prior written approval of both Seller and Buyer.
Section
8.3 Deposit
of Documents.
(a) At or
before the Closing, Seller shall deposit into escrow the following items:
(1) the duly
executed and acknowledged Deed in the form attached hereto as Exhibit
C
conveying the Real Property to Buyer subject to the Conditions of Title;
(2) four (4)
duly executed counterparts of the ▇▇▇▇ of Sale in the form attached hereto as
Exhibit
D (the
“▇▇▇▇ of Sale”);
(3) four (4)
duly executed counterparts of an Assignment and Assumption of Leases, Service
Contracts, Warranties and Other Intangible Property in the form attached hereto
as Exhibit
E pursuant
to the terms of which Buyer shall assume all of Seller’s obligations under the
Leases, Service Contracts, and other documents and agreements affecting the
Property that accrue or arise on and after the date of the Closing (the
“Assignment
of Leases”);
(4) an
affidavit pursuant to Section 1445(b)(2) of the Code, and on which Buyer is
entitled to rely, that Seller is not a “foreign person” within the meaning of
Section 1445(f)(3) of the Code; and
(5) California
593-C Certificate.
(b) At or
before Closing, Buyer shall deposit into escrow the following items:
(1) immediately
available funds necessary to close this transaction, including, without
limitation, the Purchase Price (less the Deposit and interest thereon net of
investment fees, if any) and funds sufficient to pay Buyer’s closing costs and
share of prorations hereunder;
(2) four (4)
duly executed counterparts of the ▇▇▇▇ of Sale; and
(3) four (4)
duly executed counterparts of the Assignment of Leases.
19
(c) Seller
and Buyer shall each execute and deposit a closing statement, such transfer tax
declarations and such other instruments as are reasonably required by the Title
Company or otherwise required to close the escrow and consummate the acquisition
of the Property in accordance with the terms hereof. Seller and Buyer hereby
designate Title Company as the “Reporting
Person” for the
transaction pursuant to Section 6045(e) of the Code and the regulations
promulgated thereunder and agree to execute such documentation as is reasonably
necessary to effectuate such designation.
(d) Within
five (5) business days after the Closing Date, Seller shall deliver or make
available at the Property to Buyer: originals of the Leases to the extent in
Seller’s possession, or copies of any Leases not in Seller’s possession together
with an affidavit from Seller as to such copies being true and complete copies
of the applicable Lease(s), copies of the tenant correspondence files (for the
three (3) most recent years of Seller’s ownership of the Property only and the
current year), and originals of any other items which Seller was required to
furnish Buyer copies of or make available at the Property pursuant to Sections
2.1(b) or (e) above, to the extent in Seller’s possession, except for Seller’s
general ledger and other internal books or records which shall be retained by
Seller. Seller shall deliver possession of the Property to Buyer as required
hereunder and shall deliver to Buyer or make available at the Property a set of
keys to the Property on the Closing Date.
Section
8.4 Estoppel
Certificates.
(a) If in
accordance with Article II of this Agreement Buyer elects to proceed with the
purchase of the Property, then Seller shall use commercially reasonable efforts
to obtain estoppel certificates from each tenant of the Property substantially
in the form attached hereto as Exhibit
F or, if a
tenant’s lease requires a different form, in the form required by the tenant’s
lease. It shall be a condition to Buyer’s obligation to close the sale and
purchase of the Property that on or before the Closing, Buyer is able to obtain
an estoppel certificate substantially in such form from all Major Tenants and
from other tenants that occupy in the aggregate with the Major Tenants at least
eighty percent (80%) of the rentable area of the Property actually rented to
tenants (collectively, the “Estoppel
Threshold”).
“Major
Tenants” shall
mean all tenants leasing 20,000 or more rentable square feet of space at the
Property. All estoppel certificates shall be dated no more than forty-five (45)
days prior to the Closing Date. If Seller is unable to satisfy the Estoppel
Threshold, Seller may (but is not required to) deliver estoppel certificates
containing the information set forth in Exhibit
F (except
that the statement in Paragraph 9 thereof will be to the best of Seller’s
knowledge, as defined herein) executed by Seller covering such leases as are
sufficient, when aggregated with the tenant estoppel certificates previously
delivered, to satisfy the Estoppel Threshold, provided that Buyer shall not be
obligated to accept Seller estoppel certificates for any Lease for space in
excess of 25,000 rentable square feet or that collectively cover in excess of
15% of the rentable area of the Property actually rented to tenants. Seller’s
representations and warranties in any Seller estoppel certificates will survive
the Closing, subject to the limitations contained in Sections 3.2, 3.3, 9.11 and
9.19 hereof. In the event that Buyer receives an estoppel certificate from a
tenant complying with the requirements of this Section 8.4 and for which Seller
previously delivered its estoppel certificate, Seller shall be automatically
released from any liability or obligation under its estoppel
certificate.
20
(b) If Seller
is unable to obtain and deliver sufficient tenant estoppel certificates as
required under Section 8.4(a), or if the certificates received or substituted
Seller estoppels contain material information or omissions unacceptable to Buyer
in its reasonable discretion and Buyer objects thereto by written notice to
Seller within three (3) business days after receipt by Buyer of the
objectionable estoppel, but in any event on or before the Closing Date, then
Seller will not be in default by reason thereof, and Seller may elect to extend
the Closing Date by up to thirty (30) days in order to satisfy the requirement.
If Seller still cannot satisfy the requirement at the end of such extended
period, then Buyer may, by written notice given to Seller before the Closing,
elect to terminate this Agreement and receive a refund of the Deposit or waive
said condition. If Buyer so elects to terminate this Agreement, neither party
shall have any further rights or obligations hereunder except as provided in
Section 6.1 above and Sections 9.3 and 9.9 below. If no such notice is delivered
by Buyer, Buyer shall be deemed to have waived such condition.
Section
8.5 Prorations.
(a) Rents,
including, without limitation, percentage rents, if any, and any additional
charges and expenses payable under Leases, all as and when actually collected
(whether such collection occurs prior to, on or after the Closing Date) and
other income; real property taxes and assessments; water, sewer and utility
charges; amounts payable under any Service Contracts or other agreements or
documents; annual permits and/or inspection fees (calculated on the basis of the
period covered); and any other expenses of the operation and maintenance of the
Property, shall all be prorated as of 11:59 p.m. on the day immediately prior to
Closing (i.e., Buyer is entitled to the income and responsible for the expenses
of the day of Closing), on the basis of a 365-day year. Buyer shall reimburse
Seller for the tenant improvement costs, leasing commissions, legal fees and
other expenses, and free rent and other concessions, paid by Seller and for
which Buyer is responsible pursuant to Section 7.2.
All rents
collected after the Closing shall be applied and paid as provided in this
Section 8.5(a). Any payment received from a tenant after Closing shall be deemed
a payment of rent due after the Closing until the tenant is current on rents and
sums due under the applicable Lease on or after the Closing, and then such
payments shall be paid to Seller to the extent of any rent or other sums owing
to Seller for periods prior to Closing. Buyer shall use reasonable efforts to
collect such rents and other sums owing to Seller. Seller retains the right to
collect any such rents and other sums from tenants after Closing; provided,
however, that Seller shall have no right to cause any such tenant to be evicted
or to exercise any other landlord remedy against such tenant other than to ▇▇▇
for collection.
Reconciliations
of taxes, insurance charges and other expenses owed by tenants under Leases for
the calendar year (or fiscal year if different from the calendar year) in which
the Closing occurs shall be prepared by Buyer with the cooperation of Seller
within ninety (90) days following the end of such year in accordance with the
requirements set forth in the Leases and as provided in this Section 8.5(a).
The
amount of any cash security deposits held by Seller under Leases shall be
credited against the Purchase Price (and Seller shall be entitled to retain such
cash security deposits). In addition, at Closing, in connection with any tenant
letters of credit which Seller currently holds
21
as
security deposits under the Leases, Seller shall provide to Buyer (i) a transfer
form required by the issuing bank (if applicable) for the transfer of such
letter of credit to Buyer, and (ii) the original letter of credit. Buyer shall
be responsible for any applicable costs associated with any such transfers. If
such letter of credit is not assignable by Seller, Seller shall reasonably
cooperate with Buyer after Closing, provided that Seller shall not be
responsible for incurring any expenses or liabilities, in order to have such
letters of credit replaced with new letters of credit naming Buyer as the named
beneficiary. Seller shall receive credits at Closing for the amount of any
utility or other deposits with respect to the Property as to which Buyer
receives the benefit. Buyer shall cause all utilities to be transferred into
Buyer’s name and account at the time of Closing.
Seller
and Buyer hereby agree that if any of the aforesaid prorations and credits
cannot be calculated accurately on the Closing Date or in the case of rents or
other charges received from tenants, such amounts have not been collected, then
the same shall be calculated as soon as reasonably practicable after the Closing
Date or the date such amounts have been collected, and either party owing the
other party a sum of money based on such subsequent proration(s) or credits
shall pay said sum to the other party within thirty (30) days thereafter. Any
amounts not paid within such thirty (30) day period shall bear interest from the
date actually received by the payor until paid at the greater of (i) the rate of
ten percent (10%) per annum or (ii) the prime rate (or base rate) reported from
time to time in the “Money Rates” column or section of The
Wall Street Journal as being
the base rate on corporate loans at larger United States money center commercial
banks plus two (2) percent. Upon request of either party, the parties shall
provide a detailed and accurate written statement signed by such party
certifying as to the payments received by such party from tenants from and after
Closing and to the manner in which such payments were applied, and shall make
their books and records available for inspection by the other party during
ordinary business hours upon reasonable advance notice.
Seller
retains the right to pursue and control any tax appeals applicable to periods
prior to the Closing, and Buyer shall cooperate with Seller with respect to such
appeals. Any refund of real property taxes or special assessments relating to
the period prior to Closing shall be for the account of Seller. To the extent
Buyer receives any such refund, Buyer shall remit such refund to Seller within
three (3) business days of receipt thereof. If any tenant of the Property is
entitled to any portion of such refund pursuant to the applicable terms of its
Lease, Seller shall remit such amount to such tenant.
(b) Seller
shall be responsible for (i) the title premium for CLTA coverage, (ii) ½ of the
escrow fee, and (iii) all county documentary transfer taxes. Buyer shall be
responsible for (i) the additional title premium for ALTA extended coverage and
any endorsements requested by Buyer, (ii) all costs for any new or updated
survey ordered by Buyer, (iii) ½ of the escrow fee, and (iv) any recording
costs. All other Closing costs shall be allocated between Seller and Buyer in
accordance with the customs of San Diego County, California. The parties will
execute and deliver any required transfer or other similar tax declarations to
the appropriate governmental entity at Closing.
(c) Any
percentage rent for the rental periods including Closing shall be prorated upon
receipt, based upon the tenant’s sales for the portion of the lease year
allocable to Seller’s and Buyer’s respective ownership of the
Property.
22
(d) The
provisions of this Section 8.5 shall survive the Closing.
ARTICLE
IX
MISCELLANEOUS
Section
9.1 Notices.
Any
notices required or permitted to be given hereunder shall be given in writing
and shall be delivered (a) in person, (b) by certified mail, postage prepaid,
return receipt requested, (c) by facsimile with confirmation of receipt, or (d)
by a commercial overnight courier that guarantees next day delivery and provides
a receipt, and such notices shall be addressed as follows:
|
To
Buyer: |
▇▇▇▇▇▇▇
Properties, L.P. |
|
▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ | |
|
▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ | |
|
Attention:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇ Lammas | |
|
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇ and ▇▇▇-▇▇▇-▇▇▇▇ | |
|
Phone
No.: (▇▇▇) ▇▇▇-▇▇▇▇ | |
|
E-mail: ▇▇▇▇.▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇;
▇▇▇▇.▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ | |
|
with
a copy to: |
▇▇▇▇▇▇,
▇▇▇▇▇▇ & ▇▇▇▇▇ LLP |
|
▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ | |
|
▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ | |
|
Attention:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq. | |
|
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇ | |
|
Phone
No.: (▇▇▇) ▇▇▇-▇▇▇▇ | |
|
E-mail:
▇▇▇▇▇▇▇▇@▇▇▇.▇▇▇ | |
|
To
Seller: |
Calwest
Industrial Holdings, LLC |
|
c/o
RREEF America L.L.C. | |
|
▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ | |
|
▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ | |
|
Attention:
▇▇▇▇▇ ▇▇▇▇▇▇▇ | |
|
Fax
No.: (▇▇▇) ▇▇▇-▇▇▇▇ | |
|
Phone
No.: (▇▇▇) ▇▇▇-▇▇▇▇ | |
|
E-mail:
▇▇▇▇▇.▇▇▇▇▇▇▇@▇▇▇▇▇.▇▇▇
|
23
|
with
a copy to: |
Calwest
Industrial Holdings, LLC |
|
c/o
RREEF America L.L.C. | |
|
▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ | |
|
▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇ | |
|
Attention:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ | |
|
Fax
No.: (▇▇▇) ▇▇▇-▇▇▇▇ | |
|
Phone
No.: (▇▇▇) ▇▇▇-▇▇▇▇ | |
|
E-mail:
▇▇▇▇.▇▇▇▇▇▇▇▇@▇▇▇▇▇.▇▇▇
| |
|
with
a copy to: |
Calwest
Industrial Holdings, LLC |
|
c/o
RREEF America L.L.C. | |
|
▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ | |
|
▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ | |
|
Attention:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ | |
|
Fax
No.: (▇▇▇) ▇▇▇-▇▇▇▇ | |
|
Phone
No.: (▇▇▇) ▇▇▇-▇▇▇▇ | |
|
E-mail:
▇▇▇▇▇▇.▇▇▇▇▇▇▇@▇▇▇▇▇.▇▇▇
| |
|
with
a copy to: |
▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP |
|
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ | |
|
▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ | |
|
Attention:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq. | |
|
Fax
No.: (▇▇▇) ▇▇▇-▇▇▇▇ | |
|
Phone
No.: (▇▇▇) ▇▇▇-▇▇▇▇ | |
|
E-mail:
▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇
|
or to
such other address as either party may from time to time specify in writing to
the other party. Any notice or other communication sent as hereinabove provided
shall be effective (a) on the date of delivery, if delivered by hand or
overnight express delivery service; (b) on the date indicated on the return
receipt if mailed; or (c) on the date of transmission, if sent by facsimile. If
any notice mailed is properly addressed but returned for any reason, such notice
shall be deemed to be effective notice and to be given on the date of mailing.
Any notice send by the attorney representing a party, shall qualify as notice
under this Agreement.
Section
9.2 Entire
Agreement.
This
Agreement, together with the Exhibits and schedules hereto, contains all
representations, warranties and covenants made by Buyer and Seller and
constitutes the entire understanding between the parties hereto with respect to
the subject matter hereof. Any prior correspondence, memoranda or agreements are
replaced in total by this Agreement together with the Exhibits and schedules
hereto.
Section
9.3 Entry
and Indemnity.
In
connection with any entry by Buyer, or its agents, employees or contractors onto
the Property, Buyer shall give Seller reasonable advance notice of such entry
and shall conduct such entry and any inspections in connection therewith (a)
during normal business hours, (b) so as to
24
minimize,
to the greatest extent possible, interference with Seller’s business and the
business of Seller’s tenants, (c) in compliance with all applicable laws, and
(d) otherwise in a manner reasonably acceptable to Seller. Without limiting the
foregoing, prior to any entry to perform any on-site testing, including but not
limited to any borings, drillings or samplings, Buyer shall give Seller written
notice thereof, including the identity of the company or persons who will
perform such testing and the proposed scope and methodology of the testing.
Seller shall approve or disapprove, in Seller’s sole discretion, the proposed
testing within three (3) business days after receipt of such notice. If Seller
fails to respond within such three (3) business day period, Seller shall be
deemed to have disapproved the proposed testing. If Buyer or its agents,
employees or contractors take any sample from the Property in connection with
any such approved testing, Buyer shall provide to Seller a portion of such
sample being tested to allow Seller, if it so chooses, to perform its own
testing. Buyer shall permit Seller or its representative to be present to
observe any testing or other inspection or due diligence review performed on or
at the Property. Upon the request of Seller, Buyer shall promptly deliver to
Seller copies of any reports relating to any testing or other inspection of the
Property performed by Buyer or its agents, representatives, employees,
contractors or consultants. Notwithstanding anything to the contrary contained
herein, Buyer shall not contact any governmental authority or any tenant without
first obtaining the prior written consent of Seller thereto in Seller’s sole
discretion with respect to governmental authorities and in Seller’s reasonable
discretion with respect to tenants, and Seller, at Seller’s election, shall be
entitled to have a representative participate in any telephone or other contact
made by Buyer to a governmental authority or tenant and present at any meeting
by Buyer with a governmental authority or tenant, provided, however, that Buyer
may make informational inquiries of governmental officials and representatives
with regards to a Phase I environmental review and preparation and routine
zoning review of the Property and any other matters which do not relate to any
environmental issues (except with respect to the Phase I review and preparation
as set forth above). Buyer shall maintain, and shall assure that its contractors
maintain, public liability and property damage insurance in amounts and in form
and substance adequate to insure against all liability of Buyer and its agents,
employees or contractors, arising out of any entry or inspections of the
Property pursuant to the provisions hereof, and Buyer shall provide Seller with
evidence of such insurance coverage upon request by Seller. Buyer shall
indemnify and hold Seller harmless from and against any costs, damages,
liabilities, losses, expenses, liens or claims (including, without limitation,
court costs and reasonable attorneys’ fees and disbursements) arising out of or
relating to any entry on the Property by Buyer, its agents, employees or
contractors in the course of performing the inspections, testings or inquiries
provided for in this Agreement, including, without limitation, any release of
Hazardous Materials or any damage to the Property; provided that Buyer shall not
be liable to Seller solely as a result of the discovery by Buyer of a
pre-existing condition on the Property to the extent the activities of Buyer,
its agents, representatives, employees, contractors or consultants do not
exacerbate the condition. The provisions of this Section 9.3 shall be in
addition to any access or indemnity agreement previously executed by Buyer in
connection with the Property; provided that in the event of any inconsistency
between this Section 9.3 and such other agreement, the provisions of this
Section 9.3 shall govern. The foregoing indemnity shall survive beyond the
Closing, or, if the sale is not consummated, beyond the termination of this
Agreement.
25
Section
9.4 Time.
Time is
of the essence in the performance of each of the parties’ respective obligations
contained herein.
Section
9.5 Attorneys’
Fees.
If either
party hereto fails to perform any of its obligations under this Agreement or if
any dispute arises between the parties hereto concerning the meaning or
interpretation of any provision of this Agreement, whether prior to or after
Closing, or if any party defaults in payment of its post-Closing financial
obligations under this Agreement, then the defaulting party or the party not
prevailing in such dispute, as the case may be, shall pay any and all costs and
expenses incurred by the other party on account of such default and/or in
enforcing or establishing its rights hereunder, including, without limitation,
court costs and reasonable attorneys’ fees and disbursements.
Section
9.6 Assignment.
Buyer’s
rights and obligations hereunder shall not be assignable without the prior
written consent of Seller in Seller’s sole discretion. Notwithstanding the
foregoing, Buyer shall have the right, without the necessity of obtaining
Seller’s consent but with prior written notice to Seller, to assign its right,
title and interest in and to this Agreement to an entity which is wholly owned
by Buyer at any time before the Closing Date, which entity shall assume all of
Buyer’s obligations hereunder pursuant to an assumption agreement reasonably
approved by Seller. Buyer shall in no event be released from any of its
obligations or liabilities hereunder in connection with any assignment. Without
limiting and notwithstanding the above, in no event shall Buyer have the right
to assign its rights or obligations hereunder to any party which could not make
the representation and warranty contained in subsection 3.5(e) above, and in
connection with any assignment pursuant to the terms hereof, the assignee shall
reconfirm in a written instrument acceptable to Seller and delivered to Seller
prior to the effective date of the assignment said representation and warranty
as applied to the assignee and that all other terms and conditions of this
Agreement shall apply to such assignee. Subject to the provisions of this
Section, this Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors and assigns.
Section
9.7 Counterparts.
This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which taken together shall constitute one and the
same instrument.
Section
9.8 Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of the
State in which the Real Property is located.
26
Section
9.9 Confidentiality
and Return of Documents.
Buyer and
Seller shall each maintain as confidential any and all material obtained about
the other or, in the case of Buyer, about the Property, this Agreement or the
transactions contemplated hereby, and shall not disclose such information to any
third party. Except as may be required by law, Buyer will not divulge any such
information to other persons or entities including, without limitation,
appraisers, real estate brokers, or competitors of Seller. Notwithstanding the
foregoing, Buyer shall have the right to disclose information with respect to
the Property to its officers, directors, employees, attorneys, accountants,
environmental auditors, engineers, potential lenders, and permitted assignees
under this Agreement and other consultants to the extent necessary for Buyer to
evaluate its acquisition of the Property provided that all such persons are told
that such information is confidential and agree (in writing for any third party
engineers, environmental auditors or other consultants) to keep such information
confidential. The provisions of this Section 9.9 shall not restrict Buyer from
disclosures required to comply with federal or state securities laws or other
governmental laws or regulations, provided, however, that in the event that
Buyer believes that it is required to comply with any such laws or regulations,
Buyer shall first deliver to Seller prior written notice of its intent to make
such disclosure. If Buyer acquires the Property from Seller, Seller and Buyer
shall have the right, subsequent to the Closing of such acquisition, to
publicize the transaction (other than the parties to or the specific economics
of the transaction) in whatever manner it deems appropriate; provided that any
press release or other public disclosure regarding this Agreement or the
transactions contemplated herein, and the wording of same, must be approved in
advance by both parties. The provisions of this paragraph shall survive the
Closing or any termination of this Agreement; provided, however, that subject to
the above limitations regarding public press releases, Buyer shall not have the
obligation to keep information regarding the Property confidential after the
Closing. Notwithstanding the foregoing sentence, and except as expressly set
forth in this Section 9.9, in no event shall Buyer disclose the Purchase
Price of the Property, whether before or after Closing. In the event the
transaction contemplated by this Agreement does not close as provided herein,
upon the request of Seller, Buyer shall promptly return to Seller all Due
Diligence Materials and other documents and copies obtained by Buyer in
connection with the purchase of the Property hereunder.
Section
9.10 Interpretation
of Agreement.
The
article, section and other headings of this Agreement are for convenience of
reference only and shall not be construed to affect the meaning of any provision
contained herein. Where the context so requires, the use of the singular shall
include the plural and vice versa and the use of the masculine shall include the
feminine and the neuter. The term “person” shall
include any individual, partnership, joint venture, corporation, trust,
unincorporated association, any other entity and any government or any
department or agency thereof, whether acting in an individual, fiduciary or
other capacity.
Section
9.11 Limited
Liability.
The
obligations of Seller under this Agreement and under all of the Other Documents
are intended to be binding only on Seller and the property of Seller and shall
not be personally
27
binding
upon, nor shall any resort be had to, the private properties of any Seller
Related Parties (other than Seller).
Section
9.12 Amendments.
This
Agreement may be amended or modified only by a written instrument signed by
Buyer and Seller.
Section
9.13 No
Recording.
Neither
this Agreement or any memorandum or short form thereof may be recorded by
Buyer.
Section
9.14 Drafts
Not an Offer to Enter Into a Legally Binding Contract.
The
parties hereto agree that the submission of a draft of this Agreement by one
party to another is not intended by either party to be an offer to enter into a
legally binding contract with respect to the purchase and sale of the Property.
The parties shall be legally bound with respect to the purchase and sale of the
Property pursuant to the terms of this Agreement only if and when the parties
have been able to negotiate all of the terms and provisions of this Agreement in
a manner acceptable to each of the parties in their respective sole discretion,
and both Seller and Buyer have fully executed and delivered to each other a
counterpart of this Agreement (or a copy by facsimile transmission) (the
“Effective
Date”).
Section
9.15 ERISA.
Without
limiting Buyer’s representation and warranty in Section 3.5(e) above, within ten
(10) days after the Effective Date, Buyer shall furnish to Seller all
information regarding Buyer, its affiliates and the shareholders, members,
investors or partners of each of them (excluding any public shareholders) and
any permitted assignees of Buyer hereunder (collectively, the “Buyer
Related Parties”) as
Seller requests in order to enable Seller to determine to Seller’s sole
satisfaction that Buyer’s representation and warranty contained in Section
3.5(e) of this Agreement is true and correct. Buyer represents and warrants and
covenants to Seller that there will not be any change in any such information
regarding Buyer or the Buyer Related Parties prior to or on the Closing. In the
event any such information or change in Seller’s reasonable judgment makes this
transaction a sale to a party-in-interest, Seller may terminate this Agreement
without liability on the part of Seller or Buyer (provided such change did not
occur as a result of a default by Buyer), other than Buyer’s indemnity contained
in Section 9.3 hereof and the obligations of Buyer contained in Sections 6.1 and
9.9 hereof, and the Deposit will be returned to Buyer.
Section
9.16 No
Partnership.
The
relationship of the parties hereto is solely that of Seller and Buyer with
respect to the Property and no joint venture or other partnership exists between
the parties hereto. Neither party has any fiduciary relationship hereunder to
the other.
28
Section
9.17 No
Third Party Beneficiary.
The
provisions of this Agreement are not intended to benefit any third
parties.
Section
9.18 Intentionally
Deleted.
Section
9.19 Limitation
on Liability.
Notwithstanding
anything to the contrary contained herein, after the Closing: (a) the maximum
aggregate liability of Seller, and the maximum aggregate amount which may be
awarded to and collected by Buyer (including, without limitation, for any breach
of any representation, warranty and/or covenant by Seller) under this Agreement
or any documents executed pursuant hereto or in connection herewith, including,
without limitation, the Deed, the ▇▇▇▇ of Sale, the Assignment of Leases and any
Seller estoppel certificate (collectively, the “Other
Documents”), shall
under no circumstances whatsoever exceed Two Million Dollars ($2,000,000); and
(b) no claim by Buyer alleging a breach by Seller of any representation,
warranty and/or covenant of Seller contained herein or in any of the Other
Documents may be made, and Seller shall not be liable for any judgment in any
action based upon any such claim, unless and until such claim, either alone or
together with any other claims by Buyer alleging a breach by Seller of any such
representation, warranty and/or covenant is for an aggregate amount in excess of
One Hundred Thousand Dollars ($100,000) (the “Floor
Amount”), in
which event Seller’s liability respecting any final judgment concerning such
claim or claims shall be for the entire amount thereof, subject to the
limitation set forth in clause (a) above; provided, however, that if any such
final judgment is for an amount that is less than or equal to the Floor Amount,
then Seller shall have no liability with respect thereto. Notwithstanding the
foregoing, the terms and provisions of this Section 9.19 shall not be applicable
to proration matters reconciled post-Closing.
Section
9.20 Survival.
Except as
expressly set forth to the contrary herein, no representations, warranties,
covenants or agreements of Seller contained herein shall survive the
Closing.
Section
9.21 Survival
of Article IX.
The
provisions of this Article IX shall survive the Closing.
[signature
page follows]
29
The
parties hereto have executed this Agreement as of the date set forth in the
first paragraph of this Agreement.
Seller:
|
CALWEST
INDUSTRIAL HOLDINGS, LLC | ||
|
a
Delaware limited liability company | ||
|
By: |
RREEF
America L.L.C. | |
|
a
Delaware limited liability company | ||
|
Its: |
Investment
Manager | |
|
By: |
/s/
▇▇▇▇▇▇ ▇. ▇▇▇▇ | |
|
Name:
▇▇▇▇▇▇ ▇. ▇▇▇▇ | ||
|
Its:
Authorized Representative | ||
Buyer:
|
▇▇▇▇▇▇▇
PROPERTIES, L.P., | ||
|
a
Maryland limited partnership | ||
|
By: |
▇▇▇▇▇▇▇
PROPERTIES, INC., | |
|
a
Maryland corporation | ||
|
Its: |
General
Partner | |
|
By: |
/s/
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ III | |
|
Name:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ III | ||
|
Its:
Chairman and Co-Chief Executive Officer | ||
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