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Exhibit 10.3
PURCHASE AND SALE AGREEMENT AND ESCROW INSTRUCTIONS
THIS PURCHASE AND SALE AGREEMENT ("Agreement"), is made and entered
into this 26th day of March, 1997 by and between BRE PROPERTIES, INC., a
Maryland corporation ("Seller"), and ▇▇▇▇▇▇▇ PACIFIC PROPERTIES, INC., a
California corporation ("Buyer"). This Agreement shall be effective on the
"Effective Date", which is the date on which the last person signing this
Agreement shall have signed this Agreement.
R E C I T A L S:
This Agreement is entered into on the basis of the following facts,
understandings and intentions of the parties:
A. Seller is the owner of the following real properties: that certain
real property located at the intersection of ▇▇▇▇▇ Avenue and Fremont Boulevard
in the City of Fremont in Alameda County, California, commonly known as the
Fremont Hub, and more particularly described in Exhibit A-1 attached hereto (the
"Fremont Property"), that certain real property located at the intersection of
Telephone and Petit Roads in the City and County of Ventura, California,
commonly known as the Central Shopping Center, and more particularly described
in Exhibit A-2 attached hereto (the "Ventura Property"), and that certain real
property located at the intersection of Telegraph and ▇▇▇▇▇▇▇▇▇ Roads in the
City of Santa Fe Springs in Los Angeles County, California, commonly known as
the Santa Fe Springs Plaza, and more particularly described in Exhibit A-3
attached hereto (the "Santa Fe Property") (collectively, these real properties
shall constitute the "Real Property").
B. Buyer desires to purchase all of the Property, defined below, from
Seller and Seller desires to sell all of the Property to Buyer, upon the terms
and conditions stated in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants of the parties
herein contained and other valuable consideration, the parties agree as follows:
1. Sale and Purchase
1.1 Sale of Property. Subject to the terms, covenants and conditions of
this Agreement, Seller shall sell to Buyer, and Buyer shall purchase from
Seller, all of the Property.
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1.2 The Property. In addition to the Real Property, the term "Property"
includes all of the items referred in Sections 1.2.1 - 1.2.4 below.
1.2.1 Improvements and Personal Property. The buildings and all
other improvements, structures, foundation, parking areas, sidewalks, utilities
and fixtures of every kind and nature presently situated on, in or under or
hereafter erected, installed or used in, on or about the Real Property (the
"Improvements"), all furniture and personal property located on or used in
connection with the operation of the Real Property (the "Tangible Personal
Property"), all as-built plans, drawings and specifications for the
Improvements, and all architectural, structural, mechanical, electrical, and
landscaping plans and specifications, surveys, engineering studies and reports
and applicable flood plain maps relating to the Property (collectively, the
"Plans") and all of Seller's right, title and interest in any intangible
personal property now or hereafter owned by Seller or used in connection with
the ownership, use and operation of the Improvements, Real Property or Tangible
Personal Property, including, without limitation, the right to use any trade
name now used in connection with the Improvements, all warranties or guarantees
received by Seller from any contractors, subcontractors, suppliers or
materialmen in connection with any construction, repairs or alterations of the
Improvements, licenses, franchises, permits, tenant lists, advertising materials
and other similar property and rights relating to the ownership, use and
operation of the Improvements, Real Property and Tangible Personal Property
(collectively, "Intangible Property"). The Tangible Personal Property,
Intangible Property, and the Plans shall be collectively referred to as the
"Personal Property".
1.2.2 Rights and Privileges. All rights, privileges, tenements,
hereditaments, rights of way, easements, appendages, appurtenances, mineral
rights, development rights, air rights, and riparian or littoral rights
belonging or in anyway appertaining to the Real Property, and any easements,
rights-of-way or appurtenances used in connection with the beneficial use and
enjoyment of the Real Property.
1.2.3 Contracts and Leases. All of Seller's right, title and
interest in (i) all service, maintenance, construction, management and other
contracts, and all guarantees, warranties, licenses, permits and other documents
affecting the Real Property or the Improvements, which Buyer agrees in writing
to assume (collectively, "Contracts"), and (ii) all leases, tenancy and
occupancy agreements (including, without limitation, all amendments,
modifications, agreements, records, substantive correspondence and other
documents affecting in any way a right to occupy any portion of the Real
Property or Improvements, and all security deposits and prepaid rent and all
lease guaranties) affecting the Property (collectively, "Leases"). The tenants
under the Leases shall be referred to in this Agreement as the "Tenants".
1.2.4 Awards. All right, title and interest of Seller in and to any
condemnation award or other awards now pending or made after Closing, defined
below, by any municipal, county, state or federal authority or board with
respect to the Real Property and Improvements.
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2. Purchase Price
The purchase price (the "Purchase Price") to be paid by Buyer to Seller
for the Property is Sixty-Nine Million Six Hundred Thousand Dollars
($69,600,000.00). The Purchase Price shall be payable, in full, in cash, at
Closing.
3. Deposit
3.1 Deposit. Upon full execution of this Agreement, Buyer shall deliver
to Chicago Title Company, ▇▇▇ ▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ("Title Company")
as escrow agent, the cash sum of Seven Hundred Fifty Thousand Dollars
($750,000.00), as an ▇▇▇▇▇▇▇ money deposit on account of the Purchase Price (the
"Deposit"). If Buyer terminates this Agreement for failure of the conditions
precedent specified under Article 4 below, or by reason of a default by Seller
under any term of this Agreement, then the Deposit shall immediately be returned
to Buyer by Title Company. At Buyer's sole election, any Deposit shall be
deposited by Title Company in an interest-bearing account, in a bank or other
financial institution approved in writing by Buyer, and the term "Deposit" as
used in this Agreement shall include any interest earned thereon. The Deposit
shall be applied to the Purchase Price at Closing. Concurrent with execution of
this Agreement, Seller shall execute irrevocable escrow instructions prepared by
Buyer, instructing Title Company to deliver the Deposit to Buyer immediately
upon receipt by the Title Company of a certificate executed by Buyer stating
that the Deposit is payable to Buyer pursuant to this Agreement.
3.2 Liquidated Damages. THE PARTIES ACKNOWLEDGE THAT IN THE EVENT OF A
MATERIAL DEFAULT BY BUYER OF ITS OBLIGATION TO PURCHASE THE PROPERTY UNDER THIS
AGREEMENT, SELLER'S DAMAGES WOULD BE DIFFICULT OR IMPOSSIBLE TO COMPUTE AND THAT
THE DEPOSIT MADE BY BUYER UNDER SECTION 3.1 REPRESENTS THE REASONABLE ESTIMATE
OF SUCH DAMAGES ESTABLISHED BY THE PARTIES THROUGH GOOD FAITH CONSIDERATION OF
THE FACTS AND CIRCUMSTANCES SURROUNDING THE TRANSACTION CONTEMPLATED UNDER THIS
AGREEMENT AS OF THE EFFECTIVE DATE. IN THE EVENT OF SUCH MATERIAL DEFAULT BY
BUYER UNDER THIS AGREEMENT, SELLER SHALL RETAIN SUCH AMOUNT AS LIQUIDATED
DAMAGES IN LIEU OF ANY OTHER CLAIM SELLER MAY HAVE AT LAW OR IN EQUITY
(INCLUDING, WITHOUT LIMITATION, SPECIFIC PERFORMANCE) ARISING BY REASON OF SUCH
DEFAULT. THE PARTIES HAVE INITIALED THIS SECTION 3.2 TO ESTABLISH THEIR INTENT
SO TO LIQUIDATE DAMAGES.
Seller:_____________; Buyer: _____________.
4. Conditions Precedent
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4.1 General. Buyer's obligation to purchase the Property shall be
subject to the fulfillment of the conditions precedent enumerated in Section 4.2
below within the time limits and in accordance with the procedures set forth in
this Article 4. The provisions of Sections 4.2.2, 4.2.3, 4.2.5, 4.2.6, 4.2.7 and
4.2.8 of this Agreement also constitute covenants by Seller.
4.2 Specific Conditions. The specific conditions precedent shall be as
follows:
4.2.1 Inspection. Buyer shall have approved, by noon on March 24,
1997 ("Due Diligence Expiration Date"), all inspections, tests and analyses of
the Property desired by Buyer, including, without limitation, discussions with
tenants of the Property and representatives of the Cities of Fremont, Ventura
and Santa Fe Springs, and all other local, state and federal agencies,
concerning the Property, and all tests, borings and samplings desired by Buyer
to determine whether any Hazardous Materials, defined below, are present on the
Property.
4.2.2 Title. Buyer shall have reviewed and approved the condition of
title to the Property pursuant to Article 5, and Seller shall be in a position
to fulfill the covenants concerning title set forth in Article 5, including but
not limited to delivery of the Title Policy, defined below.
4.2.3 Execution of Agreements. Seller shall have executed and
delivered to Title Company in accordance with instructions reasonably approved
by Buyer, on or before the Closing Date, the Deed, the Assignment, the
Assignment of Intangibles and the ▇▇▇▇ of Sale, all defined below. Seller shall
have performed and complied in all respects with all of its obligations under
this Agreement which are to be performed or complied with by Seller on or before
the Closing.
4.2.4 Representations and Warranties. All of Seller's
representations and warranties set forth in this Agreement shall be true and
correct in all material respects as of the Closing Date.
4.2.5 Property Documents. Seller shall have delivered or otherwise
made readily available to Buyer for Buyer's approval within twenty-one (21) days
after Seller's full satisfaction of the foregoing obligation, the following:
4.2.5.1 [Intentionally deleted.]
4.2.5.2 General Due Diligence Matters. To the extent in
Seller's possession or control, or the possession or control of
Seller's property manager, copies of all of the documents described in
Exhibit H attached to this Agreement.
4.2.5.3 Contracts. Copies of all Contracts.
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4.2.5.4 Miscellaneous Reports. To the extent in Seller's
possession or control, or the possession or control of Seller's
property manager, the Plans, hazardous material assessments, and
maintenance records for the roof and the major mechanical and
electrical systems of the Improvements.
4.2.5.5 Additional Documents. To the extent in Seller's
possession or control, or the possession or control of Seller's
property manager, all other material documents relating in any way to
the use, ownership or operation of the Property, including, without
limitation, all correspondence to and from Tenants, Seller's
delinquency reports, and Seller's cash receipts journals or ledger
cards indicating the payment history for the Tenants.
4.2.6 Contract Termination. Termination, on or before the Closing Date,
of all Contracts disapproved by Buyer pursuant to Section 4.2.5, and assumption
by Buyer, on the Closing Date, of all Contracts approved by Buyer pursuant to
Section 4.2.5.
4.2.7 Estoppels. Seller's delivery to Buyer and Buyer's approval of
estoppel certificates from each tenant under each Lease in exactly the form
attached to this Agreement as Exhibit B (the "Estoppels"). The Estoppels shall
be dated no earlier than February 18, 1997. In the event that Seller obtains
Estoppels from all tenants under each Lease whose premises contain at least
3,000 square feet of floor area, and from eighty percent (80%) of all remaining
tenants, Seller may delivery its own estoppel regarding the remaining twenty
percent (20%) of the Leases. Notwithstanding anything to the contrary in this
Agreement, Buyer shall have at least ten (10) days to review and accept or
reject any Estoppel delivered to Buyer after March 14, 1997, and shall not be
required to Close until ten (10) days after the approval of all such Estoppels
(including any estoppel supplied by Seller as permitted above).
4.2.8 Subordination Agreements. Seller's delivery to Buyer and Buyer's
approval of Subordination, Non-Disturbance and Attornment Agreements
("Subordination Agreements") from each Tenant under each Lease whose premises
contain at least 3,000 square feet of floor area in exactly the form attached to
this Agreement as Exhibit I. Notwithstanding anything to the contrary in this
Agreement, buyer shall have at least ten (10) days to review and accept or
reject any Subordination Agreement delivered to Buyer after March 14, 1997, and
shall not be required to Close until ten (10) days after the approval of all
such Subordination Agreements.
4.2.8 Subordination Agreements. Seller's delivery to Buyer, not less
than thirty (30) days before the Closing Date, of Subordination, Non-disturbance
and Attornment Agreements ("Subordination Agreements") from each Tenant under
each Lease whose premises contain at least 3,000 square feet of floor area in
exactly the form attached to this Agreement as Exhibit I.
4.2.9 Board of Directors. Buyer shall have obtained, by the Due
Diligence Expiration Date, approval of this Agreement by Buyer's Board of
Directors.
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4.2.10 Damage to Property. The physical condition of the
Property, including without limitation, the HVAC, plumbing and electrical
systems, shall be in the same condition as on the date of this Agreement,
ordinary wear and tear excepted; provided, however, that in the event that prior
to Closing any one of the three properties comprising the Property suffers
damage in excess of $250,000, Buyer shall not be obligated to purchase any of
the properties, whereas in the event that none of the properties comprising the
Property suffers damages in excess of $250,000, Buyer shall be obligated to
acquire the Property, but shall be entitled to full reimbursement from Buyer of
the amounts suffered as a result of such damages, including consequential
damages and lost rents, either through a deduction from the Purchase Price,
assignment of insurance proceeds or other means acceptable to Buyer in its sole
discretion.
4.2.11 Completion of Construction. Except as provided in
Section 6.6, Seller shall have completed all construction of the Property in
accordance with its plans and specifications, complied with all ordinances,
regulations and governmental requirements in connection therewith, satisfied all
governmental proffers made by it or any predecessor, and completed all
improvements required to be completed under the Leases to the satisfaction of
the Tenants or shall credit to Buyer at Closing an amount sufficient to satisfy
such unfulfilled obligations.
4.2.12 Reciprocal Easement Estoppels. Buyer shall have
received all Reciprocal Easement Estoppels, defined below, if any, required by
Section 6.7, which shall have been duly executed and dated not earlier than
fifteen (15) days before the Closing.
4.2.13 No Condemnation. There shall be no pending or
threatened condemnation or taking of any part of the Real Property or any means
of ingress or egress to the Real Property, other than a minor street widening,
or other immaterial taking, which, in Buyer's judgment, does not adversely
affect the Real Property.
4.2.14 Concurrent Closing. On the Closing Date, Buyer shall
purchase and Seller shall sell all those certain real properties constituting
the Real Property together with all their Improvements and Personal Property
situated, erected, installed, located or used thereon.
4.3 Time For Fulfillment. Seller shall cooperate with Buyer and Buyer's
efforts to fulfill the conditions precedent set forth in Section 4.2. Buyer
shall diligently attempt in good faith to fulfill the conditions precedent set
forth in Section 4.2 above within the time periods set forth in Section 4.2. If
any of the conditions precedent have not been fulfilled within the applicable
period, Buyer shall have the right to terminate this Agreement by written notice
to Seller given on or before the date specified in Section 4.2 for satisfaction
of such condition precedent. If Buyer has not either given written notice of
fulfillment or waived in writing fulfillment of the applicable condition
precedent on or before the date specified in Section 4.2 for satisfaction of
such condition precedent, then this Agreement shall terminate, the Deposit shall
immediately be returned to Buyer and neither Seller nor Buyer shall have any
further obligations under this Agreement. In approving the items set forth in
Section 4.2, Buyer shall have the right to approve such matters within its sole
and absolute discretion; provided that Buyer's notice to Seller that it has
elected to proceed with the purchase, given on or before the last date specified
in Section 4.2
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for satisfaction of the conditions precedent, shall be deemed an acceptance of
all such matters; provided, however, that if any Estoppels or Subordination
Agreements are not received prior to the Due Diligence Expiration Date, Buyer
shall be entitled to make its decision as to whether to proceed with the
consummation of the contemplated transaction conditioned upon its timely receipt
of any missing Estoppels or Subordination Agreements; and provided further that
if any other documents or information to have been provided to Buyer by Seller
are delivered after the Effective Date, the Due Diligence Expiration Date shall
be extended by such reasonable period of time as Buyer and Seller agree is
necessary to evaluate such documents or information.
4.4 [Intentionally deleted.]
4.5 Right of Entry; Indemnification. Seller shall allow Buyer (and its
authorized representatives and agents) reasonable access to the Property at any
reasonable time, to the documents, permits and agreements maintained in
connection therewith, and to all Tenants and governmental authorities connected
therewith, for the purpose of making such appraisals, examination, tests,
analyses, investigations, borings, surveys, inquiries, building permit
applications, conditional use permit applications, applications for other
entitlements, or other inspections as may be required or necessary, at Buyer's
election, in connection with fulfillment of the conditions precedent set forth
in Section 4.2. Seller acknowledges that Buyer is a publicly traded company and
is obligated to comply with the rules and regulations of the Security and
Exchange Commission. Seller agrees during Buyer's investigation period, at no
expense to Seller, to cooperate with Buyer and/or Buyer's auditors (i) by
providing financial data pertaining to the Property required by the Securities
and Exchange Commission, including each of the documents listed on Exhibit J-1
(but without requiring duplication of any of the documents listed in Exhibit H
which are delivered or otherwise made available to Buyer pursuant to Section
4.2.5 above), and (ii) by delivering a certificate to Buyer's auditors in the
form of Exhibit J-2. Buyer shall indemnify, defend and hold Seller harmless from
any and all loss, cost, damage, injury, claim, liability or expense arising out
of claims of injury to or death of persons, damage to property, or claims of
lien for work or labor performed, materials or supplies furnished as a result of
the exercise of Buyer's right of entry hereunder.
4.6. Consideration. Notwithstanding anything in this Agreement to the
contrary, to induce Buyer to enter into this Agreement and to expend the time
and resources necessary to evaluate the Property and possibly forego other
opportunities while doing so, Seller hereby grants to Buyer certain express
rights to terminate this Agreement as specifically provided in this Agreement.
Such expenditures of time and resources and possible loss of opportunity by
Buyer constitute adequate consideration for Seller's remaining bound by this
Agreement notwithstanding such termination rights in Buyer.
5. Conditions of Title
5.1 Property.
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5.1.1 Conditions of Title. Title to the Real Property and the
Improvements shall be conveyed from Seller to Buyer by a separate grant deed in
fee simple absolute for each of the Fremont Property, the Ventura Property and
Santa Fe Property (collectively, the "Deed"), in the forms attached to this
Agreement as Exhibits F-1, F-2, F-3, subject to no exceptions to title of any
kind or character other than: (i) a lien to secure payment of real estate taxes
and assessments not delinquent; and (ii) exceptions which are approved by Buyer
in writing as provided below. The foregoing exceptions to title are referred to
in the aggregate as the "Conditions of Title".
5.1.2 Title Procedure. Prior to full execution of this
Agreement: (i) Buyer shall have caused Title Company to prepare and issue to
Buyer a preliminary title report, evidencing the current condition of title to
the Property, including all matters shown by an ALTA survey of the Real Property
and the Improvements, prepared for Buyer and Buyer's designees, showing all
boundaries, improvements, utility locations and sizes, easements and
encroachments on the Property ( the "Survey"); and (ii) Buyer shall commission
the Survey. Buyer shall promptly review the preliminary title report and Survey
and shall notify Seller in writing on or before ten (10) days after Buyer's
receipt of the preliminary title report and Survey, and copies of all exceptions
described in such preliminary title report, of any exceptions to title noted
thereon which are unacceptable to Buyer. Seller shall, at Seller's sole cost and
expense, before Closing, cause removal of all monetary title exceptions,
including, but not limited to, deeds of trust, and mechanic's and other liens.
Unless, within ten (10) days of Seller's receipt of Buyer's disapproval of any
non-monetary title exception, Seller advises Buyer in writing that Seller
intends to cure such disapproved title exception before Closing, taking such
action, at Seller's sole cost and expense, as may be necessary so to do (a "Cure
Notice"), Seller shall not cause removal of such disapproved exceptions from
title. If Seller does not deliver a Cure Notice to Buyer, then at Buyer's sole
election, to be made within ten (10) days of Buyer's delivery of its objection
to the title exceptions, either (i) this Agreement shall automatically terminate
as provided in Section 4.3, or (ii) Buyer shall agree to purchase the Property
subject to the disapproved title exception(s). If Seller does not remove or
provide to the satisfaction of Buyer for removal of monetary exceptions to title
or the exceptions set forth in the Cure Notice before Closing, Buyer shall have
the right (i) to terminate this Agreement as provided in Section 4.3, (ii) to
proceed with consummation of this transaction notwithstanding such objectionable
items, or (iii) to exercise any of Buyer's rights or remedies at law or in
equity arising out of Seller's breach of its covenant to convey title.
5.1.3 Title Policy. Conclusive evidence of delivery of title
in accordance with the foregoing shall be the willingness of Title Company to
issue, upon payment of its regularly scheduled premium, its owner's extended
ALTA Form 1970(B) coverage policy of title insurance for each of the real
properties comprising the Real Property, with the endorsements described below,
excluding all bankruptcy exceptions, in the amount of the Purchase Price,
showing title to each of the real properties comprising the Property vested of
record in Buyer or its assignee, subject to no exceptions, conditions,
easements, reservations or encumbrances of any kind or character, other than the
Conditions of Title (collectively, the "Title Policy"). The Title Policy
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shall provide full coverage against mechanics' and materialmen's liens and shall
contain the following endorsements: (i) a contiguity endorsement insuring that
each of the parcels constituting each of the real properties comprising the
Property is fully contiguous to the immediately adjacent parcel, (ii) a
subdivision map act endorsement insuring that each of the parcels constituting
each of the real properties comprising the Property may be transferred
individually by Buyer, (iii) an owner's CLTA 100 and 101.4 endorsement, (iv) a
103.3 endorsement with respect to any easements that are subject to
encroachments, and (v) CLTA endorsements 103.7, 116 and 116.1. The Title Policy
shall also affirmatively insure any reciprocal easement agreement encumbering
each of the real properties comprising the Property.
5.2 Personal Property. The Personal Property shall be conveyed to Buyer
by three bills of sale (collectively, the "▇▇▇▇ of Sale") in the form attached
to this Agreement as ▇▇▇▇▇▇▇▇ ▇-▇, ▇-▇, ▇-▇, free of all security interests,
liens and encumbrances.
5.3 Leases. The Leases shall be assigned to Buyer by three assignment
of leases (collectively, the "Assignment") in the forms attached to this
Agreement as Exhibits ▇-▇, ▇-▇, ▇-▇,, free of all security interests, liens and
encumbrances.
5.4 Contracts. The Contracts and certain intangible property shall be
assigned to Buyer by three instruments of assignment (collectively, the
"Assignment of Intangibles") in the forms attached to this Agreement as Exhibits
E-1, E-2, E-3.
6. Seller's Covenants From and after the Effective Date, Seller agrees
with Buyer as follows:
6.1. Estoppel Certificates and Subordination Agreements. Not
later than five (5) days after the Effective Date, Seller shall request all
Tenants in the Property to provide Estoppels and Subordination Agreements to
Buyer in order to satisfy the condition to Buyer's obligation to close set forth
in Sections 4.2.7 and 4.2.8. Thereafter, Seller shall use its best efforts to
obtain all of the Estoppels and Subordination Agreements at the earliest
possible date. Simultaneously with submitting the Estoppels and Subordination
Agreements to the Tenants, Seller shall furnish copies of the Estoppels and
Subordination Agreements to Buyer. Seller shall promptly deliver to Buyer from
time to time all Estoppels and Subordination Agreements which were returned to
Seller.
6.2. Completion of Construction. Seller shall either (i) at
Seller's sole cost and expense, complete all construction of the Property in
accordance with its plans and specifications, comply with all ordinances,
regulations and governmental requirements in connection therewith, satisfy all
governmental proffers made by it or any predecessor, and complete all
improvements required to be completed under the Leases to the satisfaction of
the
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Tenants; or (ii) agree to a holdback in escrow of funds from the Purchase Price
sufficient to complete such improvements.
6.3. [Intentionally deleted]
6.4. Operation of Property. Seller agrees that:
6.4.1. Ordinary Operation. Seller shall manage and
operate the Property in the ordinary and usual manner and use best efforts to
keep available the services of its present employees and preserve its relations
with all Tenants, suppliers and others having business dealings with it.
6.4.2. Maintenance. Seller shall maintain the
Property in its present order and condition and make all necessary repairs and
replacements consistent with a reasonably prudent maintenance and repair program
followed by owners of similar property in the vicinity of the Property, and
shall deliver the Property on the date of Closing free of all active roof leaks,
parking lot repairs requiring immediate attention and otherwise in substantially
the same condition it is in on the date of this Agreement, reasonable wear and
tear excepted. Without limiting the foregoing, no fixtures, equipment, or other
tangible Personal Property shall be removed from the Property unless prior to
Closing the same are replaced with similar items of at least equal quality and
value.
6.4.3. Labor. Seller shall not make any commitment or
incur any liability to any labor union, through negotiations or otherwise.
6.4.4. Permits. Seller shall keep in effect all
building permits, certificates of occupancy, licenses, conditional use permits
and other specific entitlements and approvals issued with respect to the
Property by any applicable public authority and required for the continued use
and operation of the Improvements, and shall undertake in a timely manner all
actions necessary to extend and/or renew the same.
6.5. Liens. Seller shall keep the Property free and clear of
all liens, claims or demands, including, but not limited to, mechanics' liens,
in connection with work performed and materials provided before the Closing, and
if any such lien is filed or levied, Seller shall secure its release within ten
(10) days after it is notified of the filing or levy. Seller shall not cause or
allow any encumbrance, lien, mortgage, deed of trust or similar financial lien
(whether or not recorded) to be placed against the Property without the prior
written consent of Buyer.
6.6. Leases. Without Buyer's prior written consent, which may
not be unreasonably withheld, Seller shall not enter into a Lease, amend or
extend any Lease, or accept any rent from any Tenant more than one month in
advance of its due date. Notwithstanding the foregoing, Buyer may
unconditionally withhold its consent to the termination or cancellation of
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any Lease or to Seller's acceptance of the surrender of a Tenant's premises
prior to the Closing Date. If Buyer and Seller agree to the execution of any new
Lease of any leasable vacant unit which involves concessions, commissions, or
the construction of tenant improvements, any costs relating to such Lease shall
be allocated to Buyer at Closing.
6.7. Reciprocal Easements. If there are any reciprocal
easement agreements or similar agreements affecting the Property and adjoining
property or properties, Seller agrees to obtain from the owner(s) of such
adjacent property or properties a statement (the "Reciprocal Easement Estoppel")
reasonably satisfactory to Buyer that there are no defaults by Seller thereunder
and that the easements are in full force and effect.
6.8. New Contracts. Without Buyer's prior written consent,
Seller shall not become a party to any new Contracts that will be the obligation
of Buyer on or after the Closing with respect to all or any portion of the
Property.
6.9. Tax Proceedings. Seller shall not withdraw, settle or
otherwise compromise any protest or reduction proceeding affecting real estate
taxes assessed against the Property for any fiscal period in which Closing is to
occur or any subsequent fiscal period without the prior written consent of
Buyer, which consent shall not be unreasonably withheld. Real estate tax refunds
and credits received after the Closing Date ("Refunds") shall be paid to Buyer
and shall be apportioned and distributed as follows. Buyer shall first determine
whether any Tenant has the right to receive any portion of any Refunds. After
payment to any Tenants of any applicable portion of the Refunds, Buyer shall pay
to Seller any portion of any Refunds which are attributable to a fiscal tax year
before the Closing Date. Buyer shall then equitably apportion between Buyer and
Seller any Refunds which are attributable to the fiscal tax year during which
the Closing Date occurs. Buyer shall have the absolute right to retain any
Refunds which are attributable to any fiscal tax year after the Closing Date.
6.10. Copies of Notices. Promptly upon receipt, Seller shall
provide Buyer with copies of all material notices and correspondence received
from any Tenant under the Leases, and notices and correspondence received from
any insurance company which carries insurance on the Property or Board of Fire
Underwriters, or from any governmental authority.
6.11. Prohibition on Marketing. Seller shall withdraw the
Property from the market and refrain from offering the Property for sale to any
other party and terminate all negotiations for any such sale with any party
other than Buyer; provided that Seller shall be entitled to keep Developers'
Diversified Realty and Summit Commercial informed as to the status, but not the
terms, of this transaction.
6.12. Personal Property. Seller shall not alter or remove any
Personal Property from the Real Property unless the same is replaced with
Personal Property of the same or similar quality and quantity.
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7. Representations and Warranties of Seller
7.1 Representations and Warranties. Seller covenants, represents and
warrants to Buyer that:
7.1.1 Copies of Documents and Records. Seller has or shall, in
accordance with Section 4.2.5, provide Buyer with, or make available to Buyer,
true, complete and correct copies of all executed documents, plans,
specifications, reports, warranties, governmental consents, permits and
approvals, Leases, Contracts, and all other agreements entered into by Seller or
outstanding with respect to the Property which are in Seller's possession or
control. Buyer acknowledges Seller has provided Buyer copies of only a portion
of the plans in Seller's possession, but has provided Buyer access to all such
plans. Seller shall deliver all such plans to Buyer at Closing.
7.1.2 Leases. There are and will be no oral or written
agreements with respect to any Lease allowing the tenant any reduction,
abatement, concession, allowance or subsidy of rent under its Lease or allowing
the payment of any portion of the rent in any form other than in cash except as
may be fully noted on the rent roll delivered to Buyer; and no rentals or other
payments for periods in excess of one month have been received under any Lease
except as reflected on the rent roll. Seller is not in violation of any Lease.
There is no prohibition set forth in any Lease with respect to the landlord's
assignment of such Lease; subject to the provisions of Section 6.2, all
painting, repairs, alterations, and other work to be performed by the landlord
under each Lease has been fully performed by the Landlord under each Lease and
has been fully paid or will be fully performed and paid on or before the Closing
Date; and no brokerage or leasing commission or other compensation will be due
and payable to any person, firm, corporation or other entity with respect to or
on account of any such Lease (Seller shall fully pay any such commissions or
compensation as they come due and Seller shall indemnify, defend and hold Buyer
harmless from any and all such commissions or compensation).
7.1.3 Service Contracts. No portion of the Property shall be
subject to any Contract after the Closing Date except for those Contracts
approved by Buyer in writing pursuant to Section 4.2.5 of this Agreement. All
Contracts are valid and in full force and effect and unmodified, and (i) no
party has breached any material condition or provision of any Contract, (ii) no
party is in default in any material respect under the terms of any Contract, and
(iii) no event has occurred which with the giving of notice or the passage of
time, or both, would constitute a material default.
7.1.4 Hazardous Substances. Except as disclosed in written
materials and environmental reports previously provided by Seller to Buyer, to
Seller's actual knowledge, no governmental authority has notified Seller of the
need to take corrective action regarding elimination or control of Hazardous
Materials, defined below, on or about the Property. To Seller's actual
knowledge, neither Seller nor any other tenant, occupant or user of the Property
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used, generated, manufactured, installed, released, discharged, stored or
disposed of any Hazardous Materials on, under, in or about the Property, or
transported any Hazardous Materials to or from the Property, and there are no
Hazardous Materials (other than Hazardous Materials lawfully held for retail
sale or used in the normal maintenance and cleaning of the Property, provided
such items are being sold, stored, disposed of, transported and otherwise
handled in compliance with all laws) or underground storage tanks located on,
under, in or about the Property. The term "Hazardous Materials" shall mean any
substance, material or waste which is regulated by any local governmental
authority, the State of California, or the United States Government, including,
but not limited to, any material or substance which is (i) petroleum, (ii)
asbestos, (iii) polychlorinated biphenyls, (iv) designated as a "hazardous
substance" pursuant to Section 311 of the Clean Water Act, 33 U.S.C. 1251 et
seq. (33 U.S.C. 1321) or listed pursuant to Section 307 of the Clean Water Act
(33 U.S.C. 1317), (v) defined as a "hazardous waste" pursuant to Section 1004 of
the Resource Conservation and Recovery Act, 42 U.S.C. 6901 et seq. (42 U.S.C.
6903) or (vi) defined as a "hazardous substance" pursuant to Section 101 of the
Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C.
9601 et seq. (42 U.S.C. 9601).
7.1.5 Legal Actions. Except as disclosed in written materials
and reports previously provided by Seller to Buyer, to Seller's actual knowledge
there are no condemnation, environmental, zoning or other land-use regulation
proceedings, either instituted, or planned to be instituted, or any other
litigation, actions, suits or proceedings pending or threatened which would
affect the use, occupancy or operation of the Property for its intended purpose
or Seller's ability to perform hereunder or the value of the Property, nor has
Seller received notice of any pending or threatened special assessment
proceedings affecting the Property. In addition, Seller warrants, to Seller's
actual knowledge, no violations of zoning ordinances or building codes exist on
the Property.
7.1.6 Documents. All the documents executed by Seller which
are to be delivered to Buyer at the Closing are and at the time of Closing will
be duly authorized, executed, and delivered by Seller.
7.1.7 Flood and Earthquake Zones. To Seller's actual
knowledge, no portion of the Property is located within the flood plain, mud
slide or flood hazard, earthquake zone or any special studies zone, as
designated on any map prepared or issued for such purpose by any governmental
authority.
7.1.8 Taxes. All employee, business, sales, rent or other
occupancy taxes due with respect to the Property through the Closing Date have
been or will be paid by Seller.
7.1.9 Other Rights. No person, firm or entity has any right to
acquire or lease all or any part of the Property, other than the rights of the
Tenants under the Leases approved by Buyer to lease portions of the Property
pursuant to the terms of such Leases.
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7.1.10 Accuracy of Information. Seller has furnished Buyer
with access to or true and complete copies of all financial statements,
operating summaries, and supporting ledgers and journals relating to the
Property, the Leases and Contracts and all other agreements or instruments
affecting in any way (i) the operation of the business of the Property, or (ii)
the value of the Property, or in any way relating to the Property provided that
Seller shall not be obligated to provide Buyer with any of its internal
determinations of fair market value of the Property. No representation or
warranty of Seller in this Agreement, or any information, statement or
certificate furnished or to be furnished by or on behalf of Seller pursuant to
this Agreement or in connection with the transactions contemplated hereby,
contains or shall contain any untrue statement of a material fact or omits or
shall omit to state a material fact necessary to make the statements contained
therein not misleading. All copies of contracts, agreements and other documents
delivered by Seller in connection with the transactions contemplated hereby are
complete and accurate, and have not been amended or modified by any oral
agreements.
7.1.11 Government Reports and Returns. Seller has filed in a
timely manner all reports and returns relating to the Property required to be
filed by any applicable law or governmental regulation.
7.1.12 Permits. To Seller's actual knowledge, Seller has
obtained all consents, approvals, entitlements, waivers, certificates of
occupancy, licenses, and building permits, conditional use permits and other
approvals required in connection with Seller's ownership of the Property and the
operation of the Property as heretofore conducted by Seller, all of which are in
full force and effect. To Seller's actual knowledge, valid and final
certificates of occupancy, or their equivalent, have been issued for each space
in the Improvements by the City or County Building Department, and no space has
been leased in violation of any such certificates. To Seller's actual knowledge,
the Real Property is presently zoned for the buildings, businesses and parking
included in the Property. There is no pending or proposed change in the zoning
classification of the Property.
7.1.13 Employees. Seller has no knowledge of any labor
grievances, picketing, or similar overt labor problems pending in connection
with the Property.
7.1.14 Compliance with Laws. To Seller's actual knowledge, in
connection with the conduct of the business of the Property, Seller has complied
in all material respects with all applicable laws, ordinances, rules and
regulations (including without limitation those relating to zoning and the
requirements of Title III of the Americans with Disabilities Act of 1990 (42
U.S.C. 12181, et seq., The Provisions Governing Public Accommodations and
Services Operated by Private Entities), and all regulations promulgated
thereunder, and all amendments, revisions or modifications thereto), and Seller
has not been informed of a violation of any such laws, rules or regulations.
Seller has no notice or knowledge that any government agency or any employee or
official considers the construction of the Property or its operation or use to
have failed to comply with any law, ordinance, regulation or order or that any
investigation has been
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commenced or is contemplated respecting any such possible failure of compliance.
There are no unsatisfied requirements for repairs, restorations or improvements
from any person, entity or authority, including, but not limited to, any tenant,
lender, insurance carrier or governmental authority. All driveway entrances and
exits to the Real Property are permanent and no special access or other permits
are required to maintain same. All existing streets and other improvements,
including water lines, sewer lines, sidewalks, curbing and streets at the Real
Property have been paid for and either enter the Real Property through adjoining
public streets, or, if they enter through adjoining private lands, do so in
accordance with valid, irrevocable easements running to the benefit of the owner
of the Property. Seller has not received from any insurance company or Board of
Fire Underwriters any notice, which remains uncured, of any defect or inadequacy
in connection with the Property or its operation.
7.1.15 Non-Foreign Person. Seller is not a "foreign person" as
such term is defined in Section 1445(f) of the Internal Revenue Code of 1986, as
amended, and Seller is not subject to withholding under Section 26131 of the
California Revenue and Taxation Code.
7.1.16 Physical Condition. To Seller's actual knowledge, there
are no material defects in the Improvements, including, without limitation, the
structure or roof of the Improvements. To Seller's actual knowledge, the
Improvements and tangible Personal Property (including without limitation
plumbing equipment, HVAC, electric wiring and fixtures, gas distribution system,
and water and sewage systems presently on or in the Property) are in good
working order and condition.
7.1.17 Mechanic's Liens. All bills and claims for labor
performed and materials furnished to or for the benefit of the Property have
been paid in full, and there are no mechanic's, or materialmen's liens (whether
or not perfected) on or affecting the Property.
7.1.18 Seller's Authority. Seller has been duly authorized to
execute and perform its obligations under this Agreement. The persons signing
this Agreement on behalf of Seller have the power and authority to do so and to
bind Seller to this Agreement. All the instruments, agreements and other
documents executed by Seller which are to be delivered to Buyer at the Closing
are and at the time of the Closing will be duly authorized, executed and
delivered by Seller. This Agreement and all documents executed by Seller that
are to be delivered to Buyer at Closing are, or at the time of Closing will be,
legal, valid and binding obligations of Seller, and do not, and at the time of
Closing will not, violate any provisions of any agreement or judicial order to
which Seller is a party or to which Seller or the Property is subject.
7.1.19 Bankruptcy. Neither Seller nor any Tenant has either
filed or been the subject of any filing of a petition under any federal or state
bankruptcy or insolvency laws.
7.2 Warranty of Performance. Seller shall promptly disclose to Buyer,
before the
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Closing Date, in writing (a "Warranty Disclosure"), any fact or circumstance
known to or subsequently learned by Seller which would make any such warranty or
representation untrue, or which, without such disclosure, makes any such
warranty or representation misleading. Buyer shall have until the later of
fifteen (15) days after the Effective Date or five (5) business days after the
receipt of a Warranty Disclosure to either approve or disapprove such Warranty
Disclosure. If Buyer either disapproves such Warranty Disclosure within such
period, or fails to approve or disapprove such Warranty Disclosure within such
period, then this Agreement shall automatically terminate, the Deposit shall
immediately be returned to Buyer, and Buyer and Seller shall have no further
obligations under this Agreement. Subject to the provisions of this Section 7.2
and Section 7.3, Seller shall indemnify, defend and hold Buyer harmless from any
and all loss, damage, injury, cost or expense (including without limitation
reasonable attorney's fees) arising out of or relating directly or indirectly to
any breach of the foregoing obligation or any other obligation under this
Article 7.
7.3 Limitations of Representations and Warranties. The parties
acknowledge that Buyer is performing its own due diligence and investigations
regarding the Property. Except as specifically set forth in this Agreement,
Seller has made no representations or warranties to Buyer regarding the physical
or economic condition of the Property, or otherwise, it being understood that
the Property is being sold to Buyer as-is.
7.4 Actual Knowledge. The term "actual knowledge" as used in this
Article 7 means the actual knowledge of ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇ Fall.
8. Closing
8.1 Closing. The sale and purchase transaction contemplated by this
Agreement ("Closing") shall be consummated through escrow established at Title
Company ten (10) days after the Due Diligence Expiration Date, or such earlier
date as Buyer may specify on five (5) days' prior written notice to Seller
("Closing Date").
8.2 Instruments Delivered by Seller at Closing. At Closing, Seller
shall deliver or cause to be delivered to Buyer, at Seller's sole cost and
expense, each of the following items:
8.2.1 Deed. The Deed, duly executed and acknowledged by
Seller, except that the amount of any transfer tax shall not be shown on the
Deed, but shall be set forth on a separate affidavit or instrument, which after
recordation of the Deed, shall be attached to the Deed so that the amount of
such transfer tax is not of record.
8.2.2 Leases. The Assignment, duly executed and acknowledged
by Seller.
8.2.3 ▇▇▇▇ of Sale and Intangibles. The ▇▇▇▇ of Sale and
Assignment of Intangibles, both duly executed by Seller.
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8.2.4 Keys and Documents. All keys to all locks on the
Property (to the extent that such are available) and an accounting for keys in
possession of others. Copies of all books and records pertaining to the Property
(but expressly excluding information tax returns of Seller) and originals of all
documents in the possession or control of the Seller pertaining to the Tenants,
including, without limitation, all applications, correspondence and credit
reports relating to each such Tenant.
8.2.5 Permits. To the extent in Seller's possession or
control, the necessary permits issued by the appropriate governmental
authorities and utility companies when the Improvements were completed, a
complete set of all architectural, structural, mechanical and electrical plans
and specifications used in the construction of the Improvements including,
without limitation, the Plans and site surveys, and all of the documents
described in Section 4.2.5 of this Agreement.
8.2.6 Leases. Executed originals of all Leases and Contracts.
8.2.7 Deposits. All damage, escrow and security deposits and
advance rental deposits held by Seller under the Leases.
8.2.8 Letter. A separate letter addressed to each tenant under
the Leases, executed by Seller, advising the Tenants of the sale of the Property
to Buyer and directing that rents and other payments thereafter be sent or
delivered to Buyer, which letter may be delivered by Buyer to the Tenants or
posted in a conspicuous place in the Improvements.
8.2.9 Other Instruments. Such other duly executed and/or
acknowledged instruments as may be reasonably required to consummate this
transaction in accordance with the terms and conditions contained in this
Agreement, such as appropriate escrow instructions to Title Company and the
documents described in Section 7.1.15 of this Agreement.
8.3 Items to be Delivered by Buyer at Closing. At Closing, Buyer shall
execute and/or deliver to Seller the following items:
8.3.1 Cash. Except as provided in Section 6.6, the applicable
cash portion of the Purchase Price, and Buyer's share of any closing costs or
prorations, minus the cost, if any, of incomplete tenant improvements, rent
abatements and other tenant concessions and the cost of unpaid commissions.
8.3.2 Documents. The Assignment and Assignment of Intangibles,
duly executed and acknowledged by Buyer.
8.3.3 Other Instruments. Such other documents and instruments,
duly executed and/or acknowledged, as may be reasonably required, in order to
consummate this transaction in
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accordance with the terms and conditions of this Agreement, such as appropriate
escrow instructions to Title Company.
8.4 Adjustment and Proration. At Closing the following items shall be
adjusted and prorated between Seller and Buyer on the basis of the actual number
of days in the month of Closing:
8.4.1 Rents. Seller shall pay to Buyer in cash the amount of
any rents received by Seller from the Tenants and applicable to any period of
time from and after the Closing Date. If any tenant is in arrears in the payment
of rent on the Closing Date, rents received by Buyer from such tenant after the
Closing Date shall be applied in the following order of priority:
8.4.1.1 First, to the costs of collection, if any,
incurred in collecting such rent;
8.4.1.2 Then to rent due for the current period;
8.4.1.3 Then to any month or months following the
Closing Date for which any amounts are due at the time of receipt of such rent
payment;
8.4.1.4 Then to the month in which the Closing
occurred; and
8.4.1.5 Then to any month or months preceding the
month in which the Closing occurred; provided, however, that Seller shall have
the right to pursue independently (without initiating an unlawful detainer
proceeding), for its own account, any tenant for payment of rent for any month
preceding the month in which Closing occurs.
8.4.2 Taxes. Real and personal property taxes and assessments
upon the Property for the current calendar or fiscal year shall be prorated as
of the Closing Date.
8.4.3 Utilities and Contracts. All costs, if any, of utilities
furnished to the Property and all payments under any Contracts approved in
writing by Buyer shall be prorated at Closing.
8.4.4 Credits to Buyer. Except as provided in Section 6.6,
Buyer shall be entitled to a credit against the Purchase Price for any unpaid
commissions, costs or allowances due after the Closing but incurred in
connection with any Lease executed on or before the Closing Date, including any
such commissions, costs or allowances due in connection with any option or
extended term under any such Lease. Buyer shall also be entitled to a credit
against the Purchase Price for any free rent, abatements, or other unexpired
concessions under any Leases executed on or before the Closing Date to the
extent they apply to any period after the Closing Date, including any such free
rent, abatements or other unexpired concessions due in connection with
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any option or extended term under any such Lease.
8.5 Possession. Sole and exclusive possession of the Property shall be
delivered to Buyer by Seller at the Closing.
8.6 Closing Costs. At Closing, Seller shall pay the following costs of
the Closing: All fees and costs for releasing all encumbrances, liens and
security interests of record which are not Conditions of Title; the premium for
a CLTA owner's policy of title insurance in the amount of the Purchase Price and
all endorsements thereto specified in this Agreement; and all documentary or
other transfer taxes and recording fees. At Closing, Buyer shall pay the
following costs of the Closing: the additional premium, if any, for obtaining an
ALTA, rather than a CLTA, owner's policy of title insurance in connection with
this transaction and the recording costs. Each party shall pay one-half (1/2) of
all escrow fees in connection with the Closing and one-half (1/2) of any escrow
cancellation fee. Buyer shall pay all sales and use taxes imposed as a result of
this transaction, if any.
8.7 Procedure for Close. Title Company shall close escrow when it is in
a position to issue the Title Policy.
8.8 Indemnification by Seller. Except for those matters described in
the third sentence below, as of the Closing Date, Seller shall indemnify, defend
and hold Buyer harmless of and from any and all liabilities, claims, demands and
expenses, of any kind or nature (except those items which by this Agreement
specifically become the obligation of the Buyer) accruing on or before the
Closing Date and which are in any way related to the ownership or operation of
the Property, and all expenses related thereto including, without limitation,
court costs and attorneys' fees. Any claims under the preceding sentence must be
made no later than twelve months from Closing. As to any and all liabilities,
claims, demands and expenses, of any kind or nature (including, without
limitation, all expenses related thereto, including, without limitation, court
costs and attorneys fees, penalties, fines, clean-up costs, mitigation costs and
liens) which are in any way related to or arise out of the presence of Hazardous
Materials in, on, under or about the Property, Seller shall indemnify Buyer in
accordance with the terms of a separate agreement (the "Environmental Indemnity
Agreement") to be negotiated by March 28, 1997, and executed by Buyer and Seller
at Closing. In no event shall the Environmental Indemnity Agreement in any way
limit any rights which Buyer would otherwise have under applicable state,
federal or local laws against Seller.
8.9 Indemnification by Buyer. As of the Closing Date, Buyer shall
indemnify, defend and hold the Seller harmless of and from any and all
liabilities, claims, demands and expenses, of any kind or nature (except those
items which by this Agreement specifically remain the obligation of the Seller)
accruing subsequent to the Closing Date and which are in any way related to the
ownership or operation of the Property, and all expenses related thereto
including, without limitation, court costs and attorneys' fees.
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8.10. Escrow. Upon mutual execution of this Agreement, Buyer and Seller
shall deposit an executed counterpart of this Agreement with the Title Company
and this Agreement shall serve as instructions to the Title Company for
consummation of the purchase and sale contemplated hereby. Seller and Buyer
shall execute such supplemental escrow instructions as may be appropriate to
enable the Title Company to comply with the terms of this Agreement, provided
such supplemental escrow instructions are not in conflict with this Agreement.
In the event of any conflict between the provisions of this Agreement and any
supplementary escrow instructions signed by Buyer and Seller, the terms of this
Agreement shall control.
8.11. Compliance. The Title Company shall comply with all applicable
federal, state and local reporting and withholding requirements relating to the
close of the transactions contemplated herein. Without limiting the generality
of the foregoing, to the extent the transactions contemplated by this Agreement
involve a real estate transaction within the purview of Section 6045 of the
Internal Revenue Code of 1986, as amended (the "Internal Revenue Code"), Title
Company shall have sole responsibility to comply with the requirements of
Section 6045 of the Internal Revenue Code (and any similar requirements imposed
by state or local law). For purposes of this Section 8.11, Seller's tax
identification number is ▇▇-▇▇▇▇▇▇▇. Title Company shall hold Buyer, Seller and
their counsel free and harmless from and against any and all liability, claims,
demands, damages and costs, including reasonable attorney's fees and other
litigation expenses, arising or resulting from the failure or refusal of Title
Company to comply with such reporting requirements.
9. Brokers and Others
Seller shall be responsible for a brokerage commission payable to CB
Commercial on the sale of Santa Fe Springs Plaza. Each party warrants and
represents to the other that no person, firm or entity is in a position to claim
a real estate brokerage commission, other than the foregoing, due diligence fee
or finder's fee as a procuring cause of this transaction based upon contacts
with such party or the Property, and each party shall indemnify, defend and hold
the other harmless from and against any and all claims, causes of action,
liability or costs, including reasonable attorney's fees, arising as a result of
a breach of the foregoing warranty and representation. If closing does not occur
for any reason whatsoever, including a default by Buyer or Seller, then Seller
shall have no obligation to pay the Commissions. Buyer hereby discloses to
Seller that Buyer is a licensed California real estate broker.
10. Miscellaneous
10.1 Notices. All notices, demands or other communications of any type
(collectively "Notices") given by Seller to Buyer or by Buyer to Seller, whether
required by this Agreement or in any way related to this transaction, shall be
sufficient if in writing and delivered by hand or Federal Express or similar
courier service to the person to whom the Notice is directed or mailed to such
person by United States Mail, as a Registered or Certified item, Return Receipt
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Requested, at or to the addresses specified in this Section . Notices delivered
by mail shall be deposited in a Post Office or other depository under the care
or custody of the United States Postal Service, enclosed in a wrapper with
proper postage affixed, addressed, if to the Buyer, as follows:
▇▇▇▇▇▇▇ Pacific Properties, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇. ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
and if to the Seller, as follows:
BRE Properties, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇
Senior Vice President
Chief Operating Officer
with a copy to:
▇▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇, LLP
▇▇▇▇ Building, 30th Floor
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇▇
Any notice so deposited in the United States Mail shall be deemed to be
delivered three (3) calendar days after the date of such deposit, and any time
periods provided for herein during which a party may act shall not commence
until such notice is deemed to be so delivered. Either party to this Agreement
may change the address for Notice specified above by notice given as provided
herein to the other party.
10.2 Survival of Provisions and No Merger. Any representation,
warranty, covenant or agreement set forth in this Agreement of either party to
this Agreement whether to be performed
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before or after the time of Closing shall not be deemed to be merged into or
waived by the instruments of Closing, but shall expressly survive Closing and
shall be binding on the party obligated thereby.
10.3 Governing Law; Plurality; Gender. This Agreement shall be
construed and interpreted in accordance with the laws of the State of
California. Where required for proper interpretation, words in the singular
shall include the plural; the masculine gender shall include the neuter and the
feminine, and vice versa.
10.4 Amendment. This Agreement may not be modified or amended, except
by an agreement in writing signed by the parties to this Agreement. The parties
may waive any of the conditions contained in this Agreement or any of the
obligations of the other party under this Agreement, but any such waiver shall
be effective only if in writing and signed by the party waiving such conditions
or obligations.
10.5 Authorization. Each person executing this Agreement warrants and
represents that he is fully authorized to do so.
10.6 Time of Essence. Time is of the essence of this Agreement.
10.7 Attorney's Fees. If it becomes necessary for either party to file
a suit to enforce this Agreement or any provisions contained in this Agreement,
or to seek damages for a breach, the prevailing party shall be entitled to
recover, in addition to all other remedies or damages, reasonable attorney's
fees incurred in such suit.
10.8 Captions. The description headings of the several Articles,
Sections and Paragraphs contained in this Agreement are inserted for convenience
only and shall not control or effect the meaning or construction of any of the
provisions of this Agreement.
10.9 Entire Agreement. This Agreement, including the Exhibits attached
to this Agreement, constitutes the entire agreement among the parties pertaining
to the subject matter of this Agreement and supersedes all prior and
contemporaneous agreements and understandings of the parties in connection
therewith. No representation, warranty, covenant, agreement or condition not
expressed in this Agreement shall be binding upon the parties to this Agreement
or shall affect or be effective to interpret, change or restrict the provisions
of this Agreement.
10.10 Counterparts. A counterpart of this Agreement with separate but
fully executed signature pages attached thereto shall have the full force and
effect of an original executed instrument.
10.11 Successors and Assigns. This Agreement, and the terms, covenants
and conditions contained in this Agreement, shall be binding upon and inure to
the benefit of the parties hereto
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and their respective successors, heirs and assigns. Without limiting the
foregoing, Buyer specifically reserves the right to take title to the Property
in a name or assignee other than that of Buyer and Buyer may at any time prior
to close of escrow assign part or all of its rights hereunder, and Seller shall
be bound thereby provided further that said assignee assumes all of Buyer's
obligations hereunder as if such assignee were the original Buyer.
10.12 Exhibits. Any exhibits, to which reference is made in this
Agreement, are deemed incorporated into this Agreement in their entirety:
Exhibit ▇-▇, ▇-▇, ▇-▇ Property Description
Exhibit B Estoppel Certificate
Exhibit C-1, C-2, C-3 Bills of Sale
Exhibit ▇-▇, ▇-▇, ▇-▇ Assignment of Leases
Exhibit E-1, E-2, E-3 Assignment of Intangibles
Exhibit F-1, F-2, F-3 Grant Deed
Exhibit G Tenant Letter
Exhibit H Due Diligence Materials
Exhibit I Subordination Agreements
Exhibit J Buyer's Auditor's Documentation and Certificate
10.13. Exchange. At the option of either party, such party may elect to
consummate the transaction hereunder in whole or in part as a like-kind exchange
pursuant to Section 1031 of the Internal Revenue Code of 1986, as amended. If
either party (the "Exchanging Party") so elects, the other party (the
"Cooperating Party") shall cooperate with the Exchanging Party, executing such
documents and taking such action as may be reasonably necessary in order to
effectuate this transaction as a like-kind exchange; provided, however, that (i)
the Cooperating Party's cooperation hereunder shall be without cost, expense or
liability to the Cooperating Party of any kind or character, including, without
limitation, any attorneys' fees, costs or expense incurred in connection with
the review or preparation of documentation in order to effectuate such like-kind
exchange, and the Cooperating Party shall have no obligation to take title to
any real property; (ii) the Exchanging Party shall assume all risks in
connection with the designation, selection and setting of terms of the purchase
or sale of any exchange property; (iii) the Exchanging Party shall bear all
costs and expenses in connection with any such exchange transaction in excess of
the costs and expenses which would have otherwise been incurred in acquiring or
selling the Property by means of a straight purchase, so that the net effect to
the Cooperating Party shall be identical to that which would have resulted had
this Agreement closed on a purchase and sale; (iv) any documents to effectuate
such exchange transaction are consistent with the terms and conditions contained
in this Agreement; and (v) the Exchanging Party shall indemnify, defend and hold
the Cooperating Party harmless from any and all claims, demands, penalties,
loss, causes of action, suits, risks, liability, costs or expenses of any kind
or nature (including, without limitation, reasonable attorneys' fees) which the
Cooperating Party may incur or sustain, directly or indirectly, related to or in
connection with, or arising out of, the consummation of this
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transaction as a like-kind exchange as contemplated hereunder.
10.14. REIT. Buyer hereby advises Seller that Buyer is qualified as a
real estate investment trust under the provisions of the Internal Revenue Code
of 1986, as amended, and that, by reason thereof, the maintaining of such status
and the avoiding of any activity which might cause a penalty tax to be applied
is of material concern to Buyer. Accordingly, Seller agrees, at no cost or
expense to Seller, to make any reasonable modifications or amendments to this
Agreement requested by Buyer prior to Closing that may be necessary for Buyer to
maintain its status as a real estate investment trust or in order for it to
avoid a penalty tax; provided, however, that Seller shall have no obligation to
enter into any such modification or amendment that would in any way adversely
alter or affect, in Seller's sole judgment, Seller's rights, duties, or
obligations under this Agreement, or extend the Closing Date. If Seller declines
to modify or amend this Agreement for any reason in a manner which Buyer
determines, in the good faith exercise of its reasonable business judgment, is
necessary to maintain its status as a real estate investment trust or avoid a
penalty tax, Buyer shall have the right to terminate this Agreement by written
notice delivered to Seller prior to Closing. If Buyer exercises such termination
right, neither party shall have any further rights or obligations hereunder
(except with respect to provisions of this Agreement which recite that they
survive termination), the Deposit shall be returned to Buyer and all other funds
and documents deposited in escrow shall be returned to the party depositing the
same.
10.15. Confidentiality. Buyer and Seller agree that until the earlier
of (i) the Closing and (ii) termination of this Agreement pursuant to its terms,
neither Buyer nor Seller shall disclose or discuss the terms and conditions, nor
the existence, of the transaction contemplated hereby, except with those
employees, agents, servants and contractors of each that are providing services
with respect to this transaction, and to or with such other parties as both
Buyer and Seller agree are parties necessary to the consummation of this
transaction; provided that either Buyer or Seller may make such disclosures as
may be required under their normal securities reporting practices.
10.16. Seller's Post-Closing Covenant of Cooperation. Seller hereby
agrees to cooperate with Buyer or Buyer's auditors, at no expense or substantial
accounting time to Seller, after the Closing (i) by providing financial data
pertaining to the Property required by the Securities and Exchange Commission,
including the documentation requested on Exhibit J-1 (but without duplication of
any of the documents listed in Exhibit H which are delivered or otherwise made
available to Buyer pursuant to Section 4.2.5 above), and (ii) in delivering to
Buyer's auditors a certificate in the form of Exhibit J-2. Seller shall provide
such documentation and deliver such certificate in each instance within ten (10)
days after receipt of Buyer's request to do so.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
SELLER: BRE PROPERTIES, INC.,
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a Maryland corporation
By: __________________ By:________________
Its: ___________________ Its:________________
Date: ____________, 1997 Date:__________, 1997
BUYER: ▇▇▇▇▇▇▇ PACIFIC PROPERTIES, INC.,
a California corporation
By: _______________________
Its: _______________________
Date: ____________, 1997
By: _______________________
Its: _______________________
Date: ____________, 1997
We acknowledge receipt of this Agreement; and we agree to act as escrow agent in
this transaction in accordance with the foregoing instructions:
TITLE COMPANY: CHICAGO TITLE COMPANY
By: _______________________
Its: _______________________
Date: ______________________
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