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EXHIBIT 10.1
FIRST AMENDMENT TO
AGREEMENT OF PURCHASE AND SALE
AND JOINT ESCROW INSTRUCTIONS
THIS FIRST AMENDMENT TO AGREEMENT OF PURCHASE AND SALE OF REAL PROPERTY
AND JOINT ESCROW INSTRUCTIONS (this "AMENDMENT"), dated June 10, 1998 for
reference purposes, is entered into by and between KBD Partners, Garden Grove
Associates, Xxxxxxxxx Family Partners, L.P., Xxxx Tustin Business Center, Ltd.,
and Xxxx-KW, Ltd. (collectively, "Seller"), and Pacific Gulf Properties Inc.
("Buyer"), with reference to the following facts:
A. Seller and Buyer have previously executed and delivered that certain
Agreement of Purchase and Sale and Joint Escrow Instructions dated April 13,
1998 (the "Agreement"). Terms used herein shall have the meanings given thereto
in the Agreement.
B. Buyer delivered a notice dated May 28, 1998 to Seller terminating the
Agreement.
C. Buyer and Seller now desire to reinstate the Agreement, and to amend
the Agreement as hereinafter set forth.
AGREEMENT
NOW THEREFORE, in consideration of the foregoing recitals, and the
mutual covenants contained herein, Buyer and Seller hereby agree as follows:
1. Reinstatement of Agreement. Seller and Buyer hereby reinstate the
Agreement, subject to the modifications and amendments contained in this
Amendment.
2. Elimination of KBC-Santa Fe Springs. Seller and Buyer have agreed that
the Project referred to in the Agreement as "KBC-Santa Fe Springs", and more
particularly described on Exhibit "A-2" of the Agreement, shall not be sold by
Seller to Buyer, and shall not be purchased by Buyer from Seller. In
furtherance of the foregoing, all references in the Agreement to KBC-Santa Fe
Springs are deleted, and the Purchase Price is reduced by $6,500,000, which is
the amount of the Purchase Price allocated to KBC-Santa Fe Springs pursuant to
paragraph 2(b) of the Agreement. The parties understand and agree that
KBC-Santa Fe Springs is being deleted from the portfolio constituting the
Property being sold to Buyer pursuant to the Agreement.
3. Purchase Price Reduction. The portion of the Purchase Price allocated
in paragraph 2(a) of the Agreement to KBC-Irvine of "$11,600,000" is hereby
reduced to "$11,200,000". For all purposes and with respect to all references in
the Agreement, the Purchase Price allocated to KBC-Irvine shall be $11,200,000.
As a result of the deletion of KBC-Santa Fe Springs
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from the Property, and the reduction in the Purchase Price allocated to
KBC-Irvine described above, Seller and Buyer agree that for all purposes of the
Agreement, the aggregate Purchase Price for KBC-Irvine, KBC-Garden Grove,
KBC-Tustin and KW is Forty One Million Eight Hundred Thousand Dollars
($41,800,000), subject to adjustment by the prorations contained in the
Agreement and in paragraph 4, below.
4. Income Credit. Seller agrees to credit Buyer at Closing for certain
prepaid income in the amount of One Hundred Thousand Dollars ($100,000). Such
credit shall not affect the terms and provisions of paragraph 11(b) of the
Agreement regarding the proration of Tenant Rents.
5. Close of Escrow. In the last sentence of Section 4(b) of the
Agreement, the date of "June 12, 1998" is extended to "June 18, 1998".
Notwithstanding anything to the contrary contained in the Agreement, the
Closing Date shall be June 18, 1998.
6. Contingency Matters. The "Contingency Period" shall be deemed to
expire on the date this Amendment is executed by Buyer. The Seller and Buyer
confirm and agree that, notwithstanding the expiration of the Contingency
Period, the terms and conditions of paragraph 7(c)(i) of the Agreement remain
in full force and effect.
7. Buyer's Review of Title. Buyer hereby provides Seller with Buyer's
Title Notice pursuant to paragraph 7(a)(ii) as follows: with respect to
KBC-Garden Grove, KBC-Tustin and KBC-Irvine, certain of the improvements at
each Project encroach over utility easements and into the respective City
setback areas. The Title Company has indicated they will provide affirmative
insurance over such encroachments upon receipt of evidence from the easement
holders and from the City regarding such parties acceptance of the
encroachments. Buyer has requested such evidence from the easement holders and
City. Buyer disapproves the encroachments of the above describe improvements
into the easement and setback areas, but will waive such disapproval upon
receipt of confirmation that the Title Company will issue appropriate
affirmative title insurance coverage for such matters. The provisions of this
paragraph 7 shall not extend the Closing.
8. Execution by Xxxxx X. Xxxxxxxxx. Execution of the Agreement by Xxxxx
X. Xxxxxxxxx was in his capacity as the president of the general partner of The
Xxxxxxxxx Group, L.P., a partner of KBD. By its execution of this Amendment, KBD
hereby ratifies and affirms the terms and conditions of the Agreement.
9. Counterparts. This Amendment may be executed in counterparts, each
of which shall be deemed an original and all of which shall constitute one and
the same agreement with the same effect as if all parties had signed the same
signature page.
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This Amendment shall be deemed executed and delivered upon each party's
delivery of executed signature pages, which signature pages may be delivered by
facsimile with the same effect as delivery of the originals.
10. Confirmation. Except as expressly set forth herein, the Agreement
remains unmodified and in full force and effect.
IN WITNESS WHEREOF, Buyer and Seller have executed this Amendment of the
date first set forth above.
BUYER:
PACIFIC GULF PROPERTIES INC.,
a Maryland corporation
By: /s/ XXXXXX X. XXXXXXX
---------------------------------
Xxxxxx X. Xxxxxxx, EVP
---------------------------------
(Print Name and Title)
SELLER:
"KBD" KBD PARTNERS, a California general
partnership
By:
---------------------------------
Xxxxxxx X. Xxxxxxx
Its: Partner
By: The Xxxxxxxxx Group, L.P., a
California limited partnership
Its: Partner
By: Westmont Investment Company,
Inc., a California corporation
Its: Sole General Partner
By: /s/ XXXXX X. XXXXXXXXX
------------------------------
Xxxxx X. Xxxxxxxxx
Its: President
(SIGNATURES CONTINUED ON NEXT PAGE)
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[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
"Garden Grove" GARDEN GROVE ASSOCIATES, a California
general partnership
By: KBD Partners,
a California general partnership
Its: Managing General Partner
By: /s/ XXXXXXX X. XXXXXXX
--------------------------------
Xxxxxxx X. Xxxxxxx
Its: Partner
By: The Xxxxxxxxx Group, L.P., a
California limited partnership
Its: Partner
By: Westmont Investment
Company, Inc., a
California corporation
Its: Sole General Partner
By: /s/ XXXXX X. XXXXXXXXX
-------------------------
Xxxxx X. Xxxxxxxxx
Its: President
"Xxxxxxxxx" XXXXXXXXX FAMILY PARTNERS, L.P.
a Washington limited partnership
By: The Xxxxxxxxx Company,
a Washington corporation
Its: Sole General Partner
By: /s/ XXXXXX XXXXXXXXX
------------------------------------
Xxxxxx Xxxxxxxxx
Its: President
[SIGNATURES CONTINUED ON NEXT PAGE]
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[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
"Xxxx-Xxxxxx" XXXX TUSTIN BUSINESS CENTER, LTD.,
a California limited partnership
By: KBD Partners,
a California general partnership
Its: Sole General Partner
By: /s/ XXXXXXX XXXXXXX
-------------------------------
Xxxxxxx X. Xxxxxxx
Its: Partner
By: The Xxxxxxxxx Group, L.P., a
California limited partnership
Its: Partner
By: Westmont Investment
Company, Inc., a
California corporation
Its: Sole General Partner
By: /s/ XXXXX X. XXXXXXXXX
---------------------------
Xxxxx X. Xxxxxxxxx
Its: President
"Xxxx-KW" XXXX-KW, LTD.,
a California limited partnership
By: KBD Partners,
a California general partnership
Its: Sole General Partner
By: /s/ XXXXXXX X. XXXXXXX
-------------------------------
Xxxxxxx X. Xxxxxxx
Its: Partner
By: The Xxxxxxxxx Group, L.P., a
California limited partnership
Its: Partner
By: Westmont Investment
Company, Inc., a
California corporation
Its: Sole General Partner
By: /s/ XXXXX X. XXXXXXXXX
---------------------------
Xxxxx X. Xxxxxxxxx
Its: President
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AGREEMENT OF PURCHASE AND SALE
AND JOINT ESCROW INSTRUCTIONS
7
AGREEMENT OF PURCHASE AND SALE
AND JOINT ESCROW INSTRUCTIONS
Table of Contents
1 Purchase and Sale......................................................2
2. Purchase Price.........................................................2
3. Payment of Purchase Price..............................................3
4. Escrow.................................................................4
5. Condition of Title.....................................................4
6. Title Policies.........................................................5
7. Conditions to Close of Escrow..........................................5
8. Deposits by Seller....................................................16
9. Deposits by Buyer.....................................................18
10. Costs and Expenses....................................................19
11. Prorations............................................................19
12. Disbursements and Other Actions by Escrow Holder......................22
13. Seller's Covenants, Representations and Warranties....................23
14. Buyer's Covenants, Representations and Warranties.....................26
15. Liquidated Damages....................................................28
16. Waiver Of Right To Specific Performance...............................29
17. Damage or Condemnation Prior to Closing...............................29
18. Notices...............................................................30
19. Brokers...............................................................31
20. Legal Fees............................................................31
21. Assignment............................................................31
22. Miscellaneous.........................................................32
23. Exchange..............................................................33
EXHIBIT "A-1" LEGAL DESCRIPTION OF KBC-IRVINE
EXHIBIT "A-2" LEGAL DESCRIPTION OF KBC-SANTA FE SPRINGS
EXHIBIT "A-3" LEGAL DESCRIPTION OF KBC-GARDEN GROVE
EXHIBIT "A-4" LEGAL DESCRIPTION OF KBC-TUSTIN
EXHIBIT "A-5" LEGAL DESCRIPTION OF KW
EXHIBIT "B" GRANT DEED
EXHIBIT "C" TENANT'S ESTOPPEL CERTIFICATE
EXHIBIT "D" INTENTIONALLY OMITTED
EXHIBIT "E" SELLER'S TAX CERTIFICATE
EXHIBIT "F" ASSIGNMENT OF LEASE AND ASSUMPTION AGREEMENT
EXHIBIT "G" ASSIGNMENT OF CONTRACTS AND ASSUMPTION AGREEMENT
EXHIBIT "H" INTENTIONALLY OMITTED
EXHIBIT "I" IDENTIFICATION OF ENVIRONMENTAL REPORTS
EXHIBIT "J" KBC-TUSTIN GROUND LEASE ASSIGNMENT
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EXHIBIT "K" ASSIGNMENT OF SUBLEASE
EXHIBIT "L" KW SUBLEASE ASSIGNMENT
EXHIBIT "M" WAREHOUSE ASSIGNMENT
EXHIBIT "N" GROUND LEASE IMPROVEMENT GRANT DEED
EXHIBIT "O" ASSIGNMENT OF SETTLEMENT AGREEMENT
EXHIBIT "P" GENERAL ASSIGNMENT
EXHIBIT "Q" GROUND LESSOR ESTOPPEL CERTIFICATE
EXHIBIT "R" SELLER'S GROUND LEASE ESTOPPEL CERTIFICATE
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AGREEMENT OF PURCHASE AND SALE
AND JOINT ESCROW INSTRUCTIONS
TO: Fidelity National Title Insurance Company Escrow Nos. 615011-615015
0000 Xxxxx Xxx Xxxx Xxxxxx, Xxxxx 000 Escrow Officer: Xxxxx Xxxxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000 Title Order Nos. 00000-XX, 00000-XX,
("Escrow Holder") 00000-XX, 00000-XX and 63745-RD
Title Officer: Xxxx Xxxxxxxx
This AGREEMENT OF PURCHASE AND SALE AND JOINT ESCROW INSTRUCTIONS
("Agreement") is made and entered into as of this 13th day of April, 1998, by
and between PACIFIC GULF PROPERTIES INC., a Maryland corporation ("Buyer"), and
KBD PARTNERS, a California general partnership ("KBD"), GARDEN GROVE ASSOCIATES,
a California general partnership ("Garden Grove"), XXXXXXXXX FAMILY PARTNERS,
L.P., a Washington limited partnership ("Xxxxxxxxx"), XXXX TUSTIN BUSINESS
CENTER, LTD., a California limited partnership ("Xxxx-Xxxxxx") and XXXX-KW,
LTD., a California limited partnership ("Xxxx-KW"). KBD, Garden Grove,
Fagerholm, Xxxx-Xxxxxx and Xxxx-KW are collectively referred to herein as the
"Seller".
RECITALS:
A. KBD is the owner of that certain real property located in the City of
Irvine, County of Orange, State of California, located on Xxxxxxxxxx Road north
of Main Street, consisting of approximately 8.46 gross acres of improved land,
all of which is more particularly described on Exhibit "A-1" attached hereto,
together with seven (7) R&D/Flex buildings located thereon, containing
approximately 129,015 square feet of space, associated parking areas and other
improvements located thereon ("KBC-Irvine").
B. KBD is the owner of that certain real property located in the City of
Santa Fe Springs, County of Los Angeles, State of California, located on the
northeast corner of Xxxxxxx Avenue and Xxxxxxxx Avenue, consisting of
approximately 7.57 gross acres of improved land, all of which is more
particularly described on Exhibit "A-2" attached hereto, together with eight (8)
multi-tenant buildings located thereon, containing approximately 120,119 square
feet of space, associated parking areas and other improvements located thereon
("KBC-Santa Fe Springs").
C. Garden Grove and Xxxxxxxxx, as tenants in common, are the owners of
that certain real property located in the City of Garden Grove, County of
Orange, State of California, located on Garden Grove Boulevard at Xxxxx Avenue
on/off ramp to Garden Grove (22) Freeway, consisting of approximately 13.98
gross acres of improved land, all of which is more particularly described on
Exhibit "A-3" attached hereto, together with twelve (12) multi-tenant buildings
located thereon, containing approximately 208,200 square feet of space,
associated parking areas and other improvements located thereon ("KBC-Garden
Grove").
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X. Xxxx-Xxxxxx is the owner of a leasehold interest in that
certain real property located in the City of Tustin, County of Orange, State of
California, located at the southeast corner of Red Hill Avenue and Xxxxxxx
Avenue, consisting of approximately 21.86 gross acres of improved land, all of
which is more particularly described on Exhibit "A-4" attached hereto, together
with fifteen (15) multi-tenant buildings located thereon, containing
approximately 240,602 square feet of space, parking areas and other
improvements; one (1) 582 unit mini warehouse (the "Mini Warehouse") project,
containing approximately 65,485 square feet of space, parking areas and other
improvements; and approximately four (4) acres of such Project of which has been
sub-ground leased by Xxxx-Xxxxxx'x predecessor-in-interest, as sublessor, to the
predecessor-in-interest of Rustic Restaurant, Inc., a California corporation
("Rustic"), as sublessee (the "Barn Subgroundlease"), which portion of the
Project has been improved with The Barn Restaurant (collectively, "KBC-Tustin").
X. Xxxx-KW is the owner of a subleasehold interest in that certain real
property located in the City of Tustin, County of Orange, State of California,
located contiguous to the eastern boundary of KBC-Tustin, consisting of
approximately 10.1 gross acres of improved land, all of which is more
particularly described on Exhibit "A-5" attached hereto, together with one (1)
dock high warehouse building located thereon, containing approximately 60,000
square feet of space, parking areas and other improvements and one (1)
recreational vehicle storage facility ("RV Storage Facility") (collectively,
"KW").
F. KBC-Irvine, KBC-Santa Fe Springs, KBC-Garden Grove, KBC-Tustin and KW
are collectively referred to herein as the "Property" and may be referred to
herein individually as a "Project".
NOW THEREFORE, in consideration of the mutual covenants and agreements
herein contained and for other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, Seller and Buyer hereby agree that
the terms and conditions of this Agreement and the instructions to Escrow Holder
with regard to the escrow ("Escrow") created pursuant hereto are as follows:
AGREEMENT:
1. Purchase and Sale. Seller agrees to sell the Property to Buyer, and
Buyer agrees to purchase the Property from Seller, upon the terms and conditions
herein set forth.
2. Purchase Price. The purchase price ("Purchase Price") for the
Property shall be Forty-Eight Million Seven Hundred Thousand Dollars
($48,700,000.00). The Purchase Price shall be allocated to each Project as
follows:
(a) KBC-Irvine $11,600,000.00
(b) KBC-Santa Fe Springs $ 6,500,000.00
(c) KBC-Garden Grove $11,650,000.00
(d) KBC-Tustin $15,950,000.00
(e) KW $ 3,000,000.00
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3. Payment of Purchase Price. The Purchase Price for the Property shall
be paid by Buyer as follows:
(a) Deposit. Upon the "Opening of Escrow" (as defined in
Paragraph 4(a) below), Buyer shall deposit, or cause to be deposited
with Escrow Holder, in cash, by certified or bank cashier's check made
payable to Escrow Holder, or by a confirmed wire transfer of funds
(hereinafter referred to as "Immediately Available Funds"), the sum of
Five Hundred Thousand Dollars ($500,000) (the "Deposit"). Escrow Holder
shall place the Deposit in an interest bearing account. Such account
shall have no penalty for early withdrawal and Buyer shall accept all
risks with regard to such account. Upon the expiration of the
"Contingency Period" (as defined in Paragraph 7(a)(i) below), the
Deposit (excluding any interest accrued thereon) shall be released by
Escrow Holder to Seller. Buyer covenants and agrees to execute any
written instructions that Escrow Holder may require to release the
Deposit as aforesaid. The Deposit and the interest accrued thereon (if
same has not previously been released to Buyer) shall be applicable to
the Purchase Price upon the "Close of Escrow" (as defined in Paragraph
4(b) below) and shall be nonrefundable to Buyer if Buyer fails to
acquire the Property as provided herein and such failure constitutes a
default by Buyer hereunder.
(b) Assumption of Garden Grove Encumbrance. A portion of the
Purchase Price shall be deemed paid by Buyer's acquiring title to
KBC-Garden Grove encumbered by, and Buyer's assumption of, the Garden
Grove Encumbrance. As used herein, the term "Garden Grove Encumbrance"
shall mean collectively, (1) that certain Deed of Trust and Security
Agreement and Fixture Filing with Assignment of Leases and Rents dated
May 2, 1996 by and among Garden Grove, as borrower, Xxxxxxxxx, as
non-borrower trustor, Fidelity National Title Insurance Company, as
trustee, and Indianapolis Life Insurance Company, an Indiana
corporation, as beneficiary ("Beneficiary"), and recorded May 9, 1996 in
the Official Records of Orange County, California, as Instrument No.
19960232315 ("Garden Grove Deed of Trust"); and (2) any other
instruments given as security for the repayment of that certain
promissory note ("Garden Grove Note") in the original principal amount
of $2,625,000.00 made payable by Garden Grove to Beneficiary. The exact
outstanding principal balance of the Garden Grove Encumbrance as of the
Close of Escrow shall be established by a statement from Beneficiary
placed into Escrow at least three (3) days prior to the Close of Escrow,
and Buyer shall be credited with such Garden Grove Encumbrance upon the
Close of Escrow.
(c) Closing Funds. Prior to the Close of Escrow, Buyer shall
deposit or cause to be deposited with Escrow Holder, in Immediately
Available Funds, the balance of the Purchase Price adjusted for the
Deposit, the current outstanding balance of the Garden Grove Encumbrance
as established by Beneficiary and Escrow Holder's estimate of Buyer's
share of closing costs, prorations and charges payable pursuant to this
Agreement.
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4. Escrow.
(a) Opening of Escrow. For purposes of this Agreement, the
Escrow shall be deemed opened on the date Escrow Holder shall have
received (i) a fully executed original or originally executed
counterparts of this Agreement from Seller and Buyer, and (ii) the
Deposit from Buyer (the "Opening of Escrow"). Escrow Holder shall notify
Buyer and Seller, in writing, of the date Escrow is opened. Buyer and
Seller agree to execute, deliver and be bound by any reasonable or
customary supplemental escrow instructions of Escrow Holder or other
instruments as may reasonably be required by Escrow Holder in order to
consummate the transaction contemplated by this Agreement. Any such
supplemental instructions shall not conflict with, amend or supersede
any portions of this Agreement. To the extent of any inconsistency
between the provisions of such supplemental instructions and the
provisions of this Agreement, the provisions of this Agreement shall
control.
(b) Close of Escrow. For purposes of this Agreement, the "Close
of Escrow" shall be defined as the date that the "Grant Deeds" (as
defined in Paragraph 8(a) below), in the form attached hereto as Exhibit
"B", the "KBC-Tustin Ground Lease Assignment" (as defined in Paragraph
8(h) below), in the form attached hereto as Exhibit "J", the "KW
Sublease Assignment" (as defined in Paragraph 8(j) below), in the form
attached hereto as Exhibit "L" and the "Ground Lease Improvement Grant
Deeds" (as defined in Paragraph 8(t) below), in the form attached hereto
as Exhibit "N", as applicable, are recorded in the public records of the
county in which each such Project is located (the "Official Records").
This Escrow shall close on or before June 12, 1998 ("Closing Date"), or
such earlier or later date as may be mutually agreed to by Buyer and
Seller.
5. Condition of Title. It shall be a condition to the Close of Escrow
for Buyer's benefit that Seller's interest in each Project shall be conveyed to
Buyer by the Grant Deed, the KBC-Tustin Ground Lease Assignment, the KW Sublease
Assignment and/or the Ground Lease Improvement Grant Deeds, as applicable,
subject to the following condition of title ("Condition of Title"):
(a) a lien to secure payment of general and special real
property taxes and assessments, not delinquent;
(b) the lien of supplemental taxes assessed pursuant to Chapter
3.5 commencing with Section 75 of the California Revenue and Taxation
Code;
(c) matters affecting the Condition of Title created by or with
the written consent of Buyer;
(d) all matters which are disclosed by the "Surveys" (as defined
in Paragraph 7(a)(ii) below) of each Project which are approved or
deemed approved by Buyer as provided therein;
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(e) all exceptions which are disclosed by the "Reports"
described in Paragraph 7(a)(ii) below which are approved or deemed
approved by Buyer as provided therein;
(f) all matters which would be disclosed by a physical
inspection or survey of the Property;
(g) all applicable laws, ordinances, rules and governmental
regulations (including, but not limited to, those relative to building,
zoning and land use) affecting the development, use, occupancy or
enjoyment of each Project; and
(h) with respect to KBC-Garden Grove only, the Garden Grove Deed
of Trust.
Notwithstanding anything herein to the contrary or any approval or
consent given by Buyer hereunder, except for those matters described in
Paragraphs 5(a), 5(b) and 5(h) above, Seller shall cause all mortgages, deeds of
trust and other monetary encumbrances, including without limitation, all
mechanic's liens, to be released and reconveyed from the Property on or prior to
the Close of Escrow. Not, withstanding the foregoing, any assumption fees
payable in connection with Buyer's assumption of the Garden Grove Encumbrance
shall be payable by Buyer. Similarly, any prepayment fees payable upon Buyer's
prepayment of the Garden Grove Encumbrance, following assumption, shall be the
responsibility of Buyer.
6. Title Policies. Title shall be evidenced by the willingness of Escrow
Holder in its capacity as title insurer ("Title Company") to issue an ALTA
Owner's Form Policy of Title Insurance or an ALTA Leasehold Form Policy of Title
Insurance, as applicable (Form B, Rev. 10/17/70, with Endorsement Form 1
Coverage) (individually, a "Title Policy" and collectively, the "Title
Policies"), in the aggregate amount of the Purchase Price, showing title to each
Project vested in Buyer, subject only to the Condition of Title. Each Title
Policy shall provide full coverage against mechanics' and materialmen's liens
and shall contain, to the extent required by Buyer, the CLTA 100 (modified for
an owner), 101.4, 103.7, 116, 116.1, 116.4 and 116.7 endorsements.
7. Conditions to Close of Escrow.
(a) Conditions to Buyer's Obligations. Buyer's obligation to
consummate the transaction contemplated by this Agreement is subject to
the satisfaction, in Buyer's sole, absolute and subjective discretion,
of the following conditions for Buyer's benefit (or Buyer's waiver
thereof, it being agreed that Buyer may waive any or all of such
conditions) on or prior to the dates designated below for the
satisfaction of such conditions. In the event Buyer terminates this
Agreement and the Escrow due to the nonsatisfaction of any of such
conditions, then Buyer shall be entitled to the return of the Deposit
and all interest accrued thereon and both Seller and Buyer shall be
relieved of all further obligations and liabilities under this Agreement
(except for the indemnity and insurance obligations of Buyer set forth
in Paragraph 7(a)(i)(A) below and the covenants of Buyer set forth in
Paragraph 22(a) below, which shall survive any such termination).
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(i) Contingency Matters. Buyer shall have until 5 p.m.
on May 28, 1998 (such period of time shall be referred to herein
as the "Contingency Period") to satisfy itself, in Buyer's sole,
absolute and subjective discretion, as to the following matters:
(A) Buyer's Review of the Property and Related
Matters. Buyer shall be satisfied with all aspects of
the Property and its condition and suitability for
Buyer's intended use thereof, including, without
limitation, the zoning for each Project and the
availability of all permits, licenses, variances and the
like necessary for Buyer's intended use of each Project.
During the term of this Escrow, Buyer, its agents,
contractors and subcontractors shall have the right to
enter upon the Property, at reasonable times during
ordinary business hours following not less than
twenty-four (24) hours prior notice to Seller, to make
such inspections, surveys and tests as may be necessary
in Buyer's discretion (provided, however, that, although
Buyer retains the right to conduct further roof
inspections, Buyer acknowledges Buyer has previously
conducted roof inspections and hereby waives any
contingency regarding the roofs at the Property),
including, without limitation, soils tests, toxic waste
analysis, geological and/or engineering studies and land
use or related studies; provided, however, if Buyer
proposes to make any tests in connection with any Phase
II environmental report or any other tests which involve
drilling, boring or other similar intrusive or invasive
action on or under the Property, then Buyer shall obtain
Seller's written consent prior to making any such tests,
which consent may be withheld in Seller's sole, absolute
and subjective discretion. Buyer shall use care and
consideration in connection with any of its inspections
or tests and Seller shall have the right to be present
during any inspection of the Property by Buyer or its
agents. Buyer shall restore the Property to its
condition existing prior to such inspections or tests
after any and all tests and/or inspections. Buyer hereby
indemnifies, protects, defends (with counsel chosen by
Seller) and holds Seller and the Property free and
harmless from and against any and all costs, losses,
liabilities, damages, lawsuits, judgments, actions,
proceedings, penalties, demands, attorneys' fees,
mechanic's liens, or expenses of any kind or nature
whatsoever, arising out of or resulting from (i) any
entry and/or activities upon the Property by Buyer,
Buyer's agents, contractors and/or subcontractors,
and/or the contractors and subcontractors of such
agents, or (ii) from the enforcement of this agreement
of indemnity or the assertion by Buyer of any defense to
its obligations hereunder.
Prior to any entry upon the Property by Buyer's
agents, contractors, subcontractors or employees, Buyer
shall deliver to Seller an original endorsement to
Buyer's commercial general liability insurance policy
which evidences that Buyer is carrying a commercial
general liability insurance policy with a financially
responsible insurance company
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acceptable to Seller, covering (i) the activities of
Buyer, and Buyer's agents, contractors, subcontractors
and employees on or upon the Property, and (ii) Buyer's
indemnity obligation contained in this Paragraph
7(a)(i)(A). Such endorsement to such insurance policy
shall evidence that such insurance policy shall have a
per occurrence limit of at least One Million Dollars
($1,000,000) and an aggregate limit of at least Five
Million Dollars ($5,000,000), shall name Seller as an
additional insured, shall be primary and noncontributing
with any other insurance available to Seller and shall
contain a full waiver of subrogation clause.
(B) Review and Approval of Documents and
Materials. On or before April 13, 1998, Seller shall
deliver or have previously delivered to Buyer those
documents and materials respecting each Project set
forth below (the "Documents and Materials"). The failure
of Buyer to disapprove any of the Documents and
Materials on or before the expiration of the Contingency
Period shall be deemed to constitute Buyer's approval
thereof:
(a) Tenant Leases. A complete copy of
all leases and lease guaranties, if any
(individually, a "Lease" and collectively, the
"Leases"), between Seller and the tenants
(individually, a "Tenant" and collectively, the
"Tenants") for each Project (including, without
limitation, the Barn Subgroundlease), which
Leases will be identified on the Rent Roll for
each Project;
(b) Improvement Plans. Complete
"as-built" plans, drawings and specifications
relating to the improvements for each Project,
if available;
(c) Soils, Environmental and Engineering
Reports. All existing and available soils,
environmental and building reports and
engineering data pertaining to each Project and
any and all architectural studies, grading
plans, topographical maps and similar data
respecting each Project, if available;
(d) Contracts. Copies of all service and
maintenance contracts and warranties, if any,
currently in effect with respect to each Project
(the "Contracts"). Prior to the expiration of
the Contingency Period, Buyer shall designate
which Contracts, if any, Buyer approves and
agrees to assume as of the Close of Escrow;
(e) Intentionally Omitted;
(f) Rent Rolls. A rent roll ("Rent
Rolls") for each Project prepared as of the
Opening of Escrow;
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(g) Settlement Agreement. A copy of that
certain Settlement Agreement and Mutual General
Release ("Settlement Agreement") between
Xxxx-KW, Xxxx-Xxxxx, Ltd., Xxxx Management
Services, Xxxxxxx Xxxxxxxxxx and Xxxxx Xxxxxx,
on the one hand, and Xxxx X. Xxxxxxxxx, Xxxxx
Xxxxxxxxx and Xxxxxxx Xxxxxxxxx, all
individually and doing business as Rick's R.V.
Storage (collectively, the "Xxxxxxxxx Parties"),
on the other hand, together with all pertinent
pleadings filed in Case No. 769733 of the
California Superior Court for Orange County,
California;
(h) Mini Warehouse Rental Agreements.
The form of rental agreement used for the Mini
Warehouse (A complete copy of all rental
agreements for the Mini Warehouse ("Mini
Warehouse Rental Agreements" between Seller and
the renters at the Mini Warehouse) shall be
available for review and copying (at Buyer's
sole cost and expense) at Seller's Property
Management Office);
(i) KBC-Tustin Ground Lease. A complete
copy of the ground lease (the "KBC-Tustin Ground
Lease") to which KBC-Tustin is subject;
(j) KW Sublease. A complete copy of the
ground lease ("Master Lease") and the ground
sublease ("KW Sublease") to which KW is subject;
(k) Surveys. The most recent survey of
each project in Seller's possession;
(l) Tax Statements. Copies of the most
recent real property tax bills for each Project;
(m) Cash-Actual/Budget Variance Reports.
Copies of the Cash-Actual/Budget Variance
Reports for each Project for the calendar years
of 1995, 1996 and 1997 and for the first quarter
of 1998 and a current rent delinquency report,
if available;
(n) Permits and Certificates of
Occupancy. A copy of zoning compliance, building
permit confirmation and certificates of
occupancy for each Project in Seller's
possession, if any;
(o) Garden Grove Encumbrance. A copy of
the Garden Grove Deed of Trust, the Garden Grove
Note and any
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other pertinent documents relating to the Garden
Grove Encumbrance; and
(p) License and Indemnity Agreement. A
copy of that certain "License and Indemnity
Agreement" (as defined in Paragraph 7(c)(ii)
below); provided, that Buyer complies with that
certain Confidentiality Letter Agreement dated
March 4, 1998.
Buyer she have the fight, at Buyer's sole cost and
expense, upon providing Seller with at least forty-eight (48)
hours prior written notice, to have an audit of each Project
prepared by an independent public accounting firm designated by
Buyer, sufficient to comply with Buyer's reporting requirements
to the Securities and Exchange Commission. Buyer acknowledges
and agrees that (i) it shall use its best efforts to cause the
audit to be completed as expeditiously as possible; and (ii) it
shall use commercially reasonable efforts to not interfere with
Sellees business operations during the period of the audit.
If, during the Contingency Period, Buyer determines that
it is dissatisfied, in Buyer's sole, absolute and subjective
discretion, with any aspects of the Property and/or its
condition or suitability for Buyer's intended use or with any of
the Documents and Materials, then Buyer may terminate this
Agreement and the Escrow created pursuant hereto by delivering
written notice to Seller on or before the expiration of the
Contingency Period of Buyer's election to terminate, in which
event (i) this Agreement and the Escrow created pursuant hereto
shall terminate and be of no further force or effect (except for
the indemnity and insurance obligations of Buyer contained above
in Paragraph 7(a)(i)(A) and the covenants of Buyer set forth in
Paragraph 22(a) below, which shall survive any such
termination), (ii) Escrow Holder shall return to Buyer the
Deposit and all interest accrued thereon (less Buyer's share of
escrow cancellation charges), and (iii) Buyer shall return to
Seller all Documents and Materials previously delivered to Buyer
by Seller. If Buyer fails to deliver any such termination notice
to Seller on or before the expiration of the Contingency Period,
then Buyer shall be deemed to be satisfied with all aspects of
the Documents and Materials, and with all aspects of the
Property, including, without limitation, the condition and
suitability of the Property for Buyer's intended use.
(ii) Buyer's Review of Title. Buyer shall have until the
expiration of the Contingency Period (the "Title Review Period")
to approve (A) a standard preliminary report from the Title
Company for each Project, together with the underlying documents
relating to the Schedule B exceptions set forth in each report
and the legal description of each Project (individually, a
"Report" and collectively, the "Reports") and (B) a survey of
each Project (individually, a "Survey" and collectively, the
"Surveys"). Buyer shall have until the end of the Title Review
Period to give Seller written notice ("Buyer's Title Notice") of
Buyer's disapproval or conditional approval of any matters shown
in the Reports or disclosed by the Surveys. The failure of Buyer
to give Buyer's Title Notice on
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or before the end of the Title Review Period shall be deemed to
constitute Buyer's approval of the condition of title to each
Project. If Buyer disapproves or conditionally approves any
matter of title shown in the Reports, then Seller may, but shall
have no obligation to, within five (5) business days after its
receipt of Buyer's Title Notice ("Seller's Election Period"),
elect to eliminate or ameliorate to Buyer's satisfaction the
disapproved or conditionally approved title matters by giving
Buyer written notice ("Seller's Title Notice") of those
disapproved or conditionally approved title matters, if any,
which Seller agrees to so eliminate or ameliorate by the Closing
Date, provided, that, Seller shall have no obligation to pay any
consideration or incur any liability in order to eliminate or
ameliorate such disapproved title matters. If Seller does not
elect to eliminate or ameliorate any disapproved or
conditionally approved title matters, or if Buyer disapproves
Seller's Title Notice, or if Seller fails to timely deliver
Seller's Title Notice, then Buyer shall have the right, upon
delivery to Seller (on or before five (5) business days
following the expiration of Seller's Election Period) of a
written notice, to either: (A) waive its prior disapproval, in
which event said disapproved matters shall be deemed approved;
or (B) terminate this Agreement and the Escrow created pursuant
hereto, in which event Buyer shall be entitled to the return of
the Deposit, together with all interest accrued thereon while in
Escrow. Failure to take either one of the actions described in
(A) and (B) above shall be deemed to be Buyer's election to take
the action described in (A) above. If, in Seller's Title Notice,
Seller has agreed to either eliminate or ameliorate to Buyer's
satisfaction by the Closing Date certain disapproved or
conditionally approved title matters described in Buyer's Title
Notice, but Seller is unable to do so, then Buyer shall have the
right (which shall be Buyer's sole and exclusive right or remedy
for such failure), upon delivery to Seller (on or before one (1)
business day prior to the Closing Date) of a written notice to
either: (x) waive its prior disapproval, in which event said
disapproved matters shall be deemed approved; or (y) terminate
this Agreement and the Escrow created pursuant hereto, in which
event Buyer shall be entitled to the return of the Deposit,
together with all interest accrued thereon while in Escrow.
Failure to take either one of the actions described in (x) and
(y) above shall be deemed to be Buyer's election to take the
action described in (x) above. In the event this Agreement is
terminated by Buyer pursuant to the provisions of this Paragraph
7(a)(ii), neither party shall have any further rights or
obligations hereunder except that the indemnity and insurance
obligations of Buyer set forth in Paragraph 7(a)(i)(A) above and
the covenants of Buyer set forth in Paragraph 22(a) below shall
survive any such termination.
(iii) Seller's Obligations. As of the Close of Escrow,
Seller shall have performed all of the obligations required to
be performed by Seller under this Agreement.
(iv) Estoppel Certificates. Buyer shall have received an
estoppel certificate (individually, an "Estoppel Certificate"
and collectively, the "Estoppel Certificates") duly executed by
one hundred percent (100%) of the Tenants at KW (exclusive of
the Xxxxxxxxx Parties and any renters at the RV Storage
Facility), one
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hundred percent (100%) of the Tenants at KBC-Irvine, eighty
percent (80%) of the Tenants at KBC-Tustin (exclusive of any
renters in the Mini Warehouse), seventy-five percent (75%) of
the Tenants at KBC-Santa Fe Springs and seventy-five percent
(75%) of the Tenants at KBC-Garden Grove, and dated not earlier
than thirty (30) days prior to the expiration of the Contingency
Period. The Estoppel Certificates shall be in the form of, and
upon the terms contained in, Exhibit "C" attached hereto, with
such modifications for each Tenant as may be requested by Seller
and reasonably approved by Buyer. Seller shall deliver the
original executed Estoppel Certificates to Buyer no later than
five (5) days prior to the expiration of the Contingency Period.
In the event that Seller has been unable to obtain the requisite
number of Estoppel Certificates by five (5) days prior to the
expiration of the Contingency Period, Seller shall have the
right, but not the obligation, to extend from time to time the
expiration of the Contingency Period and the Close of Escrow
until the Estoppel Certificates have been obtained, provided
that the expiration of the Contingency Period and the Close of
Escrow shall in no event be extended for more than thirty (30)
days. Buyer's failure to disapprove the Estoppel Certificates in
writing prior to the expiration of the Contingency Period shall
be deemed to constitute Buyer's approval thereof. As set forth
above, Buyer acknowledges and agrees that Seller shall not
provide nor be obligated to provide Buyer with estoppel
certificates from the renters at the Mini Warehouse, the renters
at the RV Storage Facility or the Xxxxxxxxx Parties.
Seller shall use its commercially reasonable efforts to
obtain the Estoppel Certificates from the requisite number of
Tenants described above. Such commercially reasonable efforts
shall not be construed to require Seller to threaten or initiate
litigation, grant any concession or pay any consideration.
Seller shall provide Seller's own, separate certificate
to Buyer (individually, a "Seller's Certificate" and
collectively, the "Seller's Certificates") to the extent that
Estoppel Certificates obtained from Tenants at KBC-Garden Grove
are less than one hundred percent (100%) of the Tenants at
KBC-Garden Grove, and to the extent that Estoppel Certificates
obtained from Tenants at KBC-Santa Fe Springs are less than one
hundred percent (100%) of the Tenants at KBC-Santa Fe Springs,
and Buyer agrees to accept such Seller's Certificates; provided,
however, that Buyer shall not be obligated to accept or approve
any Seller's Certificate if Buyer has reason to believe any
statement contained therein would be disputed or denied by the
applicable Tenant; and, provided further, that Buyer shall not
be obligated to accept or approve Seller's Certificates
representing more than twenty-five percent (25%) of the Tenants
at KBC-Garden Grove and more than twenty-five (25%) of the
Tenants at KBC-Santa Fe Springs. Seller shall not be obligated
to provide, and Buyer shall not be obligated to accept or
approve Seller's Certificates for any Tenants at KW, KBC-Irvine
and KBC-Tustin. The form of the Seller's Certificate is attached
hereto as Exhibit "D". The Seller's Certificate(s) shall survive
the Close of Escrow for a period of one (1) year. In the event a
conflict arises as a result of any misstatement in a Seller's
Certificate(s), Buyer and Seller acknowledge and agree that the
maximum amount which Buyer can recover
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from Seller as damages for all such misstatement(s) is the sum
of One Hundred Thousand Dollars ($100,000)in the aggregate. If
an Estoppel Certificate's obtained after the expiration of the
Contingency Period, the Estoppel Certificate shall replace the
Seller's Certificate to the extent they are not inconsistent,
and Seller shall not have obligations or liabilities under the
Seller's Certificate to the extent that it is so replaced. Buyer
agrees that it will use its commercially reasonable efforts to
obtain the Estoppel Certificates from the Tenants, if the
requisite number of Tenants fail to deliver the same prior to
the expiration of the Contingency Period.
(v) Ground Lease Estoppel Certificates. Buyer shall have
received an estoppel certificate from the ground lessor of the
KBC-Tustin Ground Lease dated not earlier than thirty (30) days
prior to the expiration of the Contingency Period, the ground
lessor under the Master Lease, dated not earlier than thirty
(30) days prior to the expiration of the Contingency Period and
the ground sublessor of the KW Sublease, dated not earlier than
thirty (30) days prior to the expiration of the Contingency
Period. Said estoppel certificates shall be in the form attached
hereto as Exhibit "Q" (collectively, the "Ground Lease Estoppel
Certificates"). Seller shall deliver the executed Ground Lease
Estoppel Certificates to Buyer no later than five (5) days prior
to the expiration of the Contingency Period. In the event Seller
has been unable to obtain the Ground Lease Estoppel Certificates
five (5) days prior to the expiration of the Contingency Period,
Seller shall have the right, but not the obligation, to extend
from time to time the expiration of the Contingency Period and
the Close of Escrow; provided that the expiration of the
Contingency Period and the Close of Escrow shall in no event be
extended more than thirty (30) days. Buyer's failure to
disapprove the Ground Lease Estoppel Certificates in writing
prior to the expiration of the Contingency Period shall be
deemed to constitute Buyer's approval thereof. Seller shall use
commercially reasonable efforts to obtain the Ground Lease
Estoppel Certificates; provided, however, in no event shall
Seller be required to threaten or initiate litigation or pay any
consideration. In the event Seller cannot obtain the Ground
Lease Estoppel Certificate(s), Seller may, but shall not be
obligated, to provide its own, separate certificate to Buyer;
provided, however, that Buyer shall not be obligated to accept
or approve any Seller's Ground Lease Estoppel Certificate if
Buyer has reason to believe any statement contained therein
would be disputed or denied by the ground lessor or the ground
sublessor, as applicable. The form of Seller's Ground Lease
Estoppel Certificate is attached hereto as Exhibit "R". The
Seller's Ground Lease Estoppel Certificate shall survive the
Close of Escrow for a period of one (1) year. If a Ground Lease
Estoppel Certificate is obtained after the expiration of the
Contingency Period, the Ground Lease Estoppel Certificate shall
replace the Seller's Ground Lease Estoppel Certificate to the
extent it is not inconsistent, and Seller shall not have
obligations or liabilities under the Seller's Ground Lease
Estoppel Certificate to the extent that it is so replaced. Buyer
agrees that it will use its commercially reasonable efforts to
obtain the Ground Lease Estoppel Certificates from the ground
lessor and/or ground sublessor if the
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Ground Lease Estoppel Certificate(s) are not delivered prior to
the expiration of the Contingency Period.
(vi) All of Seller's representations and warranties
contained in or made pursuant to this Agreement shall have been
true and correct when made, and Seller shall have executed and
delivered to Buyer Seller's Closing Certificate ("Closing
Certificate") representing that all such representations and
warranties are true and correct as of the Close of Escrow.
(vii) Seller shall have provided Buyer with updated Rent
Rolls at least three (3) business days prior to Closing, which
updated Rent Rolls must not indicate any material adverse change
from the Rent Rolls last approved by Buyer.
(viii) There shall have been no material adverse change
in or addition to the information or items reviewed and approved
by Buyer during the Contingency Period.
(ix) 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 the rights to terminate this Agreement
provided herein. Such expenditures of time and resources and
possible loss of opportunity by Buyer constitute adequate
consideration for Seller's remaining bound by this Agreement
(except as otherwise provided herein) notwithstanding such
termination rights in Buyer.
(b) Conditions to Seller's Obligations. For the benefit of
Seller, the Close of Escrow shall be conditioned upon the occurrence or
satisfaction (or Seller's waiver thereof, it being agreed that Seller
may waive such condition) of the conditions set forth below:
(i) KBC-Tustin Ground Lessor Agreement. On or prior to
the Close of Escrow, Xxxx-Xxxxxx shall obtain the written
agreement of the ground lessor under the KBC-Tustin Ground Lease
to the assignment of the KBC-Tustin Ground Lease to Buyer, in
the form attached to the KBC-Tustin Ground Lease Assignment. If
Xxxx-Xxxxxx does not obtain such agreement prior to the Close of
Escrow, then Xxxx-Xxxxxx may either waive this condition and
proceed with the Close of Escrow, or extend the Closing Date
until such time that the ground lessor's agreement is obtained;
provided, however, in no event shall the Closing Date be
extended more than thirty (30) days. After any such thirty (30)
day extension, Seller shall be obligated to close regardless of
whether or not such ground lessor's agreement has been obtained.
(ii) KW Ground Sublessor Agreement. On or prior to the
Close of Escrow, Xxxx-KW shall obtain the written agreement of
the ground sublessor under the KW Sublease to the assignment of
the KW Sublease to Buyer,
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in the form attached to the KW Sublease Assignment. If Xxxx-KW
does not obtain such agreement prior to the Close of Escrow,
then Xxxx-KW may either waive this condition and proceed with
the Close of Escrow, or extend the Closing Date until such time
that the ground sublessor's agreement is obtained; provided,
however, in no event shall the Closing Date be extended more
than thirty (30) days. After such thirty (30) day period, Seller
shall be obligated to close whether or not such ground
sublessor's consent has been obligated.
(iii) CIGNA Approval. Xxxx-Xxxxxx'x obligation to
perform its duties hereunder is contingent upon approval of the
transaction by all required boards and committees in accordance
with the standard policies and procedures of CIGNA Investments,
Inc. Xxxx-Xxxxxx shall seek such approvals during the period
commencing on the Opening of Escrow and ending on that day which
is twenty-one (21) days following the Opening of Escrow (the
"CIGNA Approval Date"), and will notify Buyer promptly of the
decisions of such boards and committees. If the transaction is
not approved within such period of time, then Xxxx-Xxxxxx may
terminate this Agreement as it relates to KBC-Tustin by giving
notice to Buyer in accordance with the provisions set forth
herein, whereupon (1) KBC-Tustin shall be withdrawn from the
Property to be conveyed to Buyer at the Close of Escrow, and (2)
the Purchase Price shall be adjusted to reflect the elimination
of KBC-Tustin from the Property to be conveyed to Buyer.
Xxxx-Xxxxxx'x failure to provide such notice to Buyer on or
before the CIGNA Approval Date of Xxxx-Xxxxxx'x election to
terminate this Agreement as to KBC-Tustin pursuant to this
Paragraph 7(b)(iii) shall be deemed the satisfaction of this
condition, and Xxxx-Xxxxxx shall have no further right to
terminate this Agreement as to KBC-Tustin pursuant to this
Paragraph 7(b)(iii).
(iv) As of the Close of Escrow, Buyer shall have timely
performed all of the obligations required by the terms of this
Agreement to be performed by Buyer.
(c) Conditions to Buyer's and Seller's Obligations. For the
benefit of Buyer and Seller, the Close of Escrow shall be conditioned
upon the occurrence or satisfaction (or the waiver thereof) of the
conditions set forth below:
(i) Release of Garden Grove Encumbrance. Seller and
Buyer shall have received evidence satisfactory to Seller and
Buyer that the Beneficiary has approved Buyer as the assignee of
the Garden Grove Encumbrance, that Seller shall be released from
its obligations under the Garden Grove Encumbrance, and that
Buyer shall assume any and all obligations under the Garden
Grove Encumbrance, including, but not limited to, Buyer's
payment of any assumption fees payable in connection therewith
and any prepayment penalties which may be payable upon Buyer's
subsequent prepayment of such encumbrance. In the event Seller
and Buyer do not receive satisfactory evidence of the foregoing,
then, so long as the Beneficiary has at least agreed in writing
that the transfer of KBC-Garden Grove to Buyer will not trigger
Section 3.20 of the Garden Grove Deed of
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Trust, or otherwise be a default under the Garden Grove
Encumbrance, Buyer shall nevertheless be obligated to purchase,
and Seller shall nevertheless be obligated to sell, KBC-Garden
Grove, except that Buyer shall be obligated to take title to
KBC-Garden Grove subject to, and Seller shall be obligated to
sell, the Garden Grove Encumbrance without Garden Grove being
released thereunder. Buyer hereby agrees to indemnify, protect,
defend (with counsel chosen by Seller) and hold harmless Seller,
Seller's agents and Seller's successors and assigns from and
against any and all claims, losses, liabilities and expenses,
including, reasonable attorneys' fees, suffered or incurred by
Seller by reason of any breach by Buyer from and after the Close
of Escrow of any of Buyer's obligations under the Garden Grove
Encumbrance. In addition, if Buyer is unable to assume the
Garden Grove Encumbrance without Garden Grove being released
thereunder, Buyer hereby agrees to indemnify, protect, defend
(with counsel chosen by Seller) and hold harmless Seller,
Seller's agents and Seller's successors and assigns from and
against any and all claims, losses, liabilities and expenses,
including, reasonable attorneys' fees and costs, suffered or
incurred by Seller by reason of any action or proceeding arising
out of, connected with or related to the Garden Grove
Encumbrance arising or accruing after the Close of Escrow,
including, but not limited to, Section 3.20 of the Garden Grove
Deed of Trust, entitled "Acceleration Upon Sale or Encumbrance"
and the Non-Recourse Carve Out provisions set forth in the
Garden Grove Note. Seller hereby agrees to indemnify, protect,
defend (with counsel chosen by Buyer) and hold harmless Buyer,
Buyer's agents and Buyer's successors and assigns from and
against any and all claims, losses, liabilities and expenses,
including reasonable attorneys' fees, suffered or incurred by
Buyer by reason of any breach by Seller prior to the Close of
Escrow of Seller's obligations under the Garden Grove
Encumbrance.
(ii) Assignment of Settlement Agreement. Concurrently
with the Close of Escrow, KBD shall assign to Buyer, and Buyer
shall assume from Seller, all of Seller's right, title and
interest in and to that certain License and Indemnity Agreement
dated May 19, 1997 ("License and Indemnity Agreement") by and
among KBD and Great Lakes Chemical Corporation. Buyer
acknowledges and agrees that it shall strictly comply with all
provisions of the License and Indemnity Agreement, including,
but not limited to, strict compliance with the confidentiality
provision set forth therein. The assignment of the License and
Indemnity Agreement shall be handled outside of Escrow, shall be
in writing and shall be in a form mutually acceptable to KBD and
Buyer. Buyer hereby agrees to indemnify, protect, defend (with
counsel chosen by Seller) and hold harmless KBD, KBD's agents
and KBD's successors and assigns from and against any and all
claims, losses, liabilities and expenses, including, reasonable
attorneys' fees, suffered or incurred by KBD by reason of any
breach by Buyer from and after the Close of Escrow of any of
Buyer's obligations under the License and Indemnity Agreement,
including, but not limited to, Buyer's breach of the
confidentiality provision set forth therein. Seller hereby
agrees to indemnify, protect, defend (with counsel chosen by
Buyer) and hold harmless Buyer, Buyer's agents and
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Buyer's successors and assigns from and against any and all
claims, losses, liabilities and expenses, including reasonable
attorneys' fees, suffered or incurred by Buyer by reason of any
breach of Seller prior to the Close of Escrow of Seller's
obligations under the Garden Grove Encumbrance.
8. Deposits by Seller. At least one (1) business day prior to the Close
of Escrow, Seller shall deposit or cause to be deposited with Escrow Holder the
following documents and instruments:
(a) Grant Deeds. Grant Deeds, in the form attached hereto as
Exhibit "B", duly executed by the applicable Seller entity and
acknowledged (individually, a "Grant Deed" and collectively, the "Grant
Deeds"), whereby Seller shall transfer to Buyer fee title to KBC-Irvine,
KBC-Santa Fe Springs and KBC-Garden Grove;
(b) Seller's Tax-Certificates. A certificate of non-foreign
status, for both federal and state ("Seller's Tax Certificates"), duly
executed by KBD, Garden Grove, Fagerholm, Xxxx-Xxxxxx and Xxxx-KW, as
applicable, in the form attached hereto as Exhibit "E" as to the federal
form and FTB 590 RE printed form as to the state form, completed to
indicate that no withholding is required;
(c) Leases. The original Leases in effect as of the Close of
Escrow, together with the original Tenant correspondence files for each
such Lease, if any;
(d) Tenant Lease Assignments. A Tenant Lease Assignment for each
Project (individually, an "Assignment of Leases" and collectively, the
"Tenant Lease Assignments"), duly executed by KBD, Garden Grove,
Fagerholm, Xxxx-Xxxxxx or Xxxx-KW, as applicable, in the form attached
hereto as Exhibit "F", pursuant to which each such Seller entity shall
assign to Buyer all of such entity's right, title and interest in and to
the Leases for the applicable Project;
(e) Contracts. Any and all original Contracts, if any;
(f) Assignment of Contracts and Assumption Agreements. An
Assignment of Contracts and Assumption Agreement for each Project
(individually, the "Assignment of Contracts" and collectively, the
"Contract Assignments"), duly executed by KBD, Garden Grove, Fagerholm,
Xxxx-Xxxxxx or Xxxx-KW, as applicable, in the form attached hereto as
Exhibit "G", pursuant to which each such Seller entity shall assign to
Buyer all of such entity's right, title and interest in, under and to
the Contracts for the applicable Project;
(g) KBC-Tustin Ground Lease. The original KBC-Tustin Ground
Lease and copies of all material correspondence related thereto, if any;
(h) KBC-Tustin Ground Lease Assignment. A ground lease
assignment (the "KBC-Tustin Ground Lease Assignment"), duly executed and
acknowledged by Xxxx-Xxxxxx and the ground lessor, if applicable, in the
form attached
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hereto as Exhibit "J", pursuant to which Xxxx-Xxxxxx shall assign to
Buyer all of such entity's right, title and interest in the KBC-Tustin
Ground Lease;
(i) Master Lease/KW Sublease. A copy of the Master Lease and the
original KW Sublease and copies of all material correspondence related
to the KW Sublease, if any;
(j) KW Sublease Assignment. A sublease assignment (the "KW
Sublease Assignment"), duly executed and acknowledged by Xxxx-KW and the
ground sublessor, if applicable, in the form attached hereto as Exhibit
"L", pursuant to which Xxxx-KW shall assign to Buyer all of such
entity's right, title and interest in the KW Sublease;
(k) Barn Subgroundlease. The original Barn Subgroundlease,
together with the original tenant correspondence file for such
Subgroundlease, if any;
(l) Assignment of Barn Subgroundlease. An assignment of the Barn
Subgroundlease ("Barn Assignment"), duly executed and acknowledged by
Xxxx-Xxxxxx, in the form attached hereto as Exhibit "K", pursuant to
which Xxxx-Xxxxxx shall assign to Buyer all of its right, title and
interest in the Barn Subgroundlease;
(m) Xxxx of Sale. A Xxxx of Sale ("Bills of Sale") for each
Project, duly executed, in the form attached hereto as Exhibit "H",
conveying all of each such Seller entities' right, title and interest in
and to any personal property owned by each such Seller entity which is
used exclusively in connection with the operation and/or maintenance of
each Project, including the golf cart, but excluding any office
equipment or furniture located in the property management offices;
(n) Tenant Letters. A letter for each Project signed by the
appropriate Seller entity and addressed to the Tenants of such Project
advising such Tenants of the sale of such Project to Buyer and directing
that all future rent payments and other charges are to be forwarded to
Buyer at an address to be supplied by Buyer;
(o) Seller's Certificates. If required pursuant to the terms and
provisions of Paragraph 7(a)(iv) hereof, an originally executed
Seller's Certificate(s) substantially in the form attached hereto as
Exhibit "D";
(p) Seller's Ground Lease Estoppel Certificates. If required
pursuant to the provisions of Paragraph 7(a)(v) hereof, an originally
executed Seller's Ground Lease Estoppel Certificate;
(q) Mini Warehouse Assignment. A warehouse rental agreement
assignment ("Mini Warehouse Assignment"), duly executed and acknowledged
by Xxxx-Xxxxxx, in the form attached hereto as Exhibit "M", pursuant to
which Xxxx-Xxxxxx shall assign to Buyer a1l of such entity's right,
title and interest in the Mini Warehouse Rental Agreements;
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(r) Settlement Agreement. A copy of the original Settlement
Agreement;
(s) Settlement Agreement Assignment. An assignment of the
Settlement Agreement ("Assignment of Settlement Agreement"), duly
executed by Xxxx-KW, in the form attached hereto as Exhibit "O",
pursuant to which Xxxx-KW shall assign to Buyer all such entity's right,
title and interest in the Settlement Agreement;
(t) Ground Lease Improvement Grant Deeds. Grant deeds, in the
form attached hereto as Exhibit "N", duly executed by the applicable
Seller entity and acknowledged, pursuant to which the applicable Seller
entity shall transfer to Buyer such entity's right, title and interest
in and to the improvements which are subject to the KBC-Tustin Ground
Lease and the KW Sublease, as applicable (the "Ground Lease Improvement
Grant Deeds"); and
(u) General Assignment. A general assignment for each Project
(individually, a "General Assignment" and collectively, the "General
Assignments"), in the form attached hereto as Exhibit "P", conveying
Seller's right, title and interest in warranties, guaranties and utility
deposits, if any, for each Project.
(v) Garden Grove Assumption Agreement. If applicable, an
Assignment and Assumption of the Garden Grove Note and the Garden Grove
Deed of Trust or similar agreement ("Garden Grove Assumption Agreement")
duly executed by Garden Grove, pursuant to which Buyer will assume
Garden Grove's obligations with respect to the Garden Grove Encumbrance
arising from and after the Close of Escrow.
(w) Closing Certificate. The Closing Certificate, duly executed
by Seller.
9. Deposits by Buyer. Buyer shall deposit or cause to be deposited with
Escrow Holder the Deposit which is to be applied towards the payment of the
Purchase Price and the balance of the Purchase Price in the amounts and at the
times set forth in Paragraph 3 above. In addition, Buyer shall deposit with
Escrow Holder prior to the Close of Escrow the following documents and
instruments:
(a) Tenant Lease Assignments. Counterparts of the Assignment of
Leases for each Project, duly executed by Buyer;
(b) Contract Assignments. Counterparts of the Assignment of
Contracts for each Project, duly executed by Buyer;
(c) KBC-Tustin Ground Lease Assignment. A counterpart of the
KBC-Tustin Ground Lease Assignment, duly executed and acknowledged by
Buyer;
(d) KW Sublease Assignment. A counterpart of the KW Sublease
Assignment, duly executed and acknowledged by Buyer;
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(e) Barn Assignment. A counterpart of the Barn Assignment, duly
executed and acknowledged by Buyer;
(f) Mini Warehouse Assignment. A counterpart of the Warehouse
Assignment, duly executed by Buyer;
(g) Settlement Agreement Assignment. A counterpart of the
Assignment of Settlement Agreement, duly executed by Buyer;
(h) General Assignments. Counterparts of the General
Assignments, duly executed by Buyer; and
(i) Garden Grove Assumption Agreement. A counterpart of the
Garden Grove Assumption Agreement, duly executed by Buyer.
10. Costs and Expenses. The cost of the Surveys and of the CLTA portion
of the Title Policies shall be paid by Seller and the premium and any additional
costs for the ALTA extended coverage additional to the premium for CLTA coverage
(including any costs and expenses incurred in connection with updating or
revising the Surveys and/or preparing a new survey for a Project) and the cost
of any endorsements to the Title Policies shall be paid by Buyer.
Notwithstanding anything to the contrary herein, the parties hereto acknowledge
and agree that if Buyer elects to update or revise the Surveys and/or prepare a
new survey for a Project, such election shall in no event operate to extend the
Closing Date as set forth in Paragraph 4(b). Any assumption fees and other fees
(including legal fees) payable in connection with the assumption by Buyer of the
Garden Grove Encumbrance shall be paid by Buyer. The escrow fee of Escrow Holder
shall be shared equally by Seller and Buyer. Seller shall pay all documentary
transfer taxes and recording fees payable in connection with the recordation of
the Grant Deeds, the KBC-Tustin Ground Lease Assignment, the KW Sublease
Assignment, the Barn Assignment and the Ground Lease Improvement Grant Deeds.
Buyer and Seller shall pay, respectively, the Escrow Holder's customary charges
to buyers and sellers for document drafting and miscellaneous charges. If, as a
result of no fault of Buyer or Seller, Escrow fails to close, Buyer and Seller
shall share equally all of Escrow Holder's fees and charges.
Any closing costs or other expenses incurred by Seller shall be
allocated to each Seller entity as such cost relates to that Seller entity's
Project. If it is unclear how such costs should be allocated, such cost shall be
allocated to each of the five (5) Projects by multiplying such cost by a
fraction the numerator of which is the portion of the Purchase Price allocated
to such Project and the denominator of which is the Purchase Price.
11. Prorations. The following prorations shall be made between Seller
and Buyer on the Close of Escrow, computed as of the Close of Escrow:
(a) Taxes and Assessments. Real and personal property taxes and
assessments on the Property (to the extent such taxes are not paid
directly by Rustic under the Barn Subgroundlease) shall be prorated on
the basis that Seller is responsible for (i) all such taxes for the
fiscal year of the applicable taxing authorities occurring prior to the
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"Current Tax Period" (as hereinafter defined) and (ii) that portion of
such taxes for the Current Tax Period determined on the basis of the
number of days which have elapsed from the first day of the Current Tax
Period to the Close of Escrow, inclusive, whether or not the same shall
be payable prior to the Close of Escrow. The phrase "Current Tax Period"
refers to the fiscal year of the applicable taxing authority in which
the Close of Escrow occurs. In the event that as of the Close of Escrow
the actual tax bills for the year or years in question are not available
and the amount of taxes to be prorated as aforesaid cannot be
ascertained, then rates and assessed valuation of the previous year,
with known changes, shall be used, and when the actual amount of taxes
and assessments for the year or years in question shall be determinable,
then such taxes and assessments will be reprorated between the parties
to reflect the actual amount of such taxes and assessments.
(b) Tenant Rents. Rent and other receivables under the Leases,
the Barn Subgroundlease, the Mini Warehouse Rental Agreements and the
Settlement Agreement, including, but not limited to, any pass-through
charges for real property taxes, pass through charges for common area
maintenance charges and amounts owing as percentage rent, and any rents
and other receivables (collectively, "Rents") shall be prorated as of
the Close of Escrow on the basis of a thirty (30) day month and a three
hundred sixty (360) day year and shall be accounted for as follows:
(i) Rents due and collected in the month of the Close of
Escrow shall be prorated between Buyer and Seller;
(ii) Buyer shall be entitled to all Rents and other
receivables accruing after the Close of Escrow, and Seller shall
be entitled to all Rents collected after the Close of Escrow
that were due and payable prior to the Close of Escrow; and
(iii) All Rents received by Buyer following the Close of
Escrow shall be applied against the most recently accrued rent
unless the Tenant has specified in writing that such payment
relates to a rental prior to the Close of Escrow.
Buyer covenants and agrees to use commercially reasonable
efforts in the usual course of Buyer's operation of the Property after
the Close of Escrow to collect and deliver to Seller all Rents or other
payments that were due and payable under the Leases, the Mini Warehouse
Rental Agreements, the Barn Subgroundlease and the Settlement Agreement
prior to the Close of Escrow, but Buyer shall not be obligated to
institute any lawsuit or collection procedures to collect delinquent
Rents. Buyer acknowledges and agrees that Seller retains the right after
the Close of Escrow to collect any and all delinquent Rents and other
charges due under the Leases, the Mini Warehouse Rental Agreements, the
Barn Subgroundlease and the Settlement Agreement, provided, however,
that Seller shall not take any action of any kind that would disturb a
tenant's possession or occupancy of its Premises or affect the validity
or enforceability of any Lease, the Mini Warehouse Rental Agreements,
the Barn Subgroundlease or the Settlement Agreement.
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(c) Security Deposit. Buyer shall be credited and Seller shall
be charged with any security deposits and advanced rentals in the nature
of a security deposit made by the Tenants under the Leases, by Rustic
under the Barn Subgroundlease and by the renters under the Mini
Warehouse Rental Agreements, if any.
(d) Utilities. Gas, water, electricity, heat, fuel, sewer and
other utilities and the operating expenses relating to each Project
shall be prorated as of the Close of Escrow to that extent such items
are not directly paid for by the Tenants under the Leases, by Rustic
under the Barn Subgroundlease and/or by the Xxxxxxxxx Parties under the
Settlement Agreement. Seller hereby reserves the right to receive the
return of any and all utility deposits previously made by Seller with
utility companies, and Buyer will arrange for substitute deposits as may
be required. If the parties hereto are unable to obtain final meter
readings as of the Close of Escrow then such expenses shall be estimated
as of the Close of Escrow on the prior operating history of each
Project.
(e) Ground Rents. Rents and other amounts due under the
KBC-Tustin Ground Lease and the KW Sublease (collectively, the "Ground
Rents") shall be prorated as of the Close of Escrow on the basis of a
thirty (30) day month and a three hundred sixty (360) day year and shall
be accounted for as follows: (i) Ground Rents due in the month of the
Close of Escrow shall be prorated between Buyer and Seller; (ii) Ground
Rents accruing after the Close of Escrow shall be paid by Buyer, and
(iii) Ground Rents accruing prior to the Close of Escrow shall be paid
by Seller prior to the Close of Escrow.
(f) Garden Grove Encumbrance. Accrued and unpaid interest and
all unpaid principal under the Garden Grove Note shall be credited to
Buyer at the Close of Escrow based upon the Beneficiary Statement. Upon
the Close of Escrow, title to any impound or escrow account under the
Garden Grove Encumbrance for taxes, insurance or other payments
thereunder shall be deemed assigned by Seller to Buyer and Seller shall
be credited and Buyer shall be charged with the amount in such account
as of the Close of Escrow.
(g) Leasing Costs. Any "Leasing Costs" as defined in Paragraph
13(f) shall be prorated with Buyer receiving a credit for any unpaid
Leasing Costs to which Seller is obligated to pay as set forth in
Paragraph 13(f), and with Seller receiving a credit for any paid Leasing
Costs to which Buyer is obligated to pay as set forth in Paragraph
13(f).
(h) Allocations. All credits and prorations made pursuant to
this Paragraph 11 shall be allocated to each Seller entity as such costs
relate to that Seller's Project(s). If it is unclear whether a
particular cost or credit is attributable to a particular Project or
Projects, such cost or credit shall be allocated to the Project(s) by
Seller, in Seller's sole, absolute and subjective discretion.
At least three (3) business days prior to the Close of Escrow the
parties hereto shall agree upon all of the prorations to be made and submit a
statement to the Escrow Holder
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setting forth the same. In the event that any prorations, apportionments or
computations made under this Paragraph 11 shall require final adjustment, then
the parties hereto shall make the appropriate adjustments promptly when accurate
information becomes available and either party hereto shall be entitled to an
adjustment to correct the same. Any corrected adjustment or proration will be
paid in cash to the party entitled thereto.
12. Disbursements and Other Actions by Escrow Holder. Upon the Close of
Escrow, Escrow Holder shall promptly undertake all of the following in the
manner indicated:
(a) Prorations. Prorate all matters referenced in Paragraph 11
based upon the statement delivered into Escrow signed by the parties.
(b) Recording. Cause the Grant Deeds, the KBC-Tustin Ground
Lease Assignment, the KW Sublease Assignment, the Barn Assignment and
the Ground Lease Improvement Grant Deeds and any other documents which
the parties hereto may mutually direct, to be recorded in the Official
Records in the order directed by the parties.
(c) Funds. Disburse from funds deposited by Buyer with Escrow
Holder towards payment of all items chargeable to the account of Buyer
pursuant hereto in payment of such costs, including, without limitation,
the payment of the Purchase Price to Seller, and disburse the balance of
such funds, if any, to Buyer.
(d) Title Policies. Direct the Title Company to issue the Title
Policies to Buyer.
(e) Documents to Seller. Deliver to Seller counterparts of the
Tenant Lease Assignments, the Contract Assignments, the KBC-Tustin
Ground Lease Assignment, the KW Sublease Assignment, the Barn
Assignment, the Mini Warehouse Assignment, the Assignment of Settlement
Agreement and the General Assignments, executed and acknowledged (if
necessary) by Buyer.
(f) Documents to Buyer. Deliver to Buyer the originals (or
copies, if the originals are not available) of the Leases, the
KBC-Tustin Ground Lease, the Master Lease, the KW Sublease, the Barn
Subgroundlease, the Contracts, the Settlement Agreement the Bills of
Sale, the Seller's Certificates (if any), the Seller's Ground Lease
Estoppel Certificates, if any, the Seller's Tax Certificates,
counterparts of the Tenant Lease Assignments, the Contract Assignments,
the KBC-Tustin Ground Lease Assignment, the KW Sublease Assignment, the
Barn Assignment, the Mini Warehouse Assignment, the Assignment of
Settlement Agreement and the General Assignments executed and
acknowledged (if necessary) by Seller and the letters described in
Paragraph 8(n) above addressed to each Tenant advising the Tenants of
this transaction.
(g) Reporting, Requirements. The Escrow Holder 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
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estate transaction within the purview of Section 6045 of the Internal
Revenue Code of 1986, as amended (the "Internal Revenue Code"), Escrow
Holder 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 hereof, Seller's tax
identification numbers shall be provided to Escrow Holder prior to the
Close of Escrow. Escrow Holder shall hold Buyer, Seller and their
counsel free and harmless from and against any and all liability,
claims, demands, damages and costs, including reasonable attorneys' fees
and other litigation expenses, arising or resulting from the failure or
refusal of Escrow Holder to comply with such reporting requirements.
13. Seller's Covenants, Representations and Warranties. In consideration
of Buyer entering into this Agreement and as an inducement to Buyer to purchase
the Property from Seller, Seller hereby makes the following representations and
warranties to Buyer as of the date of this Agreement, each of which is material
and being relied upon by Buyer:
(a) Authority. Seller has the legal right, power and authority
to enter into this Agreement and to consummate the transactions
contemplated hereby, and the execution, delivery and performance of this
Agreement have been duly authorized and no other action by Seller is
requisite to the valid and binding execution, delivery and performance
of this Agreement, except as otherwise expressly set forth herein.
(b) Foreign Person Affidavit. Seller is not a foreign person as
defined in Section 1445 of the Internal Revenue Code.
(c) Leases. To Seller's actual knowledge, the Leases, the
KBC-Tustin Ground Lease, the KW Sublease, the Master Lease, the Barn
Subgroundlease, and the Settlement Agreement delivered by Seller to
Buyer are complete copies of same.
(d) Contracts. To Seller's actual knowledge, except for the
Contracts delivered to Buyer, there are no service or maintenance
contracts affecting the Property.
(e) Mini Warehouse Rental Agreements. From the Opening of Escrow
until that date which is five (5) days prior to the expiration of the
Contingency Period, so long as Seller provides Buyer with prompt written
notice thereof, Seller shall have the right, but not the obligation to,
amend, renew or expand the Mini Warehouse Rental Agreements, or enter
into any new mini warehouse rental agreements in accordance with
Seller's standard practices. From the date which is five (5) days prior
to the expiration of the Contingency Period until the Close of Escrow or
expiration or earlier termination of this Agreement, Seller shall not,
without the prior written consent of Buyer (which consent will not be
unreasonably withheld or delayed), amend, renew or expand the existing
Mini Warehouse Rental Agreements or enter into any new mini warehouse
rental agreements. Buyer acknowledges and agrees that if Buyer has not
disapproved in writing any amended, renewed or expanded Mini Warehouse
Rental Agreement or any new mini warehouse rental agreement within five
(5) days of receiving copies of same, then Buyer shall be deemed to have
approved same.
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(f) Leases. From the Opening of Escrow until that date which is
five (5) days prior to the expiration of the Contingency Period, Seller
shall (1) have the right, but not the obligation, without obtaining
Buyer's consent, to amend, renew, or expand the Leases, the Barn
Subgroundlease, the KBC-Tustin Ground Lease and the KW Sublease or enter
into any new leases in accordance with Seller's standard practices (so
long as Seller promptly provides Buyer with a complete and accurate copy
thereto) when Seller shall be responsible for all leasing commissions
and the tenant improvement allowance and costs (collectively, "Leasing
Costs") in connection therewith; and (2) shall have the right, but not
the obligation, to amend, renew or expand the existing Leases or enter
into any new leases, after obtaining Buyer's prior written consent (or
such consent has been deemed given), which consent shall not be
unreasonably withheld, when Buyer shall be responsible for any of the
Leasing Costs in connection therewith. Buyer acknowledges and agrees
that if it has not disapproved in writing any amended, renewed, or
expanded Leases, or any new lease within five (5) days of receiving same
(when such approval is necessary), then Buyer shall be deemed to have
approved same. For purposes of this Paragraph 13(f), Seller shall be
responsible for the Leasing Costs when any amended, renewed or expanded
Lease and/or any new lease does not result in the net effective rent for
all rentable space in such Project being increased to a level that
exceeds the net effective rent for all rentable space in such Project as
shown on the Rent Roll for such Project as of the Opening of Escrow, and
Buyer and Seller shall be responsible for their pro rata share of the
Leasing Costs when any amended, renewed or expanded Lease and/or new
lease does result in the net effective rent for all rentable space in
such Project being increased to a level that exceeds the net effective
rent as shown on the Rent Roll for such Project as of the Opening of
Escrow. For purposes hereof, Buyer's pro rata share shall be determined
by multiplying the amount of the Leasing Costs by a fraction, the
numerator of which shall be the number of months remaining after the
Close of Escrow on the term of the applicable Lease and the denominator
of which shall be the total number of months on the applicable term of
the Lease (exclusive of any unexercised options to renew or extend the
term); and by further multiplying such number by a fraction, the
numerator of which is the portion of the net effective rent under such
Lease which represents an increase in the net effective rent for all
rentable space in the Project as shown on the Rent Roll for such Project
as of the Opening of Escrow and the denominator of which is the entire
net effective rent for such Lease; and Seller's pro rata share shall be
the balance thereof. From the date which is five (5) days prior to the
expiration of the Contingency Period until the Close of Escrow, or the
expiration or earlier termination of this Lease, Seller shall not amend,
renew, or expand any Lease or enter into any new lease without obtaining
the prior written consent of Buyer. Notwithstanding Buyer's approval
rights after the expiration of the Contingency Period, the parties
hereto acknowledge and agree that the Leasing Costs shall continue to be
allocated as set forth herein.
(g) Documents. To Seller's actual knowledge, all documents
delivered by Seller to Buyer, or made available to Buyer for review,
including without limitation the Documents and Materials, are true and
complete copies thereof.
(h) Litigation. To Seller's actual knowledge, there are no
litigation, arbitration or reference proceedings pending and Seller has
not received any notice of any
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threatened action or proceeding against any of the Projects or against
any Seller with respect to any Project.
(i) Bankruptcy. Neither Seller nor, to Seller's actual
knowledge, any tenant of the Property has either filed or been the
subject of any filing of a petition under any federal or state
bankruptcy or insolvency laws.
(j) Rent Rolls. To Seller's knowledge, the most current Rent
Rolls provided to Buyer are complete and accurate actual lists of all
Leases. To Seller's actual knowledge, Seller has provided to Buyer
complete and accurate copies of all Leases, the Settlement Agreement,
the KBC-Tustin Ground Lease, the Master Lease, the KW Sublease, the
License and Indemnity Agreement and the documents relating to the Garden
Grove Encumbrance.
(k) Options. To Seller's actual knowledge, Seller has not
granted any option or right of first refusal or first opportunity to any
party to acquire any interest in any of the Property.
(l) Possession. To Seller's actual knowledge, possession of the
Property shall be delivered by Seller to Buyer on the Closing Date.
(m) Maintenance Covenant. Between the Seller's and Buyer's
execution and delivery of this Agreement and the Close of Escrow, Seller
shall maintain the Property and its insurance coverages in accordance
with Seller's normal standards as if Seller were retaining the Property.
After full execution of this Agreement and until the Close of Escrow,
Seller shall maintain all existing personnel of Seller on the Property
in their current employment positions. Without limiting the
effectiveness of the foregoing provisions, Buyer shall not retain the
existing employees of Seller and upon the Close of Escrow Seller shall
cause all such employees to vacate from the Property. In addition,
notwithstanding anything herein to the contrary, Buyer will not assume
and Seller shall terminate as of the Close of Escrow, any existing
property management and listing contracts relating to the Property.
For purposes of this Agreement, to "Seller's actual knowledge" means the
actual, present knowledge (as opposed to constructive or imputed knowledge) of
Xxxxxxx Xxxxxxxx as of the date of this Agreement, without any investigation or
inquiry of any kind or nature whatsoever.
The warranties and representations of Seller contained in this Paragraph
13 shall survive for a period of one (1) year following the Close of Escrow. No
claim, suit or action may be brought by Buyer against Seller arising from or
relating to the representations and warranties contained in this Agreement
unless (i) the suit or action is properly filed and served no later than one (l)
year after the Close of Escrow, or (ii) a written notice describing the claim in
detail is delivered to Seller no later than one (1) year after the Close of
Escrow and a suit or action is filed and served on Seller no later than three
(3) months following delivery of the notice.
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14. Buyer's Covenants, Representations and Warranties. In consideration
of Seller entering into this Agreement and as an inducement to Seller to sell
the Property to Buyer, Buyer makes the following covenants, representations and
warranties, each of which is material and is being relied upon by Seller:
(a) Authority. Buyer has the legal right, power and authority to
enter into this Agreement and to consummate the transactions
contemplated hereby, and the execution, delivery and performance of this
Agreement have been duly authorized and no other action by Buyer is
requisite to the valid and binding execution, delivery and performance
of this Agreement, except as otherwise expressly set forth herein.
(b) Seller's Environmental Inquiry. Section 25359.7 of the
California Health and Safety Code requires owners of nonresidential
property who know or have reasonable cause to believe that any release
of hazardous substance has come to be located on or beneath real
property to provide written notice of that condition to a buyer of such
real property. There is a possibility that a release of a hazardous
substance may have come to be located on or beneath the Property,
including the release, if any, of such hazardous substances described in
the environmental reports described in Exhibit "I" attached hereto (the
"Environmental Reports"). By its execution of this Agreement, Buyer (1)
acknowledges its receipt of the foregoing notice given pursuant to
Section 25359.7 of the California Health and Safety Code and that it is
aware of the benefits conferred to Buyer by Section 1542 of the
California Civil Code and the risks it assumes by any waiver of its
benefits thereunder; (2) is fully aware of the matters described in the
Environmental Reports, copies of which Buyer has reviewed or will have
reviewed prior to the Close of Escrow; and (3) after receiving advice of
its legal counsel, waives any and all rights or remedies whatsoever,
express or implied, Buyer may have against Seller, including remedies
for actual damages, resulting from any unknown, unforeseen or
unanticipated presence or releases of hazardous substances from or on
the Property. The provisions of this paragraph shall survive the Close
of Escrow and shall not be deemed merged into the Grant Deeds, the
KBC-Tustin Ground Lease Assignment, the KW Sublease Assignment and the
Ground Lease Improvement Grant Deeds upon their recordation.
(c) As Is. Except as otherwise expressly set forth herein, Buyer
is acquiring the Property "AS IS" without any representation or warranty
of Seller, express, implied or statutory, as to the nature or condition
of or title to the Property or its fitness for Buyer's intended use of
same. Buyer is, or as of the expiration of the Contingency Period will
be, familiar with the Property. Buyer is relying solely upon, and as of
the expiration of the Contingency Period will have conducted, its own,
independent inspection, investigation and analysis of the Property as it
deems necessary or appropriate in so acquiring the Property from Seller,
including, without limitation, an analysis of any and all matters
concerning the condition of the Property and its suitability for Buyer's
intended purposes, and a review of all applicable laws, ordinances,
rules and governmental regulations (including, but not limited to, those
relative to building, zoning and land use) affecting the development,
use, occupancy or enjoyment of the Property.
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Without limiting the generality of the foregoing, except for the
future acts of Seller, Buyer hereby expressly waives and relinquishes
any and all rights and remedies Buyer may now or hereafter have against
Seller, whether known or unknown, with respect to any past, present or
future presence or existence of "Hazardous Materials" (as herein
defined) on, under or about the Property or with respect to any past,
present or future violations of any rules, regulations or laws, now or
hereafter enacted, regulating or governing the use, handling, storage or
disposal of Hazardous Materials, including, without limitation, (i) any
and all rights Buyer may now or hereafter have to seek contribution from
Seller under Section 113(f)(i) of the Comprehensive Environmental
Response Compensation and Liability Act of 1980 ("CERCLA"), as amended
by the Superfund Amendments and Reauthorization Act of 1986 (42 U.S.C.A
Section 9613), as the same may be further amended or replaced by any
similar law, rule or regulation, (ii) any and all rights Buyer may now
or hereafter have against Seller under the Xxxxxxxxx-Xxxxxxx-Xxxxxx
Hazardous Substance Account Act (California Health and Safety Code,
Section 25300 et seq.), as the same may be further amended or replaced
by any similar law, rule or regulation, (iii) any and all claims,
whether known or unknown, now or hereafter existing, with respect to the
Property under Section 107 of CERCLA (42 U.S.C.A. Section 9607) and (iv)
any and all claims Buyer may now or hereafter have against Seller,
whether known or unknown, now or hereafter existing, based on nuisance,
trespass or any other common law or statutory provisions. As used
herein, the term "Hazardous Material(s)" includes, without limitation,
any hazardous or toxic materials, substances or wastes, such as (A)
those materials identified in Sections 66680 through 66685 and Sections
66693 through 66740 of Title 22 of the California Administrative Code,
Division 4, Chapter 30, as amended from time to time, (B) those
materials defined in Section 25501(j) of the California Health and
Safety Code, (C) any materials, substances or wastes which are toxic,
ignitable, corrosive or reactive and which are regulated by any local
governmental authority, any agency of the state of California or any
agency of the United States Government, (D) asbestos, (E) petroleum and
petroleum based products, (F) urea formaldehyde foam insulation, (G)
polychlorinated biphenyls (PCBs), and (H) freon and other
chlorofluorocarbons.
BUYER HEREBY ACKNOWLEDGES THAT IT HAS READ AND IS FAMILIAR WITH
THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542 ("SECTION 1542"),
WHICH IS SET FORTH BELOW:
"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."
BY INITIALING BELOW, BUYER HEREBY WAIVES THE PROVISIONS OF
SECTION 1542 SOLELY IN CONNECTION WITH THE MATTERS WHICH ARE THE
SUBJECT OF THE FOREGOING WAIVERS AND RELEASES:
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----------------
Buyer's Initials
The waivers and releases by Buyer herein contained shall survive
the Close of Escrow and the recordation of the Grant Deeds, the
KBC-Tustin Ground Lease Assignment, the KW Sublease Assignment, the Barn
Assignment and the Ground Lease Improvement Grant Deeds and shall not be
deemed merged into the Grant Deed, the KBC-Tustin Ground Lease
Assignment, the KW Sublease Assignment, the Barn Assignment and the
Ground Lease Improvement Grant Deeds upon their recordation.
(d) Limitation on Seller's Liability. Buyer agrees that Seller
shall not have any liability, obligation or responsibility of any kind
to Buyer with respect to the following:
(i) The content or accuracy of any report, study,
opinion or conclusion of any soils, toxic, environmental or
other engineer or other person or entity who has examined the
Property or any aspect thereof,
(ii) The content or accuracy of any information released
to Buyer by an engineer or planner in connection with the
development of the Property;
(iii) The availability of building or other permits or
approvals for the Property by any state or local governmental
bodies with jurisdiction over the Property;
(iv) The availability or capacity of sewer, water or
other utility connections to the Property;
(v) Any of the items delivered to Buyer pursuant to
Buyer's review of the condition of the Property; and
(vi) The content or accuracy of any other development or
construction cost, projection, financial or marketing analysis
or other information given to Buyer by Seller or reviewed by
Buyer with respect to the Property.
(e) Assumption of Garden Grove Encumbrance. Buyer covenants and
agrees that upon the Close of Escrow, Buyer shall assume the Garden
Grove Encumbrance in accordance with the terms and provisions set forth
herein.
15. LIQUIDATED DAMAGES. IF BUYER COMMITS A DEFAULT UNDER THIS AGREEMENT,
THEN IN ANY SUCH EVENT, THE ESCROW HOLDER MAY BE INSTRUCTED BY SELLER TO CANCEL
THE ESCROW AND SELLER SHALL THEREUPON BE RELEASED FROM ITS OBLIGATIONS
HEREUNDER. BUYER AND SELLER AGREE THAT BASED UPON THE CIRCUMSTANCES NOW
EXISTING, KNOWN AND UNKNOWN, IT WOULD BE IMPRACTICAL OR EXTREMELY DIFFICULT TO
ESTABLISH SELLER'S DAMAGE BY REASON OF BUYER'S DEFAULT UNDER THIS
-28-
37
AGREEMENT. ACCORDINGLY, BUYER AND SELLER AGREE THAT IN THE EVENT OF DEFAULT BY
BUYER UNDER THIS AGREEMENT, IT WOULD BE REASONABLE AT SUCH TIME TO AWARD SELLER,
AS SELLER'S SOLE AND EXCLUSIVE REMEDY AT LAW, "LIQUIDATED DAMAGES" EQUAL TO THE
AMOUNT REPRESENTED BY THE DEPOSIT (AS DEFINED IN PARAGRAPH 3(a) HEREOF) PLUS ANY
AND ALL ACCRUED INTEREST THEREON.
THEREFORE, IF BUYER COMMITS A DEFAULT UNDER THIS AGREEMENT, SELLER MAY
INSTRUCT THE ESCROW HOLDER TO CANCEL THE ESCROW WHEREUPON ESCROW HOLDER SHALL
IMMEDIATELY PAY OVER TO SELLER THE DEPOSIT, IF HELD BY ESCROW HOLDER, TOGETHER
WITH ALL INTEREST ACCRUED THEREON, AND SELLER SHALL BE RELIEVED FROM ALL
OBLIGATIONS AND LIABILITIES HEREUNDER, AND, PROMPTLY FOLLOWING ESCROW HOLDER'S
RECEIPT OF SUCH INSTRUCTION, ESCROW HOLDER SHALL CANCEL THE ESCROW.
NOTHING IN THIS PARAGRAPH 15 SHALL (i) PREVENT OR PRECLUDE ANY RECOVERY
OF ATTORNEYS' FEES OR OTHER COSTS INCURRED BY SELLER PURSUANT TO PARAGRAPH 20
HEREOF OR (ii) IMPAIR OR LIMIT THE EFFECTIVENESS OR ENFORCEABILITY OF THE
INDEMNIFICATION OBLIGATIONS OF BUYER CONTAINED IN PARAGRAPH 7(a)(i)(A) HEREOF.
SELLER AND BUYER ACKNOWLEDGE THAT THEY HAVE READ AND UNDERSTAND THE PROVISIONS
OF THIS PARAGRAPH 15 AND BY THEIR INITIALS IMMEDIATELY BELOW AGREE TO BE BOUND
BY ITS TERMS.
[SIG]
-------------------------- ---------------------------
Xxxx-Xxxxxx'x Initials Buyer's Initials
-------------------------- ---------------------------
Xxxx-KW's Initials Garden Grove's Initials
-------------------------- ---------------------------
KBD's Initials Fagerholm's Initials
16. INTENTIONALLY OMITTED.
17. Damage or Condemnation Prior to Closing. Seller shall promptly
notify Buyer of any casualty to the Property or any condemnation proceeding
commenced prior to the Close of Escrow. If any such damage or proceeding relates
to or may result in the loss of any material portion of a Project(s), Seller or
Buyer may, at their option, elect either to: (i) terminate this Agreement as it
relates to such Projects, in which event such Project(s) shall be withdrawn from
the Property to be conveyed to Buyer at the Close of Escrow, and the Purchase
Price shall be adjusted to reflect the elimination of such Project(s) to be
conveyed to Buyer, or (ii) continue the Agreement in effect. In the event Buyer
elects to continue the Agreement or in the event any damage or proceeding
relates to or may result in the loss of a non-material portion of a Project(s),
then upon the Close of Escrow, Buyer shall be entitled to and Seller shall
assign to Buyer at the Close of Escrow any compensation, awards, or other
payments or relief resulting from such casualty or condemnation proceeding
relating to the Property to which Seller is entitled to receive
-29-
38
or to which Seller has received (subject to the provisions of the KBC-Tustin
Ground Lease and the KW Sublease) and there shall be no adjustment to the
Purchase Price, except that in the case of a casualty Buyer shall receive a
credit toward the Purchase Price for any cost of repair not covered by Seller's
casualty insurance; provided, however, that such credit shall not include any
business interruption or rental loss insurance proceeds attributable to the
period prior to the Close of Escrow to which Seller is entitled to retain. For
purposes hereof, the term "material portion of a Project" shall mean any portion
of a Project, the reasonable cost of repair or replacement of which exceeds Five
Hundred Thousand Dollars ($500,000.00).
18. Notices. All notices or other communications required or permitted
hereunder shall be in writing, and shall be personally delivered or sent by
registered or certified mail, postage prepaid, return receipt requested,
telegraphed, delivered or sent by telex, telecopy or cable and shall be deemed
received upon the earlier of (i) if personally delivered, the date of delivery
to the address of the person to receive such notice, (ii) if mailed, three (3)
business days after the date of posting by the United States post office, (iii)
if given by telegraph or cable, when delivered to the telegraph company with
charges prepaid, or (iv) if given by telex or telecopy, when sent. Any notice,
request, demand, direction or other communication sent by cable, telex or
telecopy must be confirmed within forty-eight (48) hours by letter mailed or
delivered in accordance with the foregoing.
To Seller: c/o Xxxxxxx X. Xxxxxxxx & Associates
000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
With a copy to: Allen, Matkins, Xxxx, Xxxxxx & Xxxxxxx LLP
00000 Xxx Xxxxxx, Xxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
To Buyer: Pacific Gulf Properties Inc.
0000 Xxx Xxxxxx, Xxxxxx Xxxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xx. Xxxxxx X. Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
-30-
39
With a copy to: Xxx, Castle & Xxxxxxxxx, LLP
0000 Xxxxxxx Xxxx Xxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxx, Esq.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
To Escrow Holder: Fidelity National Title Insurance Company
0000 Xxxxx Xxx Xxxx Xxxxxx, Xxxxx 000
Xxxxx Xxx, Xxxxxxxxxx 00000
Attention: Xx. Xxxxx Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Notice of change of address shall be given by written notice in the manner
detailed in this Paragraph 18. Rejection or other refusal to accept or the
inability to deliver because of changed address of which no notice was given
shall be deemed to constitute receipt of the notice, demand, request or
communication sent.
19. Brokers. Upon the Close of Escrow, Seller shall pay a real estate
brokerage commission to CB Commercial Real Estate Group, Inc. with respect to
this transaction in accordance with Seller's separate agreement with said broker
and Seller hereby agrees to indemnify and hold Buyer free and harmless from such
commission obligations. If any additional claims for brokers' or finders' fees
for the consummation of this Agreement arise, then Buyer hereby agrees to
indemnify, save harmless and defend Seller from and against such claims if they
shall be based upon any statement or representation or agreement by Buyer, and
Seller hereby agrees to indemnify, save harmless and defend Buyer if such claims
shall be based upon any statement, representation or agreement made by Seller.
20. Legal Fees. In the event of the bringing of any action or suit by a
party hereto against another party hereunder by reason of any breach of any of
the covenants or agreements or any inaccuracies in any of the representations
and warranties on the part of the other party arising out of this Agreement,
then in that event, the prevailing party in such action or dispute, whether by
final judgment, or out of court settlement shall be entitled to have and recover
of and from the other party all costs and expenses of suit, including actual
attorneys' fees. Any judgment or order entered in any final judgment shall
contain a specific provision providing for the recovery of all costs and
expenses of suit, including actual attorneys' fees (collectively "Costs")
incurred in enforcing, perfecting and executing such judgment. For the purposes
of this paragraph, Costs shall include, without limitation, attorneys' fees,
costs and expenses incurred in the following: (i) postjudgment motions; (ii)
contempt proceeding; (iii) garnishment, levy, and debtor and third party
examination; (iv) discovery; and (v) bankruptcy litigation.
21. Assignment. Buyer shall not assign, transfer or convey its rights
and/or obligations under this Agreement and/or with respect to the Property
without the prior written consent of Seller, which consent Seller may withhold
in its sole, absolute and subjective
-31-
40
discretion. Any attempted assignment without the prior written consent of Seller
shall be void and Buyer shall be deemed in default hereunder. Any permitted
assignments shall not relieve the assigning party from its liability under this
Agreement.
22. Miscellaneous.
(a) Confidentiality. Buyer acknowledges that it shall be bound
by the confidentiality terms and provisions of that certain Entry Permit
dated as of March 25, 1998, and that certain Confidentiality Letter
Agreement dated March 4, 1998.
(b) Survival of Covenants. The covenants, representations and
warranties of Buyer set forth in this Agreement shall survive the
recordation of the Grant Deeds, the KBC-Tustin Ground Lease Assignment,
the KW Sublease Assignment, the Barn Assignment and the Ground Lease
Improvement Grant Deeds and the Close of Escrow and shall not be deemed
merged into the Grant Deeds, the KBC-Tustin Ground Lease Assignment, the
KW Sublease Assignment, the Barn Assignment and the Ground Lease
Improvement Grant Deeds upon their recordation.
(c) Required Actions of Buyer and Seller. Buyer and Seller agree
to execute such instruments and documents and to diligently undertake
such actions as may be required in order to consummate the purchase and
sale herein contemplated and shall use good faith efforts to accomplish
the Close of Escrow in accordance with the provisions hereof.
(d) Time of Essence. Time is of the essence of each and every
term, condition, obligation and provision hereof. All references herein
to a particular time of day shall be deemed to refer to Los Angeles,
California time.
(e) Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but all of
which, together, shall constitute one and the same instrument.
(f) Captions. Any captions to, or headings of, the paragraphs or
subparagraphs of this Agreement are solely for the convenience of the
parties hereto, are not a part of this Agreement, and shall not be used
for the interpretation or determination of the validity of this
Agreement or any provision hereof.
(g) No Obligations to Third Parties. Except as otherwise
expressly provided herein, the execution and delivery of this Agreement
shall not be deemed to confer any rights upon, nor obligate any of the
parties thereto, to any person or entity other than the parties hereto.
(h) Exhibits. The Exhibits attached hereto are hereby
incorporated herein by this reference for all purposes.
-32-
41
(i) Amendment to this Agreement. The terms of this Agreement may
not be modified or amended except by an instrument in writing executed
by each of the parties hereto.
(j) Waiver. The waiver or failure to enforce any provision of
this Agreement shall not operate as a waiver of any future breach of any
such provision or any other provision hereof.
(k) Applicable Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of
California.
(l) Fees and Other Expenses. Except as otherwise provided
herein, each of the parties shall pay its own fees and expenses in
connection with this Agreement.
(m) Entire Agreement. This Agreement supersedes any prior
agreements, negotiations and communications, oral or written, and
contains the entire agreement between Buyer and Seller as to the subject
matter hereof. No subsequent agreement, representation, or promise made
by either party hereto, or by or to an employee, officer, agent or
representative of either party shall be of any effect unless it is in
writing and executed by the party to be bound thereby.
(n) Partial Invalidity. If any portion of this Agreement as
applied to either party or to any circumstances shall be adjudged by a
court to be void or unenforceable, such portion shall be deemed severed
from this Agreement and shall in no way effect the validity or
enforceability of the remaining portions of this Agreement.
(o) Successors and Assigns. Subject to the provisions of
Paragraph 21 hereof, this Agreement shall be binding upon and shall
inure to the benefit of the successors and assigns of the parties
hereto.
(p) Business Days. In the event any date described in this
Agreement relative to the performance of actions hereunder by Buyer,
Seller and/or Escrow Holder falls on a Saturday, Sunday or legal
holiday, such date shall be deemed postponed until the next business day
thereafter.
(q) Submission of Agreement. Submission of this Agreement to
Buyer for examination or signature does not constitute a reservation,
right or option to purchase the Property, and will not be effective as a
binding purchase and sale agreement or otherwise until full execution by
and delivery to both Buyer and Seller.
23. Exchange. Buyer acknowledges that Seller may engage in a
tax-deferred exchange ("Exchange") pursuant to Section 1031 of the Internal
Revenue Code. To effect the Exchange, Seller may assign its rights in, and
delegate its duties under, this Agreement, as well as transfer the Property, to
its constituent partners and/or an exchange accommodator which Seller shall
determine. As an accommodation to Seller, Buyer agrees to cooperate with Seller
in connection with the Exchange, including the execution of documents therefor,
provided the following terms and conditions are satisfied:
-33-
42
(a) There shall be no liability to Buyer and Buyer shall have no
obligation to take title to any property in connection with the
Exchange;
(b) Buyer shall in no way be obligated to pay any escrow costs,
brokerage commissions, title charges, survey costs, recording costs or
other charges incurred with respect to any exchange property and/or the
Exchange;
(c) In no way shall the Close of Escrow be contingent or
otherwise subject to the consummation of the Exchange, and the Escrow
shall timely close in accordance with the terms of this Agreement
notwithstanding any failure, for any reason, of the parties to the
exchange to effect same;
(d) If, for any reason, the Close of Escrow does not occur,
Buyer shall have no responsibility or liability to any third party
involved in the exchange transaction;
(e) Buyer will not be required to make any representations or
warranties nor assume any obligations, nor spend any sum or incur any
personal liability whatsoever in connection with the exchange
transaction contemplated by this Paragraph 23; and
(f) The Exchange shall not release Seller from any
representation, warranty or covenant of Seller or diminish any right or
remedy of Buyer with respect to Seller.
24. Buyer is qualified as a real estate investment trust under the
provisions of the Internal Revenue Code of 1986, as amended. Maintaining such
status and avoiding any activity which might cause a penalty tax to be applied
is of material concern to Buyer. Accordingly, Seller agrees to make any
reasonable modifications or amendments to this Agreement requested by Buyer
prior to expiration of the Contingency Period 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 alter or affect
Seller's rights, duties or obligations under this Agreement in more than an
insignificant manner, in Seller's sole, absolute and subjective discretion.
-34-
43
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first written above.
"Buyer" PACIFIC GULF PROPERTIES INC.,
a Maryland corporation
By: /s/ XXXXXX X. XXXXXXX
-------------------------------------
Print Name: Xxxxxx X. Xxxxxxx
-------------------------
Print Title: EVP
------------------------
By: [SIG]
-------------------------------------
Print Name: ??????
-------------------------
Print Title: SVP
-------------------------
"KBD" KBD PARTNERS,
a California general partnership
By:
--------------------------------------
Xxxxxxx X. Xxxxxxx
Its: Partner
By:
--------------------------------------
Xxxxx X. Xxxxxxxxx
Its: Partner
"Garden Grove" GARDEN GROVE ASSOCIATES,
a California general partnership
By: KBD Partners,
a California general partnership
Its: Managing General Partner
By:
----------------------------------
Xxxxxxx X. Xxxxxxx
Its: Partner
By:
----------------------------------
Xxxxx X. Xxxxxxxxx
Its: Partner
[SIGNATURES CONTINUED ON NEXT PAGE]
-35-
44
"Xxxxxxxxx" XXXXXXXXX FAMILY PARTNERS, L.P.,
a Washington limited partnership
By: The Xxxxxxxxx Company,
a Washington corporation
Its: Sole General Partner
By:
---------------------------------
Xxxxx Xxxxxxxxx
Its: President
"Xxxx-Xxxxxx" XXXX TUSTIN BUSINESS CENTER, LTD.,
a California limited partnership
By: KBD Partners,
a California general partnership
Its: Sole General Partner
By:
---------------------------------
Xxxxxxx X. Xxxxxxx
Its: Partner
By:
---------------------------------
Xxxxx X. Xxxxxxxxx
Its: Partner
"Xxxx-KW" XXXX-KW, LTD,
a California limited partnership
By: KBD Partners,
a California general partnership
Its: Sole General Partner
By:
---------------------------------
Xxxxxxx X. Xxxxxxx
Its: Partner
By:
---------------------------------
Xxxxx X. Xxxxxxxxx
Its: Partner
-36-
45
ACCEPTANCE BY ESCROW HOLDER:
FIDELITY NATIONAL TITLE INSURANCE COMPANY hereby acknowledges that it
has received originally executed counterparts or a fully executed original of
the foregoing Agreement of Purchase and Sale and Joint Escrow Instructions and
agrees to act as Escrow Holder thereunder and to be bound by and perform the
terms thereof as such terms apply to Escrow Holder.
Dated:__________, 1998 FIDELITY NATIONAL TITLE
INSURANCE COMPANY
By:_____________________________________
Print Name:__________________________
Its Authorized Agent
-37-
46
LEGAL DESCRIPTION OF KBC-IRVINE
FILE NO. 63741-RD
THE LAND REFERRED TO IN THIS REPORT IS SITUATED IN THE STATE OF CALIFORNIA,
COUNTY OF ORANGE, AND IS DESCRIBED AS FOLLOWS:
Parcels 4 through 10, inclusive, in the City of Irvine, County of Orange, State
of California, as per map recorded in Book 130, Pages 46 through 49, inclusive,
of Parcel Maps, in the office of the County Recorder of said County.
EXCEPT all oil, oil rights, minerals, mineral rights, natural gas rights, and
other hydrocarbons by whatsoever name known that may be within or under the
parcel of land hereinabove described, together with the perpetual right of
drilling, mining, exploring and operating therefor and storing in and removing
the same from said land or any other land, including the right to whipstock or
directionally drill and mine from lands other than those hereinabove described,
oil or gas xxxxx, tunnels and shafts into, through or across the subsurface of
the land hereinabove described, and to bottom such whipstocked or directionally
drilled xxxxx, tunnels and shafts under and beneath or beyond the exterior
limits thereof, and to redrill, retunnel, equip, maintain, repair, deepen and
operate any such xxxxx or mines, without, however, the right to drill, mine,
store, explore and operate through the surface or the upper 500 feet of the
subsurface of the land hereinabove described, as reserved in the deed recorded
April 29, 1970 in Book 9277, Page 256, as Instrument No. 17522, of Official
Records.
ALSO EXCEPT all oil, oil rights, minerals, mineral rights, natural gas rights,
and other hydrocarbons by whatsoever name known that may be within or under the
parcel of land hereinabove described, together with the perpetual right of
drilling, mining, exploring and operating therefor and storing in and removing
the same from said land or any other land, including the right to whipstock or
directionally drill and mine from lands other than those hereinabove described,
oil or gas xxxxx, tunnels and shafts into, through or across the subsurface of
the land hereinabove described, and to bottom such whipstocked or directionally
drilled xxxxx, tunnels and shafts under and beneath or beyond the exterior
limits thereof, and to redrill, retunnel, equip, maintain, repair, deepen and
operate any such xxxxx or mines, without, however, the right to drill, mine,
store, explore and operate through the surface or the upper 500 feet of the
subsurface of the land hereinabove described, as reserved in the deed recorded
October 26, 1973 in Book 10963, Page 158 as Instrument No. 26017, of Official
Records.
EXHIBIT "A-1"
47
STATE OF________________________)
) ss.
COUNTY OF_______________________)
On_____________________________________, before me,
_____________________, a Notary Public in and for said state, personally
appeared ________________________, personally known to me (or proved to me on
the basis of satisfactory evidence) to be the person whose name is subscribed to
the within instrument and acknowledged to me that he/she executed the same in
his/her authorized capacity, and that by his/her signature on the instrument,
the person, or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
_________________________________________
Notary Public in and for said State
STATE OF________________________)
) ss.
COUNTY OF_______________________)
On______________________________, before me, ________________________, a
Notary Public in and for said state, personally appeared _____________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person whose name is subscribed to the within instrument and
acknowledged to me that he/she executed the same in his/her authorized capacity,
and that by his/her signature on the instrument, the person, or the entity upon
behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
_________________________________________
Notary Public in and for said State
J-5
48
IN WITNESS WHEREOF, the parties hereto have executed this instrument as
of the date first hereinabove written.
"Assignor" XXXX-KW, LTD.,
a California limited partnership
By: KBD Partners,
a California general partnership
Its: Sole General Partner
By: _________________________________
Print Name:______________________
Print Title:_____________________
By: _________________________________
Print Name:______________________
Print Title:_____________________
"Assignee" PACIFIC GULF PROPERTIES INC.,
a Maryland corporation
By:______________________________________
Print Name:___________________________
Print Title:__________________________
By:______________________________________
Print Name:___________________________
Print Title:__________________________
[Attached Legal Description]
L-3
49
STATE OF________________________)
) ss.
COUNTY OF_______________________)
On_____________________________________, before me,
_____________________, a Notary Public in and for said state, personally
appeared ________________________, personally known to me (or proved to me on
the basis of satisfactory evidence) to be the person whose name is subscribed to
the within instrument and acknowledged to me that he/she executed the same in
his/her authorized capacity, and that by his/her signature on the instrument,
the person, or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
_________________________________________
Notary Public in and for said State
STATE OF________________________)
) ss.
COUNTY OF_______________________)
On______________________________, before me, ________________________, a
Notary Public in and for said state, personally appeared _____________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person whose name is subscribed to the within instrument and
acknowledged to me that he/she executed the same in his/her authorized capacity,
and that by his/her signature on the instrument, the person, or the entity upon
behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
_________________________________________
Notary Public in and for said Xxxxx
X-0
00
XXXXX OF________________________)
) ss.
COUNTY OF_______________________)
On_____________________________________, before me,
_____________________, a Notary Public in and for said state, personally
appeared ________________________, personally known to me (or proved to me on
the basis of satisfactory evidence) to be the person whose name is subscribed to
the within instrument and acknowledged to me that he/she executed the same in
his/her authorized capacity, and that by his/her signature on the instrument,
the person, or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
_________________________________________
Notary Public in and for said State
STATE OF________________________)
) ss.
COUNTY OF_______________________)
On______________________________, before me, ________________________, a
Notary Public in and for said state, personally appeared _____________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person whose name is subscribed to the within instrument and
acknowledged to me that he/she executed the same in his/her authorized capacity,
and that by his/her signature on the instrument, the person, or the entity upon
behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
_________________________________________
Notary Public in and for said State
L-5
51
CONSENT AND APPROVAL
The undersigned, ___________________________________ , as sublessor
referred to in the Assignment, hereby releases Assignor as the sublessee under
the Sublease from any and all obligations under the Sublease first accruing or
arising after the Close of Escrow, and hereby accepts Assignee as sublessee
under the Sublease as though Assignee was the original sublessee under the
Sublease; provided, however, that Assignee shall only be liable for obligations
under the Sublease first accruing or arising after the "Close of Escrow" (as
defined in the Agreement). The individuals executing this Consent and Approval
represent and warrant their authority to do so on behalf of the undersigned
entity, and that this Consent and Assignment shall be binding on and enforceable
against such entity.
Dated:__________________________ _________________________________________
a________________________________________
By:______________________________________
Print Name:___________________________
Print Title:__________________________
STATE OF________________________)
) ss.
COUNTY OF_______________________)
On______________________________, before me, ________________________, a
Notary Public in and for said state, personally appeared _____________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person whose name is subscribed to the within instrument and
acknowledged to me that he/she executed the same in his/her authorized capacity,
and that by his/her signature on the instrument, the person, or the entity upon
behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
_________________________________________
Notary Public in and for said State
L-6
52
ASSIGNMENT OF RENTAL AGREEMENTS AND ASSUMPTION AGREEMENT
THIS ASSIGNMENT OF RENTAL AGREEMENTS AND ASSUMPTION AGREEMENT
("Assignment"), made as of the day of 1998, by and between XXXX TUSTIN BUSINESS
CENTER, LTD., a California limited partnership ("Assignor"), and PACIFIC GULF
PROPERTIES INC., a Maryland corporation ("Assignee").
WITNESETH:
WHEREAS, Assignor and Assignee have entered into that certain
Agreement of Purchase and Sale and Joint Escrow Instructions, dated , 1998
("Agreement"), for the purchase and sale of a leasehold interest in certain real
property ("Property") more particularly described in Exhibit "A-4" to the
Agreement.
WHEREAS, this Assignment is being made pursuant to the terms
of the Agreement for the purpose of assigning to Assignee all of Assignor's
right, title and interest in and to those certain rental agreements ("Rental
Agreements") described in Schedule "1" attached hereto.
NOW THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. Assignment of Rental Agreements. Assignor hereby grants,
assigns, transfers, conveys and delivers to Assignee the Rental Agreements and
all of the right, title, estate, interest, benefits and privileges of the
landlord thereunder, and Assignee hereby accepts such assignment, provided,
however, that Assignor hereby retains all contract rights under the Rental
Agreements which accrued prior to the transfer of the Property to Assignee,
including, without limitation, any and all rights and causes of action to
recover past-due rent or other charges due under the Rental Agreements.
2. Assumption of Obligations. By acceptance of this
Assignment, Assignee hereby assumes and agrees to perform and to be bound by all
of the terms, covenants, conditions and obligations imposed upon or assumed by
Assignor under the Rental Agreements. Said assumption shall have application
only to those obligations under the Rental Agreements first accruing or arising
on or after the "Close of Escrow" (as defined in the Agreement) and shall have
no application to obligations accruing or arising prior to said date, which
shall remain the responsibility of Assignor.
3. Successors and Assigns. This Assignment shall be binding
upon and inure to the benefit of the successors, assigns, personal
representatives, heirs and legatees of the respective parties hereto.
EXHIBIT "M"
53
4. Attorneys' Fees. In the event of the bringing of any action
or suit by a party hereto against another party hereunder by reason of any
breach of any of the covenants, conditions, agreements or provisions on the part
of the other party arising out of this Assignment, then in that event the
prevailing party shall be entitled to have and recover of and from the other
party all costs and expenses of the action or suit, including reasonable
attorneys' fees.
5. Governing Law. This Assignment shall be governed by,
interpreted under, and construed and enforceable with, the laws of the State of
California.
6. Counterparts. This Assignment may be executed in multiple
counterparts, each of which shall be an original, but all of which, together,
shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this
instrument as of the date first hereinabove written.
"Assignor" XXXX TUSTIN BUSINESS CENTER, LTD.,
a California limited partnership
By: KBD Partners,
a California general partnership
Its: Sole General Partner
By:__________________________________
Print Name:_______________________
Print Title:______________________
By:__________________________________
Print Name:_______________________
Print Title:______________________
"Assignee" PACIFIC GULF PROPERTIES INC.,
a Maryland corporation
By:______________________________________
Print Name:___________________________
Print Title:__________________________
By:______________________________________
Print Name:___________________________
Print Title:__________________________
M-2
54
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL
THIS GRANT DEED AND ALL
TAX STATEMENTS TO:
Pacific Gulf Properties Inc.
0000 Xxx Xxxxxx, Xxxxxx Xxxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xx. Xxxxxx X. Xxxxx
--------------------------------------------------------------------------------
(ABOVE SPACE FOR RECORDER'S USE ONLY)
GRANT DEED
In accordance with Section 11932 of the California Revenue and Taxation Code,
the amount of the transfer tax is not being recorded with this Grant Deed.
FOR VALUABLE CONSIDERATION, receipt of which is hereby
acknowledged, ________________ ("Grantor"), hereby GRANTS to PACIFIC GULF
PROPERTIES INC., a Maryland corporation, all of Grantor's right, title and
interest, if any, in the improvements (the "Improvements") located on the
following described real property (the "Property") located in the City of
_______________, County of _______________, State of California:
SEE EXHIBIT "1" ATTACHED HERETO AND INCORPORATED
HEREIN BY THIS REFERENCE
SUBJECT TO:
1. Taxes and assessments.
2. All other covenants, conditions, restrictions,
reservations, rights, rights of way, easements, encumbrances, liens and title
matters whether or not of record or visible from an inspection of the Property
and all matters which an accurate survey of the Property would disclose.
EXHIBIT "N"
55
3. All of the right, title and interest of the ground lessor
under that certain ground lease by and between______________and_________________
dated_____________________(the "Ground Lease"), including the ground lessor's
reversionary interest, if any, in the Improvements upon the expiration or
earlier termination of the Ground Lease, a short form of such Lease of which was
recorded on_____________________ as Instrument No.________ in the Official
Records of Orange County, California ("Official Records").
IN WITNESS WHEREOF, Grantor has caused this Grant Deed to be
executed as of the __ day of ____________, 1998.
_________________________________________
_________________________________________
By:______________________________________
Print Name:___________________________
Print Title:__________________________
[Attach Legal Description and Jurat]
N-2
56
DECLARATION OF DOCUMENTARY TRANSFER TAX
DO NOT RECORD
County Recorder
_____________________ County, California
It is hereby requested that this Declaration of Documentary Transfer Tax not be
recorded with the attached Grant Deed, but be affixed to the Grant Deed after it
is recorded and before it is returned.
The Grant Deed names ____________________________ , as Grantor, and PACIFIC GULF
PROPERTIES INC. as Grantee. The property being transferred is located in the
City of__________________________, County of __________________ ,State of
California. The Assessor's Parcel No. is______________________.
The undersigned Grantor hereby declares that the amount of Documentary Transfer
Tax due on the attached Grant Deed is $______________________, computed on the
full value of the interest or property conveyed.
I declare under penalty of perjury that the foregoing is true and correct.
________________________________________
N-3
57
ASSIGNMENT OF SETTLEMENT AGREEMENT
THIS ASSIGNMENT OF SETTLEMENT AGREEMENT ("Assignment"), made as of the
day of , 1998, by and between XXXX-KW, LTD., a California limited
partnership ("Assignor"), and PACIFIC GULF PROPERTIES INC., a Maryland
corporation ("Assignee"). Assignor and Assignee shall be referred to
collectively herein as the parties.
WITNESETH:
WHEREAS, Assignor and Assignee have entered into that certain Agreement
of Purchase and Sale and Joint Escrow Instructions, dated , 1998
("Agreement"), for the purchase and sale of a leasehold interest in certain real
property ("Property") more particularly described in Exhibit "A-5" to the
Agreement.
WHEREAS, this Assignment is being made pursuant to the terms of the
Agreement for the purpose of assigning to Assignee all of Assignor's right,
title and interest in and to that certain Settlement Agreement (the "Settlement
Agreement") described in Exhibit "I" attached hereto.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. Assignor hereby grants, assigns, transfers, conveys and delivers to
Assignee the Settlement Agreement and all of the right, title, estate, interest,
benefits and privileges of Assignor thereunder, including, the right to receive
any security deposits held thereunder, and Assignee hereby accepts such
assignment, provided, however, that Assignor hereby retains all rights under the
Settlement Agreement which accrued prior to the transfer of the Property to
Assignee, including, without limitation, any and all rights and causes of action
to recover past-due rent or other charges due under the Settlement Agreement.
Assignor hereby agrees to indemnify, protect, defend (with counsel chosen by
Assignee) and hold harmless Assignee, Assignee's agents, and Assignee's
sublessees and assigns from and against any and all claims, losses, liabilities
and expenses, including reasonable attorneys' fees, suffered or incurred by
Assignee by reason of any breach by Assignor prior to the "Close of Escrow" (as
defined in the Agreement) of any of Assignor's obligations under the Settlement
Agreement.
2. Assumption of Obligations. By acceptance of this Assignment,
Assignee hereby assumes and agrees to perform and to be bound by all of the
terms, covenants, conditions and obligations imposed upon or assumed by Assignor
under the Settlement Agreement. Said assumption shall have application only to
those obligations under the Settlement Agreement first accruing or arising on or
after the "Close of Escrow" (as defined in the Agreement) and shall have no
application to obligations accruing or arising prior to said date, which shall
remain the responsibility of Assignor. Assignee hereby agrees to indemnify,
protect, defend (with counsel chosen by Assignor) and hold harmless Assignor,
Assignor's agents, and Assignor's sublessees and
EXHIBIT "O"
58
assigns from and against any and all claims, losses, liabilities and expenses,
including reasonable attorneys' fees, suffered or incurred by Assignor by reason
of any breach by Assignee from and after the Close of Escrow (as defined in the
Agreement) of any of Assignee's obligations under the Settlement Agreement.
3. Stipulation. Concurrently herewith or within ten (10) days following
the date hereof, Assignor and Assignee shall notify the Court that Assignee has
been assigned and Assignee has assumed, all of Assignor's right, title and
interest in the Settlement Agreement, and that Assignee should be placed in the
same position as Assignor in the event of an event of default by the "Xxxxxxxxx
Parties" (as defined therein). The parties hereby agree to request the Xxxxxxxxx
Parties to cooperate to execute any documents to so notify the Court. In the
event the Xxxxxxxxx Parties fail or refuse to cooperate to execute any such
documents, Assignor shall cooperate with Assignee to file any motion or other
documents necessary to so notify the court.
4. Additional Documents. The parties agree to cooperate fully and
execute any and all supplementary documents and to take all additional actions
which may be necessary or appropriate to give full force and effect to any and
all terms and interest of this Assignment.
5. Successors and Assigns. This Assignment shall be binding upon and
inure to the benefit of the successors, assigns, personal representatives, heirs
and legatees of the respective parties hereto.
6. Attorneys' Fees. In the event of the bringing of any action or suit
by a party hereto against another party hereunder by reason of any breach of any
of the covenants, conditions, agreements or provisions on the part of the other
party arising out of this Assignment, then in that event the prevailing party
shall be entitled to have and recover of and from the other party all costs and
expenses of the action or suit, including reasonable attorneys' fees.
7. Governing Law. This Assignment shall be governed by, interpreted
under, and construed and enforceable with, the laws of the State of California.
8. Severability. The unenforceability, invalidity or illegality of any
provision herein shall not render the other provisions unenforceable, invalid or
illegal and all remaining provisions of this Assignment shall remain in full
force and effect to the maximum extent permitted by law.
9. Counterparts. This Assignment may be executed in multiple
counterparts, each of which shall be an original, but all of which, together,
shall constitute one and the same instrument.
O-2
59
IN WITNESS WHEREOF, the parties hereto have executed this instrument as
of the date first hereinabove written.
"Assignor" XXXX-KW, LTD.,
a California limited partnership
By: KBD Partners,
a California general partnership
Its: Sole General Partner
By: _________________________________
Print Name:______________________
Print Title:_____________________
By: _________________________________
Print Name:______________________
Print Title:_____________________
"Assignee" PACIFIC GULF PROPERTIES INC.,
a Maryland corporation
By: _____________________________________
Print Name:__________________________
Print Title:_________________________
By: _____________________________________
Print Name:__________________________
Print Title:_________________________
O-3
60
SETTLEMENT AGREEMENT AND MUTUAL GENERAL RELEASE
THIS SETTLEMENT AGREEMENT AND MUTUAL GENERAL RELEASE (hereinafter "the
Agreement") is made and entered into by and between Plaintiff XXXX-KW, LTD.
("XXXX"), XXXX-XXXXX, LTD., XXXX MANAGEMENT SERVICES, XXXXXXX XXXXXXXXXX and
XXXXX XXXXXX, sometimes collectively referred to as the "Xxxx Parties", on the
one hand, and Defendant XXXX X. XXXXXXXXX ("XXXX") individually and doing
business as Rick's R.V. Storage, XXXXX XXXXXXXXX, and XXXXXXX XXXXXXXXX,
individually and doing business as Rick's R.V. Storage, sometimes collectively
referred to as the "XXXXXXXXX PARTIES", on the other hand, with reference to the
following facts:
R E C I T A L S
X. XXXX is the owner of a leasehold interest in that certain real property
located at 1702 "A" Xxxxxxx Parkway, Tustin, California (the "Subject
Property").
B. On or about February 1, 1985, XXXX and XXXXXXX XXXXXXXXX entered into a
one year sublease for the Subject Property. At all times subsequent to February
1, 1985, either XXXXXXX XXXXXXXXX and/or XXXX have operated a recreational
vehicle storage business at the subject property known as "Rick's R.V. Storage."
EXHIBIT "1"
TO
EXHIBIT "0"
61
C. Subsequent to February 1, 1985, XXXX and XXXXXXX XXXXXXXXX or XXXX
entered into seven amendments to the lease dated February 1, 1985. The lease
dated February 1, 1985, and the seven amendments shall collectively be referred
to as the "Lease."
D. On or about September 16, 1996, XXXX filed a Complaint in the Orange
County Superior Court, entitled "Xxxx X. Xxxxxxxxx, etc. x. Xxxx-Xxxxx, Ltd. et
al.," Case No. 7690233) (hereinafter the "XXXXXXXXX Action") naming as
Defendants, among others, XXXX-KW, LTD. ("XXXX"), XXXX-XXXXX, LTD., XXXX
MANAGEMENT SERVICES, XXXXX XXXXXX. In the XXXXXXXXX Action, XXXX sought
reformation of contract, specific performance, anticipatory breach of contract,
breach of contract, breach of implied covenant of good faith and fair dealing,
declaratory relief, and a temporary restraining order, preliminary and
permanent injunctions. On or about December 20, 1996, XXXX filed a First
Amended Complaint in the XXXXXXXXX Action, adding XXXXXXX XXXXXXXXXX as a
Defendant and dismissing XXXXX XXXXXX. In her First Amended Complaint, XXXX
sought reformation of contract, specific performance, breach of contract,
fraud, negligence, declaratory relief, and a temporary restraining order,
preliminary and permanent injunctions.
E. On or about October 2, 1996 XXXX filed a Complaint for unlawful
detainer in the Orange County Superior Court, entitled "Xxxxx-KW, Ltd. vs. Xxxx
X. Xxxxxxxxx, et al.," Case No. 769733 (hereinafter the "XXXX Action"). In the
XXXX Action, XXXX sought
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62
possession of the subject property, forfeiture of the Lease, damages for unpaid
rent, and the appointment of a receiver. XXXXXXX XXXXXXXXX has been named as
Defendant DOE 1. The XXXX Action and the XXXXXXXXX Action may sometimes be
collectively referred to herein as the "Actions."
F. The parties are now desirous of formalizing a settlement of the XXXX
Action, and the XXXXXXXXX Action together with any and all claims which have
been or could have been asserted in the Actions by the parties which might
arise in any way from the facts, transactions and occurrences alleged in the
pleadings in the Actions.
G. The XXXX Parties contend that the Lease terminated as of September 30,
1996. XXXX has disputed this contention. The parties also want to provide for
an agreement to settle the XXXXXXXXX Action, provide for a Stipulation re:
Entry of Judgment in the XXXX Action which will not be entered unless and until
there is an event of default as set forth herein, and to fully and completely
settle all disputes between the parties.
NOW, THEREFORE, in consideration of the mutual promises, covenants,
representations and warranties set forth herein, the sufficiency of said
consideration is hereby acknowledged, and based upon their prior agreement to
settle these disputed matters, the parties hereto hereby agree as follows:
3
63
1. Incorporation of Recitals.
Each and all of the recitals set forth above are hereby incorporated herein
by this reference as a part of this Agreement between the parties hereto, and
the parties hereto agree to be bound by the representations set forth in the
recitals.
2. Termination and Cancellation of Lease
Upon execution of this agreement by all parties hereto, the XXXXXXXXX
Parties acknowledge, agree and stipulate that the Lease was terminated and
cancelled effective September 30, 1996.
3. Stipulation for Entry of Judgment.
XXXX XXXXXXXXX, XXXXX XXXXXXXXX and XXXXXXX XXXXXXXXX shall execute a
Stipulation for Entry of Judgment ("Stipulation") in the form attached hereto as
Exhibit "A" and hereby incorporated by reference. The original of the fully
executed Stipulation will be held by Xxxxxx and Xxxxxxxx, counsel for XXXX, and
will not be filed with the Court, unless and until such time as an event of
default occurs in accordance with Paragraph 4 of this Agreement.
Upon performance of all of XXXX XXXXXXXXX, XXXXXXX XXXXXXXXX AND XXXXX
XXXXXXXXX'x obligations as set forth herein and upon XXXX XXXXXXXXX, XXXXXXX
XXXXXXXXX AND XXXXX XXXXXXXXX'x timely surrender
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64
of the Subject Property by XXXX XXXXXXXXX, XXXXXXX XXXXXXXXX AND XXXXX
XXXXXXXXX, the original, unfiled Stipulation will be returned to counsel for
XXXX.
4. Events of Default
It shall constitute an Event of Default if any of the following obligations
are not timely performed:
a. For the months of October 1996, November 1996, December 1996,
January 1997 and February 1997, XXXX shall pay to XXXX the sum of $6,500.00 per
month for a total of $33,515.00, which includes taxes of $203 per month
($1,015) all of which shall be paid upon execution of this Agreement;
b. For the months of March 1997, April 1997, May 1997, June 1997
July 1997, August 1997, and September, 1997, XXXX shall pay to XXXX the sum of
$8,000.00 per month, plus estimated taxes, which shall be due on the first day
of each month and delinquent if not paid within five (5) days;
c. For the months of October 1997, November 1997, December 1997,
January 1998, and February 1998, XXXX shall pay to XXXX the sum of $9,000.00 per
month, plus estimated taxes, which shall be due on the first day of each month
and delinquent if not paid within five (5) days;
d. For the months of March 1998, April 1998, May 1998, June 1998,
July, and August 1998, XXXX shall pay to XXXX the
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65
sum of $10,000.00 per month, plus estimated taxes, which shall be due on the
first day of each month and delinquent if not paid within five (5) days;
e. For the month of September 1998 XXXX shall pay to XXXX the sum
of $10,500.00 per month, plus estimated taxes, which shall be due on the first
day of each month and delinquent if not paid within five (5) days.
f. The XXXXXXXXX Parties shall timely perform the obligations set
forth in paragraphs 5, 6, 7, 8, 9, 10, 11, and 12 of this Agreement.
g. The XXXXXXXXX Parties shall surrender possession of the
Subject Property on September 30, 1998. Despite the provisions of subparagraphs
(a) through (e) above, the XXXXXXXXX Parties may initiate an early surrender of
the Subject Property by serving a sixty-day (60) notice on XXXX. Should the
XXXXXXXXX Parties make this election, the XXXXXXXXX Parties shall not be
responsible for any sums set forth above in paragraphs 4(b)-(a) which become due
subsequent to the surrender of the Subject Property. However, the XXXXXXXXX
Parties are responsible for the obligations set forth in paragraph 4(f) and
elsewhere in this Agreement, except that the date for surrender of the Subject
Property is advanced.
5. R.V. RENTAL AGREEMENTS
XXXX may enter into rental agreements only for R.V. storage. XXXX hereby
agrees not to enter into any R.V. storage agreement on
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the Subject Property that is longer than one year in duration, or that may
extend past September 30, 1998, whichever is shorter in duration, without the
written authorization of XXXX.
6. DISMISSAL WITH PREJUDICE OF XXXXXXXXX ACTION
Upon execution of this Agreement, XXXX shall deliver to counsel for XXXX
a dismissal with prejudice of the XXXXXXXXX Action.
7. PERSONAL PROPERTY
As additional consideration, the XXXXXXXXX Parties hereby transfer
effective September 30, 1998, to XXXX the following personal property and
fixtures located at or on the Subject Property: the electronic entry gate,
fencing, and 440 step down electrical transformer. The XXXXXXXXX Parties agree
to remove all other personal property, including all trailers, at their expense
prior to September 30, 1998.
8. BOOKS AND RECORDS OF RICK'S R.V. STORAGE
XXXX hereby agrees that on or before March 15, 1997, that she will turn
over to XXXX a true and correct copy of the most current financial statement
and a copy of each current rental agreement of the R.V. storage business. For
each new rental agreement entered
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into thereafter XXXX will promptly send a copy to XXXX. Xxxx will turn over to
XXXX the books and records of R.V. storage business and each and every rental
agreement for each and every then current tenant on the Subject Property no
later than August 1, 1998. XXXX shall provide to XXXX copies of quarterly
financial statement of Rick's R.V. Storage within five (5) days of their
receipt from her accountant.
9. Assignment of the Name "Rick's R.V. Storage"
All parties hereby agree that they will not operate an R.V. storage
facility with the name "Rick's R.V. Storage" after September 30, 1998.
10. Security Deposits
The XXXXXXXXX Parties hereby agree to turn over to XXXX no later than
September 10, 1998, or upon the occurrence of an event of default, which ever
occurs sooner, all security deposits held by XXXX on behalf of the tenants of
Rick's R.V. Storage.
11. Indemnification
The XXXXXXXXX Parties hereby agree to defend and indemnify the XXXX
Parties for any and all claims that arise out of the operation of the Subject
Property by the XXXXXXXXX Parties. XXXX agrees to
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defend and indemnify the XXXXXXXXX Parties for any and all claims arising from
the operation of the Subject Property by XXXX after September 30, 1998. The
XXXXXXXXX Parties shall maintain general liability insurance with a Best Rated
"A" or better California admitted company naming XXXX as an additional insured.
12. Cooperation in Transfer of Business
The XXXXXXXXX Parties shall fully and completely cooperate in the transfer
of the Rick's R.V. Storage business to XXXX in a 60-day transfer period
commencing August 1, 1998. Any and all assignments or transfers shall be
effective October 1, 1998.
13. Procedure for Entry of Judgment.
XXXX will be entitled to have judgment for possession of the Subject
Property and as otherwise provided for herein entered against XXXX XXXXXXXXX,
XXXXX XXXXXXXXX and XXXXXXX XXXXXXXXX. In the event of default, judgment may be
entered as follows:
x. XXXX shall first give twenty-four (24) hours written notice of
said Event of Default to counsel for the XXXXXXXXX Parties;
b. The XXXXXXXXX Parties must cure any Event of Default within
twenty-four (24) hours of written notice;
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c. After giving written notice and the failure of the XXXXXXXXX
Parties to cure, XXXX shall be entitled to have the Stipulation filed with the
Court and to have judgment entered by the Orange County Superior Court against
the XXXXXXXXX Parties in accordance with the terms of the Stipulation on an ex
parte basis with notice given to counsel pursuant to the Orange County Superior
Court Rules. The damages shall be established by declaration of counsel of XXXX
and XXXX shall be entitled to immediate possession of the Subject Property, for
all sums then due in accordance with this Agrement, plus attorneys' fee and
costs incurred in having the judgment entered. XXXX shall also be entitled to
have a Writ of Possession issue forthwith. The XXXXXXXXX Parties waive any right
to appeal such judgment. Despite anything to the contrary above or in this
agreement, there shall be no monetary award against XXXXX XXXXXXXXX or XXXXXXX
XXXXXXXXX.
14. DISMISSAL OF XXXX ACTION WITH PREJUDICE.
Upon full performance by the XXXXXXXXX Parties of all of the terms and
conditions in accordance with this Agreement, XXXX shall cause a Request for
Dismissal with prejudice of the XXXX Action to be filed with the Orange County
Superior Court. The parties agree that notwithstanding any language to the
contrary, the Orange County Superior Court shall retain jurisdiction over the
parties for the purpose of enforcing this Agreement including but not limited to
entering judgment pursuant to the Stipulation.
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15. Time is of the Essence.
All parties agree that time is of the essence in executing this Agreement
and in the performance of the obligations and promises set forth in this
Agreement.
16. Waiver and Release by the XXXX Parties.
Except for the obligations created by this Agreement and the Stipulation
re: Entry of Judgment, the XXXX Parties hereby release and discharge the
XXXXXXXXX Parties and their partners, agents, employees, representatives,
attorneys, heirs and assigns from any and all claims, demands, causes of
action, obligations, damages and liabilities of any nature whatsoever, known or
unknown, suspected or unsuspected, fixed or contingent, that the XXXX Parties
now own or hold or have at any time heretofore owned or held, against the
XXXXXXXXX Parties, and their partners, agents, employees, representatives,
attorneys, heirs and assigns arising out of, based upon or in any way related
to the XXXX Action, the XXXXXXXXX Action, or the Lease.
The above release shall only come into full force and effect upon the full
performance by the XXXXXXXXX Parties of all of their obligations under this
Agreement and the Stipulation re: Entry of Judgment.
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17. Waiver and Release by the XXXXXXXXX parties.
Except for obligations created by this Agreement, the XXXXXXXXX Parties
hereby release and discharge the XXXX Parties, KW PARTNERS, XXXX-KW, LTD.
("XXXX"), XXXX-XXXXX, LTD., XXXX MANAGEMENT SERVICES, XXXXXXX XXXXXXXXXX, XXXXX
XXXXXX and the partners, agents, employees, representatives, attorneys, heirs
and assigns from any and all claims, demands, causes of action, obligations,
damages and liabilities of any nature whatsoever, known or unknown, suspected
or unsuspected, fixed or contingent, that the XXXXXXXXX Parties now own or hold
or have at any time heretofore owned or held, against them and their partners,
agents, employees, representatives, attorneys, heirs and assigns arising out
of, based upon or in any way related to the XXXX Action, the XXXXXXXXX Action,
or the Lease.
18. Release of Unknown Claims.
The parties further acknowledge that they are familiar with the provisions
of California Civil Code Section 1542, which provides as follows:
A general release does not extend to claims which a creditor does not
know of 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.
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72
With regard to all claims released and discharged in this Agreement, the
parties hereby expressly waive and relinquish all rights and benefits under
California Civil Code Section 1542 or any other Federal or State statute or
common law principle of similar effect.
19. Advice of Counsel.
The parties hereto represent and warrant that they have had the advice of
counsel of their own choosing in negotiations for and in the preparation of
this Agreement and that they have read this Agreement or had the same read or
had the within Agreement fully explained by such counsel and that they are
fully aware of its contents and legal effect.
20. Warranties.
All persons and entities signing this Agreement represent and warrant to
each other that (a) they have the authority and capacity to make the agreements
and releases set forth in this Agreement, including all agreements and releases
made on behalf of their respective affiliates as defined herein; (b) they are
owners of and have not transferred, assigned or hypothecated any of the claims,
rights, demands and causes of action they have asserted or released herein; and
(c) no other person or entity owns, holds or has any
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73
interest in the claims, rights or causes of action that have been released
herein.
21. Non-Admission of Liability.
This Agreement is entered into for the purposes of terminating litigation
and nothing contained herein, including reduction of liabilities claimed to be
owed and payment, is intended to or does constitute an admission of liability by
any party hereto.
22. Assumption of Risk.
All parties understand that in entering into this Agreement, all parties
have not relied on any statement of any other party or its attorney and should
any party hereto be mistaken in its belief with regard to some issue of fact or
law regarding the matters herein released, each and every party hereto
specifically and expressly agrees to assume the risk of such mistake, if any
exists.
23. Attorney's Fees and Costs.
Except as may otherwise be provided for herein, the parties shall bear
their own costs, expenses and attorneys' fees incurred in connection with the
XXXX Action, the XXXXXXXXX Action, and the preparation of this Agreement.
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24. Action for Enforcement of Agreement.
If any legal action, execution of judgment or other proceeding is brought
for the enforcement of this Agreement or for damages arising from the breach
thereof, the prevailing party shall be entitled to recover their actual
attorneys' fees and other expenses including all costs incurred whether or not
allowed by Code of Civil Procedure Section 1033.5 in connection with such action
or proceedings.
25. Further Documents.
Each party hereto agrees to execute and deliver from time to time such
other and further documents and to take such actions as reasonably may be
required in order to complete this settlement.
26. Execution of Counterparts.
This Agreement may be executed in one or more counterparts, all of which,
taken together, shall constitute one and the same instrument. This Agreement
shall be effective only upon signature of at least one counterpart by all of the
parties hereto.
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27. Entire Agreement.
This Agreement constitutes the entire agreement, written and oral, among
the parties and it supersedes and replaces all prior negotiations, proposed
agreements and agreements, written or oral, and it is expressly understood and
agreed that this Agreement may not be amended, in any respect, except by a
writing duly executed by authorized representatives of the parties hereto.
28. Governing Law.
This Agreement shall be governed in all respects by the laws of the State
of California. The parties hereto agreed to venue in the Orange County Superior
Court.
29. Notice.
Any notice required by this agreement shall be mailed to:
XXXX PARTIES: XXXX-KW, LTD.
C/X Xxxxxx & Xxxxxxxx
00000 Xxx Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
FAX: (000) 000-0000
XXXXXXXXX PARTIES: PARILLA, MILITZOK & XXXXXXX, X.X.
0 Xxxx Xxxxx, Xxxxx 0000
Xxxxxx, XX 00000-0000
FAX: (000) 000-0000
It shall be the responsibility of each party to this agreement to notify
the other party in writing of any change of address where notices and/or
payments are to be sent.
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30. Partial Invalidation Does Not Invalidate the Whole.
Should any of the provisions of this Agreement be declared or determined
by any Court to be illegal of invalid, the validity of the remaining provisions
or terms shall not be affected thereby and the illegal or invalid provisions or
terms will be deemed not to be a part of this Agreement.
31. Non-Solicitation
The parties represent and warrant that they have no present plans to
operate an R.V. storage facility, either directly or indirectly, either as an
employee, agent, partner or owner of an R.V. storage business. The XXXXXXXXX
parties further agree that they will take no action to disrupt the transfer of
the R.V. storage business to XXXX. The XXXX Parties agree that they will not
take any action to interfere with the XXXXXXXXX parties' operation of the R.V.
storage facility prior to the transition period as provided herein. Neither
XXXX nor the XXXXXXXXX Parties shall solicit customers of "Rick's R.V. Storage"
to another R.V. storage facility prior to October 1, 1998.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
on the following dates.
Dated: February 7th 1997 By: /s/ XXXX X. XXXXXXXXX
------------------------ ------------------------------------
XXXX X. XXXXXXXXX
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Dated: 2-7-97 By: /s/ XXXXXXX X. XXXXXXXXX
------------------------ ------------------------------------
XXXXXXX X. XXXXXXXXX
Dated: 2-7-97 By: /s/ XXXXX XXXXXXXXX
------------------------ ------------------------------------
XXXXX XXXXXXXXX
Dated: 2-10-97 By: /s/ XXXXX XXXXXX
------------------------ ------------------------------------
XXXXX XXXXXX
Dated: By: /s/ XXXXXXX XXXXXXXXXX
------------------------ ------------------------------------
XXXXXXX XXXXXXXXXX
XXXX-KW, LTD.
BY: KBD PARTNERS
By: /s/ XXXXX X. XXXXXXXXX
------------------------------------
Xxxxx X. Xxxxxxxxx, a Gen. Partner
Dated: 2/18/97 By: /s/ XXXXXXX X. XXXXXXXXX
------------------------ ------------------------------------
Xxxxxxx X. Xxxxxxxxx, a Gen. Partner
XXXX-XXXXX, LTD.
Dated: By:
------------------------ ------------------------------------
Name:
----------------------------------
Its:
-----------------------------------
KW PARTNERSHIP
Dated: By:
------------------------ ------------------------------------
Name:
----------------------------------
Its:
-----------------------------------
XXXX MANAGEMENT SERVICES
Dated: 2/17/97 By: /s/ XXXXX XXXXX
------------------------ ------------------------------------
Name: Xxxxx Xxxxx
----------------------------------
Its: Managing Agent
-----------------------------------
18
78
XXXXXXXXX X. XXXXXX STATE BAR NO. 96776
XXXXXXX X. XXXXXXX STATE BAR NO. 152849
XXXXXX AND XXXXXXXX
A Law Corporation
00000 Xxx Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000-0000
(000) 000-0000
Attorneys for Plaintiff XXXX-KW, LTD.,
a California limited partnership
SUPERIOR COURT OF THE STATE OF CALIFORNIA
FOR THE COUNTY OF ORANGE
XXXX-KW, LTD., a California ) CASE NO. 769733
limited partnership, )
) STIPULATION FOR ENTRY OF
Plaintiff, ) JUDGMENT
)
vs. )
)
XXXX X. XXXXXXXXX, an )
individual, dba RICK'S R.V. )
STORAGE; and DOES 1 through )
100, inclusive, )
)
Defendants. )
)
-------------------------------
This Stipulation is entered into by and between Plaintiff XXXX-KW, LTD.
("XXXX") and Defendants, XXXX X. XXXXXXXXX, XXXXXXX XXXXXXXXX and XXXXX
XXXXXXXXX (hereinafter referred to jointly and severally as "Defendants" or the
"XXXXXXXXX Parties"). Plaintiff and Defendants do hereby stipulate and declare
as follows:
79
It is further stipulated that Plaintiff's damages may be established by
declaration of counsel of XXXX, and that the judgment may executed by a Court
Commissioner. Defendants waive any right to appeal such judgment, and further
waive any variance between the pleadings and the judgment.
IT IS SO STIPULATED
Dated: February 7th, 1997. By: /s/ XXXX X. XXXXXXXXX
----------------------------
XXXX X. XXXXXXXXX
Dated: February 7th, 1997. By: /s/ XXXXXXX XXXXXXXXX
----------------------------
XXXXXXX XXXXXXXXX
Dated: February 7th, 1997. By: /s/ XXXXX XXXXXXXXX
----------------------------
XXXXX XXXXXXXXX
XXXX-KW, LTD.
BY: KBD PARTNERS
Dated: February 3rd, 1997. By: /s/ XXXXX X. XXXXXXXXX
------------------------------------
Xxxxx X. Xxxxxxxxx, a Gen. Partner
By: /s/ XXXXXXX X. XXXXXXXXX
------------------------------------
Xxxxxxx X. Xxxxxxxxx, a Gen. Partner
APPROVED AS TO FORM AND CONTENT
PARILLA, MILITZOK & XXXXXXX, LLP
Dated: February 7th, 1997 By: /s/ XXXXXXX XXXXXX
------------------------------------
XXXXXXX XXXXXX
Attorneys for Defendants
XXXX X. XXXXXXXXX, XXXXXXX XXXXXXXXX
AND XXXXX XXXXXXXXX.
XXXXXX AND XXXXXXXX
Dated: February 18th, 1997 By: /s/ XXXXXXXXX X. XXXXXX
------------------------------------
XXXXXXXXX X. XXXXXX
Attorneys for Plaintiff, XXXX-KW,
LTD, Defendants
3
80
GENERAL ASSIGNMENT AGREEMENT
THIS GENERAL ASSIGNMENT AGREEMENT ("Assignment"), is made as of the day
of 199__, by and among a _ ("Assignor") and PACIFIC GULF PROPERTIES INC., a
Maryland corporation ("Assignee").
WITNESSETH:
Assignor is the owner of that certain land (the "Land") located in the
City of_________________________ , County of ___________________ , State of
California more particularly described in Exhibit "A" attached hereto, and all
rights, privileges and easements appurtenant to the Land (the "Appurtenances"),
and all buildings and other improvements thereon (the "Improvements"). The Land,
the Appurtenances and the Improvements are hereinafter referred to collectively
as the "Real Property." The Real Property is being conveyed by Assignor to
Assignee pursuant to a grant, bargain and sale deed ("Grant Deed") of on or
about even date herewith.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. Assignor hereby grants, assigns, transfers, conveys and delivers to
Assignee all of Assignor's right, title, interest, benefits and privileges in
and to the following described property to the extent they are assignable
(collectively, the "Rights"):
(a) All construction, engineering, consulting, architectural
and other similar drawings and plans, if any, concerning the design or
construction of any or all of the Real Property and all warranties, if any, with
respect thereto;
(b) All payment and performance bonds or guaranties, if any,
and any and all modifications and extensions thereof relating to the Real
Property;
(c) All refunds and payments of any kind relating to the
construction, operation, occupancy, use and/or disposition of any or all of the
Real Property;
(d) All proceeds and claims arising on account of any damage
to or taking of the Real Property or any part thereof, and all causes of action
and recoveries for any loss or diminution in the value of the Real Property;
(e) All warranties and guaranties, either oral or written, for
all or any portion of the Property; and
(f) All governmental permits and approvals relating to the
construction, operation, use or occupancy of the Property, if any.
EXHIBIT "P"
81
2. Assignee hereby accepts the grant, assignment, transfer, conveyance
and delivery of the Rights set forth in Paragraph 1 hereof, effective as of the
recordation of the Grant Deed.
3. This Assignment shall be binding upon and inure to the benefit of
the successors, assigns, personal representatives, heirs and legatees of the
respective parties hereto.
4. In the event of the bringing of any action or suit by a party hereto
against another party hereunder by reason of any breach of any of the covenants,
conditions, agreements or provisions on the part of the other party arising out
of this Assignment, then in that event the prevailing party shall be entitled to
have and recover of and from the other party all costs and expenses of the
action or suit, including reasonable attorneys' fees.
5. This Assignment shall be governed by, interpreted under, and
enforced and construed in accordance with the laws of the State of California.
6. This Assignment may be executed in multiple counterparts, each of
which shall be deemed an original, but all of which together shall constitute
but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this instrument as
of the date first hereinabove written.
"Assignor" _________________________________________
_________________________________________
_________________________________________
"Assignee" PACIFIC GULF PROPERTIES INC.,
a Maryland corporation
By:______________________________________
Its:__________________________________
P-2
82
LEGAL DESCRIPTION OF THE PROPERTY
[To Be Provided]
EXHIBIT "A" to
EXHIBIT "P"
83
GROUND LESSOR ESTOPPEL CERTIFICATE
The undersigned, as [Ground Lessor/Ground Sublessor] under that certain
[Ground Lease/Ground Sublease] (the "Lease") dated as of_____________________ ,
19___, made by __, as Ground Lessee, with respect to the property described in
Exhibit "1" attached hereto (the "Premises"), hereby certifies as follows:
1. The commencement date under the Lease was _____________, 19__;
2. The term of the Lease will expire on _____________, 19___;
3 Seller has deposited with [ground lessor/ground sublessor] the sum of
Dollars ($_____________) as a Security Deposit;
4. No rents or charges have been paid in advance, except for the
following rents or charges which have been paid to the date specified:
$__________ paid to ______, 19___;
5. The current monthly rental (including all Consumer Price Index
adjustments and as otherwise adjusted pursuant to the terms of the Lease)
is________________ Dollars ($___________________ );
6. The Lease (including all Exhibits) is in full force and effect and
has not been assigned, subleased, modified, supplemented or amended in any way,
except as follows:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
7. The Lease, as affected by those changes set forth in Paragraph 6
above, represents the entire agreement between the parties as to the Premises;
8. There are no uncured defaults by [Ground Lessee/Ground Sublessee]
under the Lease, and [Ground Lessor/Ground Sublessor] knows of no events or
conditions which, with the passage of time or notice, or both, would constitute
a default by [Ground Lessee/Ground Sublessee] under the Lease, except as
follows:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
9. At the date hereof, there are no existing defenses or offsets which
the undersigned has against the enforcement of the Lease by [Ground
Lessee/Ground Sublessee];
EXHIBIT "Q"
84
10. All conditions of the Lease to be performed by [Ground
Lessee/Ground Sublessee] and necessary to the enforceability of the Lease have
been satisfied;
11. [Ground Lessee/Ground Sublessee] has no option, right of first
refusal or right of first offer to purchase the Premises; and
12. [Ground Lessee/Ground Sublessee] has accepted possession and is in
occupancy of the Premises.
[Ground Lessor/Ground Sublessor] recognizes and acknowledges it is
making these representations in connection with [Ground Lessee's/Ground
Sublessee's] proposed sale of its leasehold interest in the Premises with the
intention that the purchaser of said leasehold interest will be relying on these
representations in consummating such acquisition.
EXECUTED this________ day of ____________, 1998.
"[GROUND LESSOR/GROUND SUBLESSOR]"
By:______________________________________
Print Name:___________________________
Print Title:__________________________
Q-2
85
SELLER'S GROUND LEASE ESTOPPEL CERTIFICATE
This Seller's Ground Lease Estoppel Certificate ("Certificate") is made
as of the ______ day of_______, 1998 by_____________________,
a_________________("Seller"), in favor of__________, a _________________________
"Buyer'), with reference to the following facts:
RECITALS:
A. Seller and Buyer entered into that certain Agreement of Purchase and
Sale and Joint Escrow Instructions ("Agreement"), made and entered into as of
1998, pursuant to which Seller agreed to sell to Buyer the "Property" (as
defined in the Agreement).
B. Pursuant to Paragraph 7(a)(v) of the Agreement, Seller is obligated
to deliver its own estoppel certificate for the [KBC-Tustin Ground Lease/KW
Sublease] (the "Lease") if Seller was unable to obtain a "Ground Lease Estoppel
Certificate" from the [ground lessor/ground sublessor] prior to the closing of
the transaction contemplated by the Agreement.
NOW, THEREFORE, Seller hereby certifies to Buyer as follows:
1. The commencement date under the Lease was________, 19__;
2. The term of the Lease will expire on_____________, 19__ ;
3. Seller has deposited with [ground lessor/ground sublessor] the sum
of Dollars ($__________) as a Security Deposit;
4. No rents or charges have been paid in advance, except for the
following rents or charges which have been paid to the date specified:
$____________ paid to___________, 19____;
5. The current monthly rental (including all Consumer Price Index
adjustments and as otherwise adjusted pursuant to the terms of the Lease) is
____________ Dollars ($_________);
6. The Lease (including all Exhibits) is in full force and effect and,
to Seller's actual knowledge without any investigation or inquiry of an kind or
nature whatsoever, the Lease has not been assigned, modified, supplemented or
amended in any way, except as follows:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
7. The Lease, as affected by those changes set forth in Paragraph 6
above, represents the entire agreement between the parties;
EXHIBIT "R"
86
8. There are no uncured defaults by Seller under the Lease, and Seller
is not aware, without any investigation or inquiry of any kind or nature
whatsoever, of any events or conditions which, with the passage of time or the
giving of notice, or both, would constitute a default by Seller under the Lease,
except as follows:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
9. At the date hereof, and, to Seller's actual knowledge without any
investigation or inquiry of an kind or nature whatsoever, there are no existing
defenses or offsets which the (ground lessor/ground sublessor] has against the
enforcement of the Lease by Seller;
10. All conditions of the Lease to be performed by Seller and necessary
to the enforceability of the Lease have been satisfied.
11. Seller has no option, right of first refusal or right of first
offer to purchase the Premises; and
12. Seller has accepted possession and is in occupancy of the Premises.
Seller recognizes and acknowledges it is making these representations
in connection with Seller's proposed sale of its leasehold interest in the
Premises.
IN WITNESS WHEREOF, Seller has executed this Certificate as of the date
first set forth above.
_________________________________________
_________________________________________
_________________________________________
R-2
