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EXHIBIT 2.1
REAL ESTATE PURCHASE AND SALE AGREEMENT
(MILWAUKIE AND SALEM - JOE'S PORTFOLIO PROPERTIES)
This REAL ESTATE PURCHASE AND SALE AGREEMENT (the "AGREEMENT") is
entered into as of this 28TH day of JULY, 2000, by and among WREP 1998-1 LLC, a
Delaware limited liability company (the "SELLER"), and WATUMULL PROPERTIES
CORP., a(n) HAWAIIAN corporation (the "PURCHASER"), and the execution of this
Agreement has been approved and joined into by WILSHIRE REAL ESTATE PARTNERSHIP
L.P., a Delaware limited partnership ("WREP"), and WREP-1998-1 MEMBER INC., a
Delaware corporation ("WREP MEMBER"), for the purposes stated in this Agreement.
RECITALS:
A. Seller owns fee title to certain real property (the "LAND"), the
legal descriptions of which are attached as EXHIBIT A-1 (each parcel of the
Land, together with all improvements located thereon owned by Seller (the
"IMPROVEMENTS"), is hereinafter individually referred to as a "PROPERTY", and
all such properties collectively referred to as the "PROPERTIES").
B. Seller desires to convey to Purchaser the Property owned by Seller,
its interest in the Leases with Joe's, and other property interests held in
connection with the Property other than the Undeveloped Parcel (such Property,
lease interests and other related interests to be conveyed to Purchaser as
described herein are sometimes referred to as the "ASSETS").
C. Purchaser desires to acquire the Assets from Seller upon and subject
to the satisfaction of the terms, covenants and conditions of this Agreement.
AGREEMENT:
1. PURCHASE AND SALE OF THE ASSETS. Seller agrees to sell the Assets to
Purchaser, and Purchaser agrees to purchase the Assets from Seller, on the terms
and conditions set forth in this Agreement.
The Assets will include the following:
(a) The Land owned by Seller and described in EXHIBIT A-1
attached hereto;
(b) All interests, if any, of Seller in the Improvements and
in furniture, fixtures and equipment and personal property ("PERSONAL
PROPERTY"), if any, currently situated on the Land (excluding, however,
the inventory, display cases, equipment, furniture, fixtures and
equipment and other personal property of tenants) (by referring to such
Personal Property, Seller is not representing that there is any such
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Personal Property but only agreeing that any reversionary interest it
may have in such Personal Property pursuant to the Leases with Joe's is
being conveyed to Purchaser);
(c) The interest of Seller in all leases affecting the
Properties (the "LEASES"); and
(d) All rights, if any, of Seller in all assignable contracts,
warranties, guaranties and other intangible property now or hereafter
existing with respect to the Properties (the "INTANGIBLE PROPERTY"),
subject to and excluding the interest, if any, of tenants therein.
2. PURCHASE PRICE. The total purchase price for all of the Assets (the
"PURCHASE PRICE") shall be NINE MILLION NINE HUNDRED THOUSAND AND NO/100THS
DOLLARS ($9,900,000.00). Within three (3) days following the EFFECTIVE DATE (as
defined below), Purchaser shall deposit with FIRST AMERICAN TITLE INSURANCE
COMPANY OF OREGON (whose address is: 200 SW Market Avenue, Suite 250, Portland,
Oregon 97204 Attention: Kelly Norton) ("ESCROW Agent") the amount of One Hundred
Thousand Dollars ($100,000) (the "DEPOSIT"), WHICH WILL BE IN THE FORM OF THE
EARNEST MONEY PROMISSORY NOTE ATTACHED HERETO (THE "NOTE"), BUT WHICH WILL BE
REPLACED BY CASH WITHIN THREE (3) BUSINESS DAYS AFTER THE END OF THE REVIEW
PERIOD PROVIDED BELOW. The Deposit shall be applied to the Purchase Price at
Closing or applied as otherwise specifically provided herein. Subject to the
adjustments and credits set forth in this Agreement, the entire Purchase Price
shall be paid to the Seller in immediately available funds on the Closing Date
(as defined below), less a credit for the amount owed on the existing Loan (as
defined below) as of the Closing. The "EFFECTIVE DATE" is the date of mutual
execution of this Agreement, as evidenced by the latest date next to the
parties' signature on this Agreement.
3. PURCHASER'S CONTINGENCIES.
3.1 SUBMISSION OF REVIEW INFORMATION. As of the Effective Date (or
before), Seller has made (or will make) available for Purchaser's review and
photocopying (subject to the terms of the Confidentiality Agreement among Seller
and Purchaser being executed contemporaneously with, or prior to, the execution
of this Agreement) (the "CONFIDENTIALITY AGREEMENT"), the original or true
copies of the following information ("REVIEW DOCUMENTATION"). EXCEPT AS
OTHERWISE NOTED BELOW, the Review Documentation shall be subject to Purchaser's
review and approval from the Effective Date until JULY 31, 2000 AT 5:00 P.M.
PACIFIC DAYLIGHT SAVINGS TIME (the "REVIEW PERIOD"); PROVIDED, THAT (1) SELLER
HAS ALREADY DELIVERED OR WILL DELIVER BY JULY 29, 2000 TO PURCHASER OR ITS
COUNSEL A COPY OF THE JOE'S LEASES, OFFICE DEPOT SUBLEASE AND SETTLEMENT
AGREEMENT, AND A COPY OF THE EXISTING TITLE POLICIES AND A PRELIMINARY TITLE
REPORT (LAST UPDATED IN 1999) ON THE PROPERTIES; AND (2) THE REVIEW PERIOD FOR
REVIEW AND APPROVAL OF THE JOE'S LEASES, OFFICE DEPOT SUBLEASE AND SETTLEMENT
AGREEMENT AND EXISTING TITLE POLICIES AND PRELIMINARY TITLE REPORTS SHALL END ON
AUGUST 4, 2000 AT 5:00 P.M. PACIFIC DAYLIGHT SAVINGS TIME. THE REVIEW
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DOCUMENTATION CONSISTS OF THE FOLLOWING:
(a) SELLER'S ORGANIZATIONAL DOCUMENTS. The entity
documents for Seller (its articles of organization and
operating agreement for such LLC) and of WREP Member, the
managing member of Seller (its articles of incorporation and
bylaws), and any certificates or other agreements between such
entities and Lender (as described below) that include
covenants or agreements related to single purpose entity
("SPE") requirements of Lender.
(b) SELLER'S AUTHORIZATIONS. Resolutions adopted by
the Board of Directors or other evidence of approval of this
transaction by the members of Seller, authorizing or approving
this Agreement.
(c) OPERATING STATEMENTS. Operating Statements FOR
THE PROPERTIES for calendar year 1998 and 1999.
(d) EXISTING TITLE POLICIES AND SUBSEQUENT TITLE
MATTERS. A true copy of the title insurance policies held by
Seller with respect to the Property owned by it (collectively,
the "EXISTING TITLE POLICIES"), and a copy of any other
easement or encumbrance against Seller's title to any of the
Properties as to which Seller has actual knowledge.
(e) JOE'S LEASES AND OFFICE DEPOT SUBLEASE. Copies of
all leases held by Seller with respect to the Properties,
which consist of certain lease agreements (the "JOE'S LEASES")
between Seller as landlord/lessor and G. I. Joe's Inc.
("JOE'S") as tenant/lessee, and a copy (as previously provided
by Joe's to Seller) of the sublease that Joe's has with Office
Depot, Inc. ("OFFICE DEPOT") of one of the Properties on
Lancaster Drive in Salem, Oregon ("OFFICE DEPOT SUBLEASE").
(f) ENVIRONMENTAL REPORTS. Such environmental reports
and updates of environmental assessments as Seller may have in
its possession concerning the Properties (the "ASSESSMENTS"),
including (without limitation) those related to asbestos or
asbestos-containing materials, polychlorinated biphenyl's
("PCBS"), radon gas, and other hazardous substances, wastes or
materials regulated by any federal or state environmental laws
("ENVIRONMENTAL LAWS").
(g) REMEDIATION CONFIRMATION. Such environmental
updates or clean-up confirmation materials as Seller may have
in its possession related to the Properties, concerning
whether any hazardous materials exist thereon in
concentrations above the legal maximum limits and, to the
extent any
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remediation of such materials have been undertaken, as to
whether the same have been completed and accepted by the
governing agency.
(h) BUILDING PLANS AND PROPERTY SURVEYS. Such
building plans and such boundary, ALTA or other property
surveys as Seller may have in its possession concerning the
Properties. (To the extent that Seller may have more than one
print or version of a survey, Seller may satisfy its
obligation with respect to property surveys under this
paragraph by providing the latest survey as it may have in its
possession.)
(i) SETTLEMENT AGREEMENT. The Settlement Agreement
dated March 14, 2000 among Seller, Joe's and State Street Bank
and Trust Company (the "SETTLEMENT AGREEMENT"), WHICH
CONCERNED OBLIGATIONS OF JOE'S TO PAY CERTAIN RESERVES UNDER
THE JOE'S LEASES.
(j) UNDERLYING LOAN DOCUMENTATION. Copies of the
existing loan and security instruments on the Properties as
referenced in Section 3.8 below.
(k) UCC REPORT. The UCC Reports (as defined below),
which have not yet been obtained but will be delivered to
Purchaser within ten (10) business days after the Effective
Date.
3.2 PURCHASER'S REPORTS. In addition to the Review Documentation,
Purchaser shall have the right to obtain and approve (IN PURCHASER'S SUBJECTIVE
GOOD FAITH AND BUSINESS JUDGMENT AND AT PURCHASER'S SOLE DISCRETION), during the
Review Period, any other "due diligence" investigations of Seller and the
Property (the "PURCHASER'S REPORTS"), as Purchaser deems necessary, including,
without limitation, the following, IF AND TO THE EXTENT required by Purchaser:
(a) ADDITIONAL ENVIRONMENTAL, GEOTECHNICAL,
STRUCTURAL AND OTHER REPORTS. Such environmental updates or
reliance letters or additional environmental, geotechnical,
structural and other reports, studies and assessments, as
Purchaser may desire (IN PURCHASER'S SUBJECTIVE GOOD FAITH AND
BUSINESS JUDGMENT AND AT PURCHASER'S SOLE DISCRETION), with
respect to the Properties.
(b) SURVEY, TITLE AND OTHER UPDATES. Any additional
surveys or updates or reliance letters, supplemental title
searches and other updates on any of the Review Documentation,
as Purchaser may desire (IN PURCHASER'S SUBJECTIVE GOOD FAITH
AND BUSINESS JUDGMENT AND AT PURCHASER'S SOLE DISCRETION),
with respect to the Properties.
3.3 SUPPLEMENTAL INFORMATION. If and to the extent Seller obtains
between the date
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the Review Documentation was made available for Purchaser's review and the
Closing Date any other information, reports, assessments or data, if any, which
materially changes or amends or is materially different than the information in
the Review Documentation, Seller shall promptly furnish Purchaser with such new
or additional reports or amendments or contrary or conflicting information.
3.4 PURCHASER'S INSPECTION RIGHTS. In addition to reviewing the
Review Documentation and Purchaser's Reports, Purchaser shall have the right,
prior to the Closing Date and at Purchaser's expense, to inspect the Properties
and any other books and records related to the Properties from time to time;
PROVIDED, however, that (i) any intrusive tests into the Properties shall
require Seller's prior written approval, which approval shall not be
unreasonably withheld, conditioned or delayed, and (ii) any physical entry onto
the Properties will be performed in accordance with the conditions of Seller's
early entry agreement (in the form ATTACHED HERETO, WHICH WILL BE signed by
Purchaser before any such entry). The Review Documentation, Purchaser's Reports
and other studies, assessments, reports and other information about the
Properties compiled or obtained by Purchaser are, collectively, the "DUE
DILIGENCE REPORTS". Each of the Due Diligence Reports will be certified and/or
addressed showing Mortgagee and Special Servicer as additional parties, as
required by Special Servicer.
The Due Diligence Reports will include, at Purchaser's option, such
estoppel, status or other certificates or any clarification or other documents
(collectively, "THIRD PARTY DOCUMENTS") as Purchaser may desire and be able to
obtain from Joe's, Office Depot, the Mortgagee and Special Servicer referenced
below. Purchaser will promptly prepare the form of any Third Party Document that
Purchaser desires to obtain from such third parties and provide a copy of each
Third Party Document to Seller. Purchaser will put the Third Party Documents in
final form and forward them to the third party whose signature is sought, with a
copy to Seller. Purchaser will provide to Seller copies of any written comments
or correspondence received from the third party and copy Seller on subsequent
drafts or final versions of any such Third Party Documents, in the same manner
as provided above.
The parties will reasonably co-operate on efforts to obtain execution
of such Third Party Documents. Each party will keep the other party reasonably
informed about the status of the requests to execute such Third Party Documents.
Seller is not warranting or representing that Joe's, Office Depot, the
Mortgagee, or Special Servicer is obligated to execute the Third Party Documents
or that it is likely or probable that such parties will execute such Third Party
Documents, and the execution and delivery of Third Party Documents is not a
condition to Purchaser's obligation hereunder. Seller will not be required to
incur "processing" fees or expense reimbursements as Joe's, Office Depot, the
Mortgagee, or Special Servicer may charge as a pre-condition to review of such
Third Party Documents, which fees or expense reimbursements (if required for
Purchaser to obtain a Third Party Document that Purchaser desires to obtain)
will be promptly paid by Purchaser.
3.5 PAYMENTS FOR DUE DILIGENCE REPORTS; DUE DILIGENCE REVIEW
COSTS. All costs
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and expenses of all of the Due Diligence Reports compiled or obtained by
Purchaser pursuant to this Agreement will be at Purchaser's expense (but there
is no charge to Purchaser for any expense incurred by Seller in obtaining or
compiling the Review Documentation). However, if this Agreement is terminated
for any reason, the entire written work product of such Due Diligence Reports
will be delivered to Seller, without charge (but without warranty or
representation as to Seller's right to use or rely upon such materials).
3.6 TRANSFERABLE RESERVES; HANDLING OF IMMEDIATE RESERVES. At
Closing, all cash reserves for property taxes, insurance, tenant improvement and
leasing commissions, seismic, capital expenditures, and other matters which
Seller actually holds OR CONTROLS, as of the Closing, with respect to the
Properties and which were obtained from tenants of the Property will be
transferred with the Assets, as and to the extent such reserves are listed in
the schedule attached as EXHIBIT C-1 (the "TRANSFERABLE RESERVES"). If these
funds are held in accounts requiring changes in authorized signators or if any
such Transferable Reserves are held by the Mortgagee or Special Servicer
referenced in Section 3.8 and such parties require Seller to acknowledge that
the rights to such Transferable Reserves will pass to Purchaser, Seller will
execute such documents as may be required to confirm such matters. Such
Transferable Reserves does not include the certain immediate reserves of Seller
(the "IMMEDIATE RESERVES"), identified on the schedule attached as EXHIBIT C-2,
as to which Purchaser will fund its money into such reserves in lieu of Seller's
Immediate Reserves so as to permit Seller to retain the Immediate Reserves funds
previously deposited (which will not be transferred to Purchaser or constitute a
credit to Purchaser or charge to Seller, and the funding of money by Purchaser
to replace Seller's Immediate Reserves is separate from and in addition to the
Purchase Price).
3.7 REMOVAL OF CONTINGENCIES OTHER THAN MORTGAGEE APPROVAL. The
following procedure shall be employed in connection with Purchaser's removal of
the contingencies concerning the Properties and other matters:
(a) Purchaser shall have until the end of the Review
Period within which to determine if it is satisfied (IN
PURCHASER'S SUBJECTIVE GOOD FAITH AND BUSINESS JUDGMENT AND AT
PURCHASER'S SOLE DISCRETION) with the condition (physical,
financial and other) of the Properties and of Seller and all
other "due diligence" aspects of this transaction (OTHER THAN
MORTGAGEE APPROVAL, WHICH WILL BE AS PROVIDED IN SECTION 3.8)
and to waive in writing the contingencies to Purchaser's
obligation to close the purchase pursuant to the terms and
conditions of this Agreement (OTHER THAN THE CONTINGENCY IN
SECTION 3.8 CONCERNING MORTGAGEE APPROVAL, WHICH WILL BE AS
PROVIDED IN SECTION 3.8). Such waiver will constitute an
acceptance of the condition (physical, financial and other) of
the Properties and of Seller and all other "due diligence"
aspects of this transaction (OTHER THAN MORTGAGEE APPROVAL),
in their then current condition, AS IS.
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(b) If, by the end of the Review Period, Purchaser
has not notified Seller in writing that Purchaser is satisfied
(IN PURCHASER'S SUBJECTIVE GOOD FAITH AND BUSINESS JUDGMENT
AND AT PURCHASER'S SOLE DISCRETION) with the condition
(physical, financial and other) of the Properties, the Leases,
the Loan and all other "due diligence" aspects of this
transaction and waives in writing the contingencies to
Purchaser's obligation to close the purchase pursuant to the
terms and conditions of this Agreement, then this Agreement
shall automatically terminate. This Agreement thereafter shall
be null and void and neither party shall have any obligation
to the other except as otherwise stated herein.
(c) If Purchaser so elects, Purchaser may offer
Seller the opportunity to correct any items Purchaser
determines to be unacceptable, at the expense of Seller by
providing it with written notice prior to the end of the
Review Period of a matter about the Properties that Purchaser
finds objectionable, and stating what must be corrected, by
what dates and in what manner. Purchaser will attempt to
provide such notice as soon as reasonably possible after
discovery of any condition that Purchaser would find
unacceptable. Seller will have no obligation to correct any
matter to which Purchaser has objected. If Purchaser has given
such notice to Seller, the following will apply:
(i) Within five (5) business days after
Seller receives such notice, Seller shall notify
Purchaser in writing as to whether and to the extent
that Seller may agree to attempt to correct the
matter to which Purchaser has objected or as to which
they are willing to pay for such correction or permit
an adjustment to the purchase price. If Seller fails
to give such notice within such 5-day period, then
Seller will be deemed to have refused to agree to
such corrections and purchase price adjustment.
(ii) Within five (5) business days after
Seller gives such notice under subsection (i) above
(or after the last day of the 5-day period within
which such notice is to be given, if it is not),
Purchaser may elect either to: (i) cancel this
Agreement, or (ii) agree to waive its contingencies
as provided in this Section. The failure of Purchaser
to give such notice within such 5-day period shall be
conclusively deemed an election to cancel this
Agreement. If this Agreement is not so canceled,
Seller shall promptly commence and proceed with
diligence to completion prior to the Closing Date
with the correction of the items which Seller agreed
to undertake in its notice to Purchaser.
3.8 CONTINGENCY CONCERNING MORTGAGEE APPROVAL; CONCURRENT CLOSING.
The Property owned (or leased) by Seller is subject to certain financing (the
"LOAN") evidenced by loan and security instruments (the "LOAN DOCUMENTATION") in
favor of Credit Suisse First
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Boston Mortgage Capital LLC (the "ORIGINAL LENDER"), whose interest is currently
held by State Street Bank and Trust Company, as Trustee ("MORTGAGEE"), whose
consent and approval is required in connection with this transaction. Mortgagee
acts as Trustee in connection with the issuance of the Credit Suisse First
Boston Mortgage Pass-through Certificates Series 1998-C1 (Loan #CSFB 98-CI;
#197000297), which are rated securities. The Loan Documentation requires that
the borrower/owner of the Properties must be and maintain its existence as an
SPE entity and that any transfer of the Properties must (INTER ALIA) receive
rating agency approvals.
The special servicing agent for the Mortgagee, Lennar Partners
("SPECIAL SERVICER"), and Seller entered into an agreement dated October 15,
1998, concerning the terms under which Special Servicer will consider
information and requests related to a proposed or prospective transfer of the
Assets, a copy of which has been given to Purchaser. As soon as possible (and
NOT LATER THAN THE END OF THE REVIEW PERIOD), Purchaser will supply to Orix Real
Estate Capital Markets, 1717 Main Street, 12th Floor, Dallas, Texas 75201 (Attn:
John Lloyd) the information, materials and authorizations requested by Special
Servicer that are required as to Purchaser and its principals in connection with
the transfer of Assets and as may be required to seek rating agency approvals,
and provide a copy of such information, materials and authorizations to Seller.
Purchaser will pay the review/processing fees charged by Mortgagee and/or
Special Servicer in order to review this transaction and any application or
review fee required by rating agencies to review the proposed transfer of Assets
to Purchaser. TO THE ACTUAL KNOWLEDGE OF SELLER (AS DEFINED IN SECTION 5 BELOW),
THE ESTIMATED COSTS AND FEES THAT SELLER BELIEVES WILL BE REQUIRED BY MORTGAGEE
AND SPECIAL SERVICER IN CONNECTION WITH THEIR REVIEW AND APPROVAL OF THIS
TRANSACTION ARE AS DESCRIBED ON AN ATTACHED SCHEDULE.
In addition to efforts to obtain Mortgagee's consent and approval, the
parties will also reasonably co-operate with each other on efforts to obtain the
Mortgagee's approval of a "substitution" of Purchaser for Seller and
Seller-affiliated entities on guaranties and other Loan Documentation, so that
Purchaser becomes the obligor on such guaranties and other documents and Seller
and Seller-affiliated entities would be released from liability from and after
the Closing Date pursuant to this Agreement. Any and all assumption and other
fees and charges and expense reimbursements charged by Mortgagee and/or Special
Servicer in connection with this transaction will be borne by Purchaser, if the
purchase transaction closes pursuant to this Agreement.
Both parties' obligations to sell and purchase the Assets pursuant to
this Agreement are conditioned upon the parties obtaining Mortgagee's approval
(AS DEFINED BELOW) of the transfer of the Assets, and Seller's obligations are
conditioned upon the parties obtaining Mortgagee's approval (AS DEFINED BELOW)
of a substitution of Purchaser for Seller and release of liability of Seller and
Seller-affiliated entities on the guaranties (as referenced above). AS USED IN
THIS SECTION, THE TERM "MORTGAGEE'S APPROVAL" MEANS THE UNCONDITIONAL EXECUTION
AND DELIVERY OF DOCUMENTS BY THE MORTGAGEE THAT IT REQUIRES TO EFFECT THE
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RESPECTIVE ACTION, CONDITIONED ONLY UPON (A) THE PAYMENT OF THE ASSUMPTION FEE
AND REIMBURSEMENT OF COSTS (IF NOT PREVIOUSLY PAID) AS PROVIDED IN THE LOAN
DOCUMENTS AND (B) THE CLOSING OF THE CONVEYANCE OF THE PROPERTIES TO PURCHASER.
The parties shall have until the Closing Date referenced in Section 7.1 below
(the "LOAN CONTINGENCY PERIOD") within which to attempt to obtain Mortgagee's
approval of the transfer of the Assets to Purchaser and such substitution and
release of liability. If, by the end of the Loan Contingency Period, the parties
have not obtained Mortgagee's approval (AS DEFINED ABOVE), then this Agreement
shall automatically terminate, this Agreement thereafter shall be null and void,
and neither party shall have any obligation to the other except as otherwise
stated herein.
THIS AGREEMENT IS BEING ENTERED INTO CONTINGENT UPON, AND SELLER'S
OBLIGATIONS ARE CONDITIONED UPON, BOTH THE EXECUTION AND CLOSING BY THE
PURCHASER UNDER THAT CERTAIN REAL ESTATE PURCHASE AND SALE AGREEMENT COVERING
CERTAIN OTHER PROPERTIES OWNED BY SELLER IN TUALATIN, WILSONVILLE AND GRESHAM
(THE "OTHER AGREEMENT"). SELLER MAY ELECT, IN ITS DISCRETION, TO TERMINATE THIS
AGREEMENT AT ANY TIME BY WRITTEN NOTICE TO PURCHASER IN THE EVENT THAT (I) THE
OTHER AGREEMENT IS NOT SIGNED BY SUCH PURCHASER, OR (II) IF THE OTHER AGREEMENT
IS SIGNED, THE OTHER AGREEMENT IS SUBSEQUENTLY TERMINATED FOR ANY REASON, OR
(III) IN THE EVENT THAT MORTGAGEE'S APPROVAL FOR THE SALE OF THE PROPERTY UNDER
THIS AGREEMENT TO PURCHASER AND OF THE OTHER PROPERTY TO THE PURCHASER UNDER THE
OTHER AGREEMENT IS NOT APPROVED OR IF SELLER IS UNABLE TO OBTAIN MORTGAGEE'S
APPROVAL, AS DEFINED ABOVE, FOR THE SEPARATION OF THE PROPERTY FROM THE
REMAINING PROPERTIES UNDER THE OTHER AGREEMENT AND SUBSTITUTION OF THE BUYING
PARTIES UNDER SUCH AGREEMENTS FOR SELLER. IF SELLER EXERCISES ITS RIGHT TO
TERMINATE UNDER THIS PARAGRAPH, THEN THIS AGREEMENT SHALL AUTOMATICALLY
TERMINATE, THIS AGREEMENT THEREAFTER SHALL BE NULL AND VOID, AND NEITHER PARTY
SHALL HAVE ANY OBLIGATION TO THE OTHER EXCEPT AS OTHERWISE STATED HEREIN.
3.9 UNDEVELOPED LAND. [THIS SECTION HAS BEEN INTENTIONALLY DELETED
BY THE PARTIES.]
3.10 OPTION TO PURCHASE THE UNDEVELOPED PARCEL. [THIS SECTION HAS
BEEN INTENTIONALLY DELETED BY THE PARTIES.]
3.11 FORFEIT OF DEPOSIT. If this Agreement is not terminated
pursuant to the provisions contained in Section 3.1, 3.7, or 3.8 hereof, then
the Deposit will constitute forfeitable earnest money that will belong to Seller
pursuant to Section 8.1 in the event Purchaser defaults in its obligation to
purchase the Assets for any reason OTHER THAN Seller's default.
4. SELLER'S TITLE TO THE PROPERTIES.
4.1 TITLE REPORTS. Seller has provided (or will provide, as set
forth in Section 3.1(d) above) to Purchaser copies of the Existing Title
Policies. Seller shall, at its expense, provide a preliminary title report on
each Property ("TITLE REPORTS") from First American
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Title Insurance Company (or affiliated title company which previously insured
Seller's title thereto) (the "TITLE AGENT"). The Title Report shall include a
commitment for a standard coverage owner's policy of title insurance
(collectively, the "TITLE POLICY"). The Title Report shall be accompanied by
legible copies of all special exceptions listed therein and shall confirm the
willingness (if applicable) of the Title Agent to issue such endorsements as
Purchaser may specify after review of the Title Reports (the "ENDORSEMENTS")
(however, the cost of any such Endorsements will be at Purchaser's expense).
Purchaser will promptly review and provide written notice to Seller of any
objections to matters shown on the Title Reports. Seller may (but will not be
required to) pursue correction of any title objections which Purchaser makes
during the Review Period.
Purchaser shall have until the end of the Review Period in which to
review and approve (IN PURCHASER'S SUBJECTIVE GOOD FAITH AND BUSINESS JUDGMENT
AND AT PURCHASER'S SOLE DISCRETION) such title insurance matters, including any
updated or supplemental Title Report based on any request for Endorsements or
any removal of a matter to which Purchaser may have objected.
4.2 UCC SEARCH. Seller will provide to Purchaser, at Seller's
expense, a report from a commercial search service disclosing the existence of
any UCC financing statements or liens recorded or filed against any portion of
the Properties or Seller's interest in the Assets (the "UCC REPORT").
4.3 TITLE DEFECTS. If Purchaser does not elect to cancel this
Agreement within the Review Period, then any prior objection to title matters
(other than any lien to be removed at Closing and which Seller has notified
Purchaser that it will remove) shall be deemed waived, and the Properties owned
by Seller shall be conveyed to the Purchaser subject to such title matters,
without affect upon or credit against the Purchase Price.
5. SELLER'S REPRESENTATIONS.
5.1 CONTENT OF REPRESENTATIONS. Seller represents, warrants and
covenants to Purchaser as follows:
(a) REVIEW DOCUMENTATION. Except to the extent
otherwise expressly waived by Purchaser in writing, Seller
shall make available to Purchaser for its review or deliver to
Purchaser copies of all of the Review Documentation, and any
amendments or corrections thereof to Purchaser, as and when
required by this Agreement.
(b) TRUE COPIES OF REVIEW DOCUMENTATION. To the
actual knowledge of Seller all copies of the Review
Documentation that Seller has previously provided to Purchaser
or hereafter provide to Purchaser in connection with this
Agreement are and shall be true and complete copies in all
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material respects.
(c) NO ADDITIONAL TITLE DEFECTS. Seller does not have
any actual knowledge of any encumbrance against Seller's
title, except for (i) matters that appear in the Existing
Title Policies and/or UCC Reports, (ii) the Leases with Joe's,
the Settlement Agreement with Joe's, the Office Depot
Sublease, the Loan Documentation with Mortgagee on all
Properties, an easement or agreement to enter into an easement
with Joe's with respect to the Joe's and Office Depot property
on Lancaster Drive in Salem, a (partially executed) attornment
agreement between Office Depot and the Mortgagee, the
non-disturbance and attornment agreements between Joe's and
such Mortgagee, and other pre-existing contractual agreements,
if any, as to which copies have been provided or made
available to Purchaser within the Review Period, and (iii) any
Permitted Exceptions (for purposes of the foregoing warranty,
the term "PERMITTED EXCEPTIONS" means: any matters appearing
in the surveys provided to Seller in connection with its
acquisition of the Property; any subsequent encroachments or
other matters that a current survey of the Property would show
(if performed); and any matters of record after the date of
the Existing Title Policies, but NOT including any matters
which would impair the use of the Property for its intended
purpose or its value; and any other matter disclosed to
Purchaser in writing within three (3) business days after the
Effective Date). From and after the Effective Date, Seller
shall not enter into any agreements that would create any
liens, easements, encumbrances, encroachments or other matters
affecting title that would attach to any of the Properties and
be binding on any of the Properties after the Closing Date,
without Purchaser's prior written consent.
(d) NO VIOLATION OF ZONING AND OTHER LAWS. To the
actual knowledge of Seller, the existing use of each Property
is not a nonconforming use and does not violate any
subdivision, zoning, building, health, environmental, personal
disabilities, fire or safety statute, ordinance, regulation or
code in any material respect. To the actual knowledge of
Seller, as of the date hereof, neither Seller nor any of the
agents and employees of Seller have received any written
notice from any governmental agency alleging violations of any
building codes, building or use restrictions, zoning
ordinances, rules and regulations. To the actual knowledge of
Seller the licenses, permits and other approvals required for
the construction and operation of the Improvements have been
issued and are in good standing. If, between the Effective
Date and the Closing Date Seller receives any written notice
or written citation of any alleged violation of any statute,
code or ordinance with respect to the Properties or the use
thereof, it shall promptly provide Purchaser with a true and
correct copy thereof.
<PAGE>
(e) NO UNDISCLOSED LITIGATION OR ACTIONS. To the
actual knowledge of Seller, there is no known pending or
threatened litigation or administrative action with respect to
Seller or the Properties.
(f) EMINENT DOMAIN. To the actual knowledge of
Seller, there is no pending or contemplated eminent domain,
condemnation or other governmental taking of the Properties or
any portion thereof.
(g) ACCESS TO PROPERTIES. To the actual knowledge of
Seller, the Properties have vehicular and pedestrian access to
public rights-of-way either by direct access onto the public
right-of-way or by recorded easement.
(h) SEPARATE TAX PARCEL. To the actual knowledge of
Seller, the Land and Improvements constitute a separate tax
parcel or parcels which does or do not include any other
property.
(i) ASSESSMENTS. To the actual knowledge of Seller,
there are no special or general assessments which are in
addition to those which will be disclosed in the Title Report
which have been levied against or are proposed for the
Property.
(j) NO BREACH OF AGREEMENTS. This Agreement and the
consummation of the transaction evidenced by this Agreement
will not violate any other agreement to which Seller is a
party (except that the consummation of this transaction will
require the consent by the Mortgagee, or its organizational
documents, or any law, statute or ordinance which is binding
upon the Properties or Seller, as applicable.
(k) CONTRACT DEFAULT. There exist no known material
defaults under any management, maintenance or service
contracts executed in connection with the Properties.
(l) NONFOREIGN STATUS. Seller warrants that it is not
a "foreign person" as defined in Section 1445 of the Internal
Revenue Code of 1954, as amended. Seller shall deliver to
Purchaser at closing a Certificate of Nonforeign Status
setting forth Seller's address and United States taxpayer
identification number and certifying that it is not a foreign
person as so defined (the "FIRPTA AFFIDAVIT").
(m) EXECUTORY AGREEMENTS. Attached to this Agreement
as EXHIBIT B is the list of any management, service and
maintenance and equipment leases for the Property held by
Seller (the "SERVICE CONTRACTS"). As to any listed on such
Exhibit, Seller warrants that there are no known defaults
<PAGE>
existing under any of the Service Contracts and all Service
Contracts are currently in full force and effect.
(n) GOVERNMENT OBLIGATIONS. There are no known
unperformed obligations which are currently due relative to
the Properties to any governmental or quasi-governmental body
or authority. To the actual knowledge of Seller, all water and
sewer hook-up fees and other fees payable in connection with
the annexation, zoning or improvement of the Land and which
are now due have been paid.
(o) UTILITY SERVICES. To the actual knowledge of
Seller, the Improvements are serviced by public electric, gas,
water, sewer and telephone utilities sufficient to operate
full-time the current businesses located thereon and there
exist no known unpaid connection, hook-up or similar charges
with respect thereto. To the actual knowledge of Seller, the
utilities serving the Improvements are on meters which do not
monitor any other property.
(p) ENVIRONMENTAL MATTERS. To the actual knowledge of
Seller, no portion of the Properties lies within a designated
wetland or other environmentally sensitive area, other than as
may be stated or referenced in the Review Documentation. If
not already shown in the Review Documentation, Seller has
disclosed, however, that a portion of the Wilsonville Property
is a wetland area. Except as stated or referenced in the
Assessments, Seller has not caused nor, to its actual
knowledge, has any other person caused during the period of
Seller's ownership (or leasehold interest) of the Properties,
any hazardous substance, waste or material to be used,
generated, stored or disposed of on or transported to or from
the Land or Improvements in violation of any Environmental
Laws, nor have any underground storage tanks or transformers
existed on or under the Land nor are there any
asbestos-containing materials present in the Improvements on
the Property. Except as stated or referenced in the
Assessments, to the actual knowledge of Seller, there are
presently no hazardous waste, substance or material on, under
or within the Properties. For the purposes of this Agreement,
"HAZARDOUS SUBSTANCE, WASTE OR MATERIAL" shall mean
petroleum-based products, asbestos, asbestos-containing
material, lead paint, PCBs and all other hazardous substances,
wastes or substances which are so defined in any Environmental
Laws.
(q) CONDITION OF IMPROVEMENTS. To the actual
knowledge of Seller, there are no known material defects in
any portion of the Improvements and the Improvements are not
infested with termite or other insects or animals. Conditions
caused by ordinary wear and tear and depreciation and which
ordinarily arise during the course of owning and operating
business at the Property shall not be considered "material
defects" for the purposes of this
<PAGE>
representation.
(r) NO OTHER ADVERSE CONDITIONS. To the actual
knowledge of Seller, there are no other facts, circumstances
or conditions which could have a material, adverse impact upon
the physical condition, value or permitted use of the
Properties or the ability of Seller to perform its respective
obligations under this Agreement or which would be likely to
cause any other representation hereto to become incorrect in
any material respect.
(s) STATUS OF ASSETS. Except for the first
opportunity in the Leases with Joe's, no person or entity has
a pre-emptive right or option to acquire the Assets, and no
portion of the Assets has been assigned.
(t) SELLER'S POWER AND AUTHORITY. Seller has and will
have full power and authority to: (i) execute and deliver this
Agreement and any other documents to be executed and delivered
by Seller in connection with this transaction (this Agreement
and such other documents, collectively, the "SELLER'S
DOCUMENTS"), (ii) sell, assign, and transfer the Assets to
Purchaser pursuant to the provisions hereof, and (iii)
consummate the transaction contemplated hereby. The Seller's
Documents are legal, valid and binding obligations of the
Seller and are enforceable against it in accordance with its
terms.
(u) NO KNOWN DEFAULT UNDER JOE'S LEASES. To the
actual knowledge of Seller, Joe's is not currently in default
in the payment of Base Rent (as defined in the Leases) or
under any other term of the Joe's Leases.
5.2 KNOWLEDGE DEFINED. To the extent that any of the foregoing
representations are limited "TO THE ACTUAL KNOWLEDGE" as to Seller or refer to
any matter "KNOWN" to Seller (or words of similar effect), then the following
applies: (i) such knowledge is limited to the actual (and not constructive)
knowledge of the principals of Seller that have been involved in the negotiation
of this Agreement or that are regularly involved in the operation or management
of real estate of Seller that includes the Property, and (ii) such knowledge
will not be construed to require Seller to have done any independent
investigation of the matter in question, or imply that Seller have made any such
investigations, and Seller will not have any liability to Purchaser for any
condition, event or circumstance that was not actually known by Seller.
5.3 SURVIVAL OF WARRANTIES. All of the warranties of Seller in
this Agreement shall be deemed given as of the date of this Agreement, but shall
be updated in a certificate provided to Purchaser at and as of the Closing Date
(which is the same document as described in Section 7.4 (a) below) (the
"CERTIFICATE"). SUCH CERTIFICATE WILL CONFIRM THAT THE REPRESENTATIONS AND
WARRANTIES BY SELLER IN THIS AGREEMENT ARE TRUE AND CORRECT IN ALL
<PAGE>
MATERIAL RESPECTS AS OF THE CLOSING DATE, SUBJECT TO AND EXCLUDING THEREFROM (A)
ANY MATTER CONTRARY TO THE REPRESENTATIONS AND WARRANTIES IN THIS AGREEMENT THAT
PURCHASER MAY HAVE DISCOVERED IN CONNECTION WITH ITS "DUE DILIGENCE" AND OTHER
INVESTIGATIONS AND REVIEW PRIOR TO SUCH DATE, AND (B) ANY MATTER THAT MAY BE
DISCLOSED ON AN ATTACHMENT TO THE CERTIFICATE WHICH WERE NOT KNOWN AS OF THE
EFFECTIVE DATE BUT WERE KNOWN BY SELLER AS OF THE CLOSING DATE.
6. CONDITIONS TO CLOSING; STRUCTURE.
6.1 PURCHASER'S CONDITIONS. Purchaser's obligation to close this
transaction is subject to the satisfaction of all of the following conditions:
(a) COMPLIANCE BY SELLER. The fulfillment by Seller
of each of its obligations under this Agreement in all
material respects, including, without limitation, the delivery
of all of the Review Documentation to Purchaser within the
Review Period.
(b) REPRESENTATIONS BY SELLER. The continuing
accuracy in all material respects of the warranties and
representations by Seller in this Agreement.
(c) STATUS OF TITLE. The absence of any monetary lien
or other material defect in title to the Properties unless
permitted by this Agreement or approved by Purchaser.
(d) PERMITTED USES. The absence of any material
violation of any applicable statute, law or regulation
regarding the physical condition of the Properties or the use
thereof for its current business purpose or of any change in
any laws or statutes which would adversely affect in any
material respect the ability of the Properties (or any of the
Properties) to be used for their (or its) current business
purposes.
(e) HAZARDOUS WASTE. The absence of Purchaser's
discovery of any hazardous material, waste or substance on or
about the Properties (i) which was not reported to Purchaser
in writing at least ten (10) days prior to the end of the
Review Period, (ii) which violates any applicable statute, law
or ordinance, and (iii) the cost of the abatement, removal or
disposal of which, to the full extent required by any
applicable statute, law or ordinance or which, in Purchaser's
reasonable judgment, is needed to avoid additional
contamination or pollution of the Properties or any adjoining
property, is likely to exceed one percent of the Purchase
Price for the Assets.
(f) MATERIAL CONDEMNATION. The absence of any
condemnation or
<PAGE>
the institution of condemnation proceedings which results in
the taking of any of the Improvements with a value of more
than Fifty Thousand Dollars ($50,000), or a reduction in the
number of any parking spaces below the minimum level required
by law for the current use of the Properties or the present
use of the Properties becoming a nonconforming use under
applicable law. If this transaction closes, Seller shall
assign to Purchaser on the Closing Date all condemnation
awards and rights to awards held by Seller which were not used
by Seller to pay the costs of any restorations of the Land or
Improvements necessitated by any such condemnation.
(g) MATERIAL CASUALTY. The absence of any material
damage by casualty to the Improvements which has not been
repaired by the Closing Date. For the purposes hereof, a
"MATERIAL DAMAGE BY CASUALTY" shall be deemed any damage by
fire or other casualty which has not been repaired and paid
for by the Closing Date and for which the estimated cost of
the remaining repairs exceeds Fifty Thousand Dollars
($50,000). If the Improvements suffer any material damage by
casualty Purchaser shall have the right and option to
terminate this Agreement within fifteen (15) days after the
date Purchaser is notified of the casualty in writing or by
the Closing Date, whichever first occurs. Seller shall also
have the right to cancel this Agreement if such material
damage by casualty is not covered by existing insurance
policies held by Seller, unless Purchaser is willing to reduce
the purchase price by the amount estimated to be necessary to
pay the labor and material costs to restore the damage. If
Purchaser does not elect to terminate this Agreement by the
Closing Date as a result of any material casualty damage, this
transaction shall close without increase or decrease in the
purchase price, and Seller shall assign to Purchaser all
insurance proceeds which are paid because of the casualty. If
the estimated cost to repair any damage by casualty as of the
Closing Date is less than Fifty Thousand Dollars ($50,000),
Purchaser shall not have the right to terminate this Agreement
because of such casualty and Seller shall assign to Purchaser
all insurance proceeds that are paid because of the casualty,
as stated above. All repair cost estimates referred to in this
paragraph shall be made by reference to a fixed price
construction contract which Seller shall obtain as promptly as
is reasonably possible after the date of the casualty.
6.2 SELLER'S CONDITIONS. Seller's obligations to close this
transaction are subject to Purchaser's fulfillment of each of its obligations
under this Agreement.
6.3 FAILURE OF CLOSING CONDITIONS. In the event any one or more of
the above conditions is not satisfied as of the Closing Date, or if the party
whom such condition is intended to benefit reasonably determines that the same
are not capable of being so satisfied by the Closing Date, such party may:
<PAGE>
(a) waive such condition by so advising the other
party in writing, whereupon this sale shall close in
accordance with the terms hereof and the purchase price shall
not be affected or adjusted;
(b) extend the Closing Date for up to ten (10) days
and, to the extent constituting a misrepresentation of a known
fact or default of the other party, require the
misrepresenting or defaulting party to use reasonable efforts
to attempt to satisfy the condition, to the extent feasible or
if capable of being satisfied by monetary payment; or
(c) elect to cancel this Agreement, in which event,
and EXCEPT to the extent the parties' remedies are otherwise
limited by this Agreement, the nonperforming party, if any,
shall continue to be liable to the other party hereto for its
actual direct damages and expenses caused by such failure or
inability to close this transaction.
6.4 PROPERTY EXCHANGE; STRUCTURE. IF PURCHASER ELECTS TO EFFECT A
PROPERTY EXCHANGE IN CONNECTION WITH ITS ACQUISITION OF THE PROPERTIES, Seller
agrees to cooperate, at no cost to Seller, with an Internal Revenue Code ("IRC")
Section 1031 exchange. However, this Agreement and Purchaser's obligations to
close are not, and will not be, contingent upon the transaction qualifying as an
IRC 1031 exchange. Seller's cooperating with an exchange shall not delay or
affect the Closing Date for the conveyance of the Property to Purchaser. Seller
is not responsible or liable in any manner to Purchaser, for the tax effects of
this transaction on Purchaser, and Purchaser is relying solely on its own
attorneys and tax advisors concerning such matters, the adequacy of legal
documentation required to effect the exchange, and the structure of the
exchange.
References in this Agreement to "SELLER" and "PURCHASER" are solely for
purposes of naming the parties. Such terms of reference to the parties, or to
this transaction as a "sale" or "purchase" transaction, shall not be construed
to affect the transaction as a property exchange transaction if Purchaser elects
to effect a property exchange.
7. CLOSING.
7.1 CLOSING DATE. This transaction will be closed, on a date
selected by Purchaser and reasonably acceptable to Seller, within fifteen (15)
calendar days after AND THE PARTIES OBTAIN MORTGAGEE'S APPROVAL, AS DESCRIBED IN
SECTION 6.3 AS TO THE CLOSING AND SUBSTITUTION OF THE BUYING PARTY UNDER THIS
AGREEMENT AND THE OTHER AGREEMENT FOR SELLER (BUT NOT LATER THAN THE DEADLINE
DATE STATED BELOW). At closing (the "CLOSING"), Seller will convey and assign
the Assets to Purchaser pursuant to this Agreement. Purchaser shall pay the
purchase price for the Assets in immediately available funds, and both parties
shall fulfill their respective closing obligations. The date on which the
Closing occurs is referred to as the "CLOSING DATE."
<PAGE>
Notwithstanding any other provision of this Agreement, unless otherwise
approved in a modification instrument mutually executed by both parties, the
Closing Date will not in any event be later than a "DEADLINE DATE" of OCTOBER
31, 2000.
7.2 MANNER AND PLACE OF CLOSING. This transaction will be closed
at the offices at a title company in Portland, Oregon, mutually acceptable to
the parties, or in the office of the counsel for Seller (Stoel Rives LLP, 900 SW
Fifth Avenue, Suite 2600, Portland, Oregon 97204-1268, Attention: Mark Norby or
David Green), or by such other person and at such other place as the parties may
mutually agree to in writing. Closing shall take place in the manner and in
accordance with the provisions set forth in this Agreement.
7.3 ADJUSTMENTS.
(a) Seller will pay one-half of the escrow fee
(if any).
(b) Purchaser will pay or have paid the
review/processing fees charged by Mortgagee and/or Special
Servicer in order to review this transaction and assumption
fee and other costs charged by Mortgagee and/or Special
Servicer in connection with the transfer of Assets and
assumption of the Loan Documentation, will pay one-half of the
escrow fee (if any), and will pay any endorsements or
additional title insurance coverage that Purchaser may desire.
(c) Rent from the Joe's Leases for the month in which
the Closing occurs will be prorated, and Seller shall be
entitled to withhold and retain the rent through the day prior
to the day on which the Purchase Price is paid to Seller. To
the extent Mortgagee holds rent previously paid which is
attributable to periods prior to closing, and is returnable to
Seller, Purchaser shall reimburse Seller for the amount of
such rent held but not yet disbursed by Mortgagee.
(d) Interest accrued but unpaid on the Mortgagee's
Loan will be prorated, and Purchaser will be credited for the
outstanding balance of principal and accrued interest as of
the day on which the Purchase Price is paid to Seller.
(e) As to Properties, taxes and operating expenses
which are the responsibility of Joe's as tenant under the
Leases will not be prorated.
(f) Seller shall pay the recording fees for the deeds
to Purchaser, the recording fees for the assignment of Leases
referred to below (if Purchaser elects to have it recorded),
and the premium(s) for standard coverage owner's title
insurance policies on the Property. Purchaser will pay for the
Purchaser
<PAGE>
Reports, one-half of the escrow fee (if any), and any
Endorsements or additional (or extended coverage) title
insurance coverage, other than that required to be provided by
Seller, that Purchaser may desire.
7.4 EVENTS OF CLOSING. This transaction will be closed on the
Closing Date as follows:
(a) Seller shall provide the Certificate to Purchaser
for the purpose of CONFIRMING THAT THE REPRESENTATIONS AND
WARRANTIES OF SELLER ARE TRUE AND CORRECT IN ALL MATERIAL
RESPECTS AS OF THE CLOSING DATE. If there have been any known
material changes in the warranties of Seller under this
Agreement, Seller will provide a written disclosure of the
known matters that have arisen that are changes to or in
conflict with the warranties in this Agreement, and Purchaser,
at its sole option, shall have the right to terminate this
Agreement and receive a refund of the Deposit..
(b) Seller shall provide Purchaser with the FIRPTA
Affidavit as provided in IRC ss. 1445.
(c) The Escrow Officer shall calculate the expenses
to be paid at Closing and the parties shall be charged and
credited accordingly.
(d) Purchaser shall pay the entire purchase price for
the Assets to Seller, in cash, less a credit for the
outstanding balance under the Loan, and as adjusted the
charges and credits set forth in this Agreement.
(e) Any liens to be paid by Seller at closing shall
be paid and satisfied of record at its expense.
(f) Seller shall convey the Properties that it owns
to Purchaser by statutory special warranty deed, in the form
attached as EXHIBIT F, subject only to the matters accepted
(or deemed accepted) by Purchaser pursuant to this Agreement.
The purchase price will be allocated between the Properties as
shown (or to be shown) on the attached EXHIBIT D.
(g) Seller shall convey its interest in any Personal
Property to Purchaser by good and sufficient Bill of Sale, in
the form attached as EXHIBIT G.
(h) Seller shall convey its interest in Leases
covering the Property to Purchaser by good and sufficient
assignment and assumption instrument, which includes (without
limitation) an assignment and assumption of Seller's right,
title and interest under the Leases and under the Settlement
Agreement with Joe's, in the form attached as EXHIBIT H.
Seller will provide letters to tenants
<PAGE>
in the form attached as an appendix to the assignment.
(i) Seller shall convey its interest in any
Intangible Property to Purchaser by good and sufficient
assignment, in the form attached as EXHIBIT I. SUCH DELIVERY
AND THE INCLUSION OF A PARAGRAPH WITH AN INDEMNITY BY SELLER
IN SUCH ASSIGNMENT WILL NOT CONSTITUTE A WARRANTY BY SELLER
THAT THERE ARE MATTERS BEING ASSIGNED UNDER SUCH ASSIGNMENT,
AND THE PARTIES EXPRESSLY ACKNOWLEDGE AND AGREE THAT THE
PURPOSE FOR DELIVERY OF SUCH ASSIGNMENT TO PURCHASER IS TO
CONVEY SELLER'S RIGHTS AND INTEREST, IF ANY, IN THE MATTERS
DESCRIBED THEREIN.
(j) The Title Agent shall commit to issue the title
insurance policies herein described upon recordation of the
closing documents. The Title Agent shall calculate the
expenses, if any, to be paid at Closing pursuant to this
Agreement and the adjustments referenced herein, and will
charge and credit the parties accordingly. The Title Agent
shall record the Seller's deeds to Purchaser and, if desired
by Purchaser, the assignment and assumption of Leases.
(k) Seller will assign to Purchaser its interest in
any insurance proceeds and/or condemnation awards as and to
the extent required by this Agreement.
(l) Each party will receive a copy of any Third Party
Documents obtained by Purchaser, and shall have executed all
documents agreed to by Seller, Purchaser and Mortgagee and
required for Mortgagee's consent to this transaction.
7.5 TITLE INSURANCE. As soon as possible after the Closing Date,
Seller shall furnish Purchaser a standard coverage form of owner's policy of
title insurance in the amount of the Purchase Price for the real Property and
Improvements owned by Seller, subject only to the Title Agent's standard
preprinted exceptions for such form and except for the matters accepted or
deemed accepted by Purchaser pursuant to this Agreement.
8. DEFAULTS AND FAILURE TO CLOSE.
8.1 SELLER'S REMEDIES. If Purchaser fails to complete this
purchase without legal excuse, Seller shall have the right to RECEIVE AND RETAIN
THE SUM of ONE Hundred Thousand Dollars ($100,000), and the parties do hereby
agree: (i) SUCH SUM IS hereby specifically agreed to be liquidated damages AND
HAS BEEN NEGOTIATED IN GOOD FAITH AND MUTUALLY APPROVED BY THE PARTIES; (ii)
such amount constitutes the parties' best reasonable attempt to estimate
Seller's damages that would be incurred in the event of such default; (iii) any
such damages would be extremely difficult and impractical to quantify; and (iv)
such damages are expressly
<PAGE>
intended to and shall constitute Seller's sole and exclusive remedy for such
default. Upon such failure by Purchaser to close without legal excuse, the
Deposit shall be released by the Escrow Agent to Seller AND PAID AS LIQUIDATED
DAMAGES TO SELLER PURSUANT TO the prior sentence. The limitation on Seller's
claims in this paragraph are conditioned, however, on Purchaser's promptly
executing and delivering to Seller an unconditional release of any right to
purchase or claim by Purchaser against the Property pursuant to this Agreement
and a delivery of Purchaser's entire work product as required by this Agreement
and, if Purchaser fails to do so promptly on request of Seller, Seller shall be
entitled to such remedies for breach of contract as may be available under
applicable law, including (without limitation) the remedy of specific
performance of this Agreement and the right to recover its actual and
consequential damages. Seller shall also have the right to seek specific
enforcement of this Agreement.
8.2 PURCHASER'S REMEDIES. If Seller fails to complete this sale
without legal excuse, Purchaser shall be entitled to such remedies for breach of
contract as may be available under applicable law, including (without
limitation) the remedy of specific performance of this Agreement and the right
to recover its actual and consequential damages. Purchaser shall also have the
right to seek specific enforcement of this Agreement.
8.3 DEFAULTS. Except for Seller's obligation to provide the Review
Documentation to Purchaser within the Review Period or the parties' wrongful
failure to close or to satisfy any condition to closing by the required Closing
Date, no party shall be deemed in default under this Agreement unless such party
is given written notice of its failure to comply with this Agreement and such
failure continues for a period of five (5) calendar days following the date such
notice is given. This section will not, however, toll or extend the time period
for closing.
8.4 COSTS AND ATTORNEYS' FEES. In the event suit, action,
arbitration or mediation is instituted to interpret or enforce the terms of this
Agreement, the prevailing party shall be entitled to recover from the other
party such sum as the court, arbitrator or mediator may adjudge reasonable as
costs and expert witness and attorneys' fees at trial, on any appeal, and on any
petition for review, in addition to all other sums provided by law.
9. CONDUCT OF BUSINESS.
9.1 CONTINUATION OF PERFORMANCE UNDER CONTRACTS. From the
Effective Date of this Agreement until the Closing Date, Seller (in its
commercially reasonable judgment) shall comply with and perform all of its
obligations as and when required by any agreements, leases or contracts with
respect to the Properties and shall continue to operate the Properties in
accordance with customary and prudent management and operating standards and
practices and will take no steps or actions which it knows would be detrimental
to the value or future potential of the Properties.
9.2 INSURANCE. Seller shall continue to maintain the current
casualty and liability
<PAGE>
insurance policies on the Properties (if maintained by it and not by the
tenants) until the Closing Date.
9.3 LEASES AND SERVICE CONTRACTS. Between the Effective Date of
this Agreement and the Closing Date, Seller shall not enter into any material
leases of the Properties or any portion thereof or any new Service Contracts
that would be binding on Seller after the Closing Date, without Purchaser's
prior written consent.
9.4 PROPERTY MAINTENANCE. Seller agrees to maintain and repair the
Properties between the Effective Date of this Agreement and the Closing Date (if
maintained by it and not by the tenants) so as to cause the same to be delivered
to Purchaser in substantially the same condition existing as of the Effective
Date, ordinary wear and tear and depreciation excepted. Between the Effective
Date and the Closing Date, Seller shall promptly notify Purchaser regarding any
item of repair, replacement or maintenance of which Seller becomes aware that is
not the obligation of tenants and which requires an expenditure in excess of
Fifty Thousand Dollars ($50,000).
9.5 BOOKS AND RECORDS. Seller shall continue to maintain its
current books and records relating to the Properties until the Closing Date.
9.6 NO MARKETING. Seller shall not actively market, offer the
Properties or any portion thereof for sale or solicit or accept offers to
purchase the Properties or any portion thereof so long as this Agreement is in
effect, EXCEPT FOR any back-up offers that are expressly terminable by notice to
the buyer if Purchaser closes the purchase and that expressly put the buyer on
notice that Purchaser is the intended purchaser of the Properties.
10. INDEMNIFICATION.
10.1 INDEMNIFICATION BY SELLER. Seller agrees to defend, indemnify
and hold Purchaser harmless from and against and reimburse Purchaser for all
claims, damages, losses and attorneys' fees which are caused by the failure of
Seller to perform any obligation under any lease or contract on the Properties
owned by it prior to the Closing Date or for which Seller is responsible in
accordance with the terms of this Agreement.
10.2 INDEMNIFICATION BY PURCHASER. Purchaser agrees to defend,
indemnify and hold Seller harmless from and against, and reimburse SELLER for,
all claims, damages, losses and attorneys' fees which are caused by the failure
of Purchaser to perform any obligation under any lease or contract on the
Properties on or after the Closing Date or for which Purchaser is responsible in
accordance with the terms of this Agreement.
10.3 IDENTIFICATION OF AND INDEMNIFICATION AS TO PRINCIPALS. Part
of Seller's willingness to accept and approve the Purchase Price stated in this
Agreement was Seller's determination that no broker's commission would be owed
to any party OTHER THAN the
<PAGE>
Broker(s) identified in Section 11.3 based on the following representations by
Purchaser: (i) Purchaser represents to Seller that neither Purchaser nor any of
Purchaser's principals were involved in any negotiation with, or were introduced
to the any of the Properties or to this transaction by, Seller's former broker
(either directly or through another broker or agent); (ii) the following is now,
and will be at closing, the only PERSON which is involved in this transaction:
PURCHASER (OR ANY LIMITED LIABILITY COMPANY OR OTHER HOLDING ENTITY THAT
PURCHASER MAY FORM TO ACQUIRE THE PROPERTIES). Purchaser's indemnification as
set forth above will extend to any claim for a commission or other payment that
may be legally owed to Seller's former broker if the foregoing representations
are not true as of the date of this Agreement or (to the extent applicable) as
of the Closing Date.
10.4 SURVIVAL AND SCOPE OF INDEMNIFICATION. The indemnifications
contained in this Section shall survive the closing of this transaction and are
non-exclusive with any other rights of indemnification contained in this
Agreement.
11. LEGAL RELATIONSHIPS.
11.1 PARTIES' AUTHORITY. As to Seller, the act, instruction, waiver,
consent, and giving and receipt of notices of or by any of the officers of
Seller, or of the agent or entity that signed for Seller, as shown below shall
be deemed that of Seller, and Purchaser shall have no duty to inquire into such
persons' authority.
As to Purchaser, the act, instruction, waiver, consent, and giving and
receipt of notices of or by THE PERSON WHO SIGNS THIS AGREEMENT (AS SHOWN BELOW)
shall be deemed that of Purchaser, and Seller shall have no duty to inquire into
any such person's authority.
11.2 DESCRIPTION OF TRANSACTION. This Agreement creates only the
relationship of seller and buyer and no joint venture, partnership or other
joint undertaking is intended hereby, and neither party hereto shall have any
rights to make any representations or incur any obligations on behalf of the
other. Neither Seller nor Seller nor Purchaser has authorized any agent to make
any representations, admit any liability or undertake any obligation on its
behalf. No party is executing this Agreement on behalf of an undisclosed
principal, and no third party is intended to be benefitted by this contract.
11.3 REAL ESTATE COMMISSIONS. Purchaser is represented by ROBERT
NIEHAUS & CO. ("BROKER") (WHO WILL BE RESPONSIBLE FOR SHARING THE COMMISSION
STATED BELOW WITH THE BROKER USED BY SELLER, IN ACCORDANCE WITH THE TERMS OF A
SEPARATE AGREEMENT BETWEEN BROKER AND SELLER'S BROKER). Seller agrees to pay a
commission equal to ONE HUNDRED THREE THOUSAND THREE HUNDRED AND FOUR DOLLARS
($103,304.00), if and when this transaction closes and Purchaser pays the
Purchase Price to Seller. TO THE EXTENT NECESSARY TO DO SO, THE PARTIES AGREE
THAT PURCHASER'S BROKER MAY ALSO BE DEEMED TO BE A BROKER OF SELLER FOR PURPOSES
OF DETERMINING THE ENTITLEMENT TO SUCH SHARE OF THE COMMISSION AND CONSENT TO
SUCH DUAL REPRESENTATION. Each party shall indemnify, defend and hold the other
<PAGE>
party harmless against all claims made for any commission or finder's fee by any
person other than such Brokers and which arise in connection the parties' own
conduct or agreements (EXCEPT THAT PURCHASER WILL INDEMNIFY SELLER IN THE EVENT
OF ANY CLAIM MADE BY SELLER'S FORMER BROKER, IN THE EVENT PURCHASER'S
REPRESENTATIONS IN SECTION 10.3 ARE INACCURATE OR INCOMPLETE).
11.4 INDEMNIFIED PARTIES. Any indemnification contained in this
Agreement for the benefit of a party shall extend to the party's officers,
employees, and agents.
11.5 ASSIGNMENTS AND SUCCESSORS. Neither party shall assign this
Agreement or its rights or obligations without the other party's prior written
consent in each instance, subject to the provisions of this Agreement. Subject
to the foregoing, this Agreement shall bind and inure to the benefit of the
parties hereto and their respective successors and assigns. The restrictions in
this paragraph will not restrict: (I) any transfer of interest by Purchaser
AFTER the date on which this transaction is closed and Seller and its principals
are fully released from liability on the Loan Documentation (but any such
transfer will remain subject to the conditions and requirements of the Loan
Documentation and may be a default thereunder); OR (II) ANY ASSIGNMENT TO AN
EXCHANGE ACCOMMODATION PARTY (EFFECTIVE AT CLOSING) IN ORDER TO CONSUMMATE A TAX
DEFERRED PROPERTY EXCHANGE (BUT THE CONVEYANCE OF THE PROPERTY PURSUANT TO SUCH
EXCHANGE WILL BE TO PURCHASER).
12. CONSTRUCTION OF AGREEMENT.
12.1 CONSIDERATION. Seller and Purchaser agree that while Purchaser
retains the right to disapprove of any of the Due Diligence Reports or the
results of Property-related tests or inspections as stated in this Agreement and
as a result may elect not to purchase the Assets, each party will be incurring
certain nonreimbursable expenses and foregoing other transactional opportunities
and that such provides sufficient consideration for the enforceability of this
Agreement, notwithstanding whether any earnest money is paid hereunder, and each
of the parties hereto waives any right to claim or allege that there exists
insufficient consideration therefor.
12.2 TAX AND ACCOUNTING CONSEQUENCES. Each of the parties hereto
acknowledges and agrees that neither party has made any representation as to how
this Agreement, or any given income, expense, liability, deduction, or credit
related thereto shall be treated or characterized for any federal, state or
local income or other tax or accounting purposes, and each party shall rely
solely upon its own tax advisors and accountants with respect thereto. This
Agreement is not and shall not be conditioned upon how this transaction or any
portion thereof or any interests in the Properties are treated for any tax or
accounting purposes under any past, existing or future tax statute, ordinance,
regulation or standard.
12.3 NOTICES. Notices under this Agreement shall be in writing and if
personally delivered or telefaxed shall be effective when received. If mailed, a
notice shall be deemed
<PAGE>
effective on the second day after deposited as registered or certified mail,
postage prepaid, directed to the other party. Notices shall be delivered, mailed
or telefaxed to the following address and telephone numbers:
Seller: WREP-1998-1 LLC
c/o Wilshire Real Estate Investment Inc.
1631 SW COLUMBIA
Portland, Oregon 97201
Attn: Andrew Wiederhorn, CEO
(OR, IF MAILED, THEN TO: Wilshire Real Estate Investment Inc.,
PO Box 2665, Portland, Oregon 97208,
Attn: Andrew Wiederhorn, CEO)
Direct Dial No.: (503) 553-7301
Telefax: (503) 721-6501
WITH A COPY TO:
Stoel Rives LLP
900 SW Fifth Avenue, Suite 2600
Portland, Oregon 97204-1268
Attn: David W. Green, Maureen Flanagan and Mark Norby
Telefax No.: (503) 220-2480
Telephone: (503) 224-3380
Purchaser: WATUMULL PROPERTIES CORP.
Address:
307 Lewer Street, Suite 600
Honolulu, HI 96815
Attn: S.D. Watumin
Phone No.: (808) 971-8814
Telefax No.: (808) 971-8824
Any person may change its address for notices by at least two business days'
advance written notice to the other.
12.4 TIME OF ESSENCE. Except as otherwise specifically provided in this
Agreement, time is of the essence of each and every provision of this Agreement.
12.5 INVALIDITY OF PROVISIONS. If any provision of this Agreement, or
any instrument to be delivered by Purchaser at closing pursuant to this
Agreement, is declared invalid or is unenforceable for any reason, such
provision shall be deleted from such document and shall not invalidate any other
provision contained in the document.
12.6 NEUTRAL CONSTRUCTION. This Agreement has been negotiated with each
party
<PAGE>
having the opportunity to consult with legal counsel and shall not be construed
against either party.
12.7 CAPTIONS. The captions of the Sections are used solely for
convenience and are not intended to alter or confine the provisions of this
Agreement.
12.8 WAIVER. The failure of any party at any time to require
performance of any provision of this Agreement shall not limit the party's right
to enforce such provision. Waiver of any breach of any provision shall not be a
waiver of any succeeding breach of the provision or a waiver of the provision
itself or any other provision.
12.9 SUBSEQUENT MODIFICATIONS. This Agreement and any of its terms may
only be changed, waived, discharged or terminated by a written instrument signed
by the party against whom enforcement of the change, waiver, discharge or
termination is sought.
12.10 SATURDAY, SUNDAY AND LEGAL HOLIDAYS. If the time for performance
of any of the terms, conditions and provisions hereof shall fall on a Saturday,
Sunday or legal holiday, then the time of such performance shall be extended to
the next business day thereafter.
12.11 VENUE. In any action brought to interpret or enforce any of the
provisions of this Agreement, the venue of same shall be laid in any county in
which the Property is located or in Multnomah County, Oregon, at the option of
the person instituting the suit. Each party irrevocably waives any argument or
claim that such venue is inconvenient.
12.12 APPLICABLE LAW. This Agreement shall be construed, applied and
enforced in accordance with the laws of the State of Oregon. All sums referred
to in this Agreement shall be calculated by and payable in the lawful currency
of the United States.
12.13 NO OFFER. The presentation and negotiation of this Agreement
shall not be construed as an offer by Purchaser to acquire the Property or of
Seller to sell, or obligate either party, unless and UNLESS AND UNTIL this
Agreement has been executed by both parties.
12.14 ENTIRE AGREEMENT. From the Effective Date, this Agreement and the
Confidentiality Agreement constitute the entire agreement of the parties with
respect to the sale of the Assets to Purchaser and supersedes and replace all
written and oral agreements (including, without limitation, the offer or letter
of intent) previously made or existing between the parties.
12.15 COUNTERPARTS. This Agreement may be executed simultaneously or in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same contract.
12.16 JOINDER BY WREP AND WREP MEMBER. WREP and WREP Member are
<PAGE>
joining in this Agreement for purposes of agreeing to its execution by Seller
and agreeing to comply with its terms and consummate the sale of the Assets, as
described herein.
THE PROPERTY DESCRIBED IN THIS INSTRUMENT MAY NOT BE WITHIN A FIRE PROTECTION
DISTRICT PROTECTING STRUCTURES. THE PROPERTY IS SUBJECT TO LAND USE LAWS AND
REGULATIONS, WHICH, IN FARM OR FOREST ZONES, MAY NOT AUTHORIZE CONSTRUCTION OR
SITING A RESIDENCE AND WHICH LIMIT LAWSUITS AGAINST FARMING OR FOREST PRACTICES
AS DEFINED IN ORS 30.930 IN ALL ZONES. BEFORE SIGNING OR ACCEPTING THIS
INSTRUMENT, THE PERSON ACQUIRING FEE TITLE TO THE PROPERTY SHOULD CHECK WITH THE
APPROPRIATE CITY OR COUNTY PLANNING DEPARTMENT TO VERIFY APPROVED USES AND
EXISTENCE OF FIRE PROTECTION FOR STRUCTURES.
[NO MORE TEXT ON THIS PAGE]
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the day and year first above written.
SELLER: PURCHASER:
WREP-1998-1 LLC, AN OREGON LIMITED WATUMULL PROPERTIES CORP., A(N)
LIABILITY COMPANY HAWAIIAN corporation
By: WREP-1998-1Member Inc.,
its manager
By: /S/ LARRY MENDELSOHN By: /S/ GULAB WATMULL
Printed Name:LARRY MENDELSOHN Printed Name: Gulab Watmull
Its: PRESIDENT Its: PRESIDENT
BY: /S/ MARK H. PETERMAN
PRINTED NAME: MARK H. PETERMAN
ITS: SECRETARY
JOINED IN TO BY THE UNDERSIGNED,
FOR THE PURPOSES STATED IN THIS
AGREEMENT
WILSHIRE REAL ESTATE
PARTNERSHIP L.P.
BY: WILSHIRE REAL ESTATE
INVESTMENT INC.,
ITS GENERAL PARTNER
BY: /S/ LARRY MENDELSOHN
Printed Name: LARRY MENDELSOHN
Its: PRESIDENT
WREP-1998-1 MEMBER INC.
BY: /S/ MARK H. PETERMAN
PRINTED NAME: MARK H. PETERMAN
ITS: SECRETARY
<PAGE>
EXHIBIT A-1
LEGAL DESCRIPTION OF THE PROPERTIES
See attached.
<PAGE>
G.I. JOES
SALEM, OREGON
TRACT 1:
275 LANCASTER DRIVE NE
SALEM, OREGON 97301
Parcel 1 of PARTITION PLAT NO. 93-106, recorded November 3, 1003 in Reel 1117 at
Page 580, Marion County, Oregon.
TRACT 2:
255 LANCASTER DRIVE NE
SALEM, OREGON 97301
Parcel 2 of PARTITION PLAT NO. 93-106, recorded November 3, 1993 in Reel 1117 at
Page 580, Marion County, Oregon.
<PAGE>
G.I. JOES
MILWAUKIE, OREGON
15600 SE MCLOUGHLIN BLVD.
MILWAUKIE, OREGON 97267
A part of the S.H. Walker Donation Land claim, a part of Tract 1, SPAULDING
ACRES, a part of Tracts 17, 19 and all of Tract 18, CONCORD, in the County of
Clackamas and State of Oregon, more particularly described as follows:
BEGINNING at the intersection of the Easterly right of way line of Oregon State
Highway 99 E. (McLoughlin Blvd.) and the Northerly right of way line of Concord
Avenue; thence North 28E05' West, along the Easterly right of way line of said
Highway 1073.28 feet to a 5/8-inch iron rod in the Southeasterly line of Risley
Avenue; thence tracing said Southeasterly line North 52E59'20" East 473.78 feet
to a 5/8-inch iron rod in the Southwesterly line of Olive Avenue, as it
presently exists; thence tracing the said Southwesterly line of Olive Avenue, as
presently exists, South 40E07'39" East 410.24 feet to a 5/8-inch iron rod;
thence South 37E00'37" East 291.92 feet; along the Southwesterly right of way
line of Olive Avenue, as it exists, to an iron rod at the most Northerly corner
of a tract conveyed to School District No. 28, by deed recorded in Book 36, Page
311, Deed Records of Clackamas County; thence South 62E51'43" West 106.72 feet
to the most Northerly corner of the said Walker Donation Land Claim; thence
South 27E19'14" East along the Northeasterly line of said Donation Land Claim,
214.82 feet to an iron rod; thence South 66E26'22" West 263.74 feet to an iron
rod; thence South 27E19'14" East 250 feet to the Northerly right of way line of
Concord Avenue; thence South 66E26'38" West 231 feet to the place of beginning.
TOGETHER WITH that portion of vacated Olive Avenue which attached thereto
pursuant to vacation thereof by Ordinance No. 77-879 of Clackamas County a
certified copy of which recorded June 20, 1977 as Recorder's Fee No. 77 23737.
EXCEPTING THEREFROM a tract of land in Lots 17 and 18, CONCORD, in the County of
Clackamas and State of Oregon, being more particularly described as follows:
BEGINNING at the intersection of the Easterly right of way line of Oregon State
Highway 99 E. (McLoughlin Blvd.) and the Southeasterly line of Risley Avenue;
thence tracing said Southeasterly line North 52E59'20" East a distance of 150
feet to a point; thence South 28E05' East parallel with the Easterly line of
said McLoughlin Blvd., a distance of 200 feet to a point; thence South 52E59'20"
West parallel with the Southeasterly line of Risley Avenue 150 feet to a point
on the Easterly line of McLoughlin Blvd.; thence North 28E05' West along said
Easterly line 200 feet to the point of beginning.
<PAGE>
ALSO EXCEPTING THEREFROM a tract of land in the East one-half of Section 12,
Township 2 South, Range 1 East, of the Willamette Meridian, in the County of
Clackamas and State of Oregon, further described as follows:
BEGINNING at a point in the Southeasterly line of Risley Avenue that is 150.00
feet Northeasterly from the intersection of said line with the Northeasterly
line of McLoughlin Blvd.; thence North 52E59'20" East along the Southeasterly
line of Risley Avenue 323.78 feet to an iron rod at the intersection of said
line with the Southwesterly line of Olive Avenue as it presently exists; thence
south 40E07'39" East along said Southwesterly line of Olive Avenue as it
presently exists, 410.24 feet to a 5/8-inch iron rod; thence South 37E00'37"
East along the Southwesterly line of Olive Avenue, as it presently exists,
125.56 feet; thence South 63E55' West 574.96 feet to a point in the
Northeasterly line of McLoughlin Blvd.; thence North 28E05' West along said
Northeasterly line 251.39 feet to a point that is 200.00 feet Southeasterly from
the intersection of said line with the Southeasterly line of Risley Avenue;
thence North 52E59'20" East, parallel with the Risley Avenue, 150.00 feet;
thence North 28E05' West, parallel with McLoughlin Blvd., 200.00 feet to the
place of beginning.
<PAGE>
EXHIBIT B
LIST OF SERVICE CONTRACTS
Seller has no Service Contracts (as defined in this Agreement) on the Properties
as of the date of execution of this Agreement that would be binding on Seller as
of the Closing Date.
<PAGE>
EXHIBIT C-1
TRANSFERABLE RESERVES
Reserve balances that Banc ONE/ORIX REAL ESTATE CAPITAL MARKETS, LLC SHOWS AS OF
MAY 11, 2000, FOR THE PROPERTIES COVERED BY THIS AGREEMENT AND THE PROPERTIES
COVERED BY THE OTHER AGREEMENT ARE APPROXIMATELY:
Monthly Deposit Current Balance
Replacement Reserve $10,764.00* $[269,467.92]*
Leasing Reserve $11,942.80* $[298,976.22]*
Property Tax Reserve $26,677.57* $[216,291.24]*
Insurance Reserve $ 2,058.66* $ [55,591.98]*
[All the above reserves were put up by G.I. Joe's. Seller's interest in such
reserves will be transferred to Purchaser, at closing. Balances, of course, will
change as additional reserve payments are made and as reserves may be used to
pay property taxes or insurance.]
<PAGE>
EXHIBIT C-2
IMMEDIATE RESERVES
THE "IMMEDIATE RESERVES" COVERED BY THIS AGREEMENT ARE THE ALLOCABLE PORTION OF
CERTAIN RESERVES/FUNDS HELD BY SPECIAL SERVICER/LENDER IN CONNECTION WITH THE
PROPERTIES. SUCH RESERVES/FUNDS ARE FOR THE PROPERTIES COVERED BY THIS AGREEMENT
AND THE PROPERTIES COVERED BY THE OTHER AGREEMENT, THE BALANCES OF WHICH ARE
(APPROXIMATELY) as described on the attached Schedule. Balances shown are
approximate. Seller will provide an updated statement or information on such
Immediate Reserves within ten (10) days after the Effective Date.
SELLER IS CURRENTLY PROPOSING TO JOE'S A CHANGE IN THE HANDLING OF THE IMMEDIATE
RESERVES, IN ORDER TO DISTRIBUTE TO SELLER THE MONEYS CURRENTLY HELD IN A
SEPARATE ESCROW ACCOUNT AT PACIFIC NORTHWEST TITLE AND TO AGREE UPON A DIVISION
OF OWNERSHIP OF THE REQUIRED REPAIR RESERVE FUNDS HELD BY ORIX REAL ESTATE
CAPITAL MARKETS, LLC. THE NET EFFECT OF SUCH ACTIONS WOULD BE TO REDUCE (TO LESS
THAN $100,000, IT IS ESTIMATED) THE AMOUNT OF PURCHASER'S FUNDS THAT WOULD BE
REQUIRED TO BE PAID AT CLOSING PURSUANT TO SECTION 3.6 TO REPLACE SELLER'S FUNDS
FOR PURCHASER'S FUNDS IN THE IMMEDIATE RESERVEs.
<PAGE>
IMMEDIATE RESERVES FOUND IN ORIGINAL DOCUMENT
<PAGE>
SCHEDULE TO EXHIBIT C
LENDER AND SPECIAL SERVICER CHARGES AND FEES (SECTION 3.8)
SELLER WILL PROMPTLY FORWARD TO PURCHASER A COPY OF ANY LETTER OR DOCUMENT
RECEIVED FROM MORTGAGEE OR SPECIAL SERVICER THAT PERTAINS TO CHARGES OR FEES
THAT SUCH ENTITIES MAY REQUIRE IN CONNECTION WITH THE APPROVAL OF THIS
TRANSACTION. BASED ON A PRIOR TRANSACTION AND REQUEST FOR APPROVAL BY SUCH
PARTIES WITH RESPECT TO AN UNCOMPLETED TRANSACTION, SELLER HAS DISCLOSED TO
PURCHASER AN ESTIMATE BY SELLER OF THE LIKELY CHARGES AND FEES PAYABLE TO
MORTGAGEE, SPECIAL SERVICER AND THE RATING AGENCIES IN CONNECTION WITH THIS
TRANSACTION (BUT THIS ESTIMATE IS ONLY A "GOOD FAITH" ESTIMATE BY SELLER AND
WILL NOT BE CONSTRUED AS A COMMITMENT OR WARRANTY THAT SUCH CHARGES AND FEES FOR
THE TRANSACTION WILL BE THE SAME AS, OR LESS THAN, SELLER'S ESTIMATE).
<PAGE>
EXHIBIT D
ALLOCATION SCHEDULE
The allocation of the purchase price to the respective Property is attached or
will be mutually and reasonably approved during the Review Period and attached
as this Exhibit. If no such mutual agreement is entered into, then the total
Purchase Price will be allocated to each Property in the same proportion as used
in the purchase transaction under which Seller acquired the Properties.
<PAGE>
EXHIBIT E
[RESERVED, IF NEEDED FOR USE]
<PAGE>
EXHIBIT F
FORM OF DEED
(See Attached)
<PAGE>
Recordation Requested by
and
After recordation return to:
Stoel Rives LLP
Attention: David W. Green
900 SW Fifth Avenue,
Suite 2600
Portland, OR 97204-1268
(Space reserved for recorder's use)
================================================================================
STATUTORY
SPECIAL WARRANTY DEED
(CITY, STATE)
-------------, Grantor, conveys and specially warrants to
---------------, Grantee, the real property described on EXHIBIT "A" attached
hereto, which real property is free of encumbrances created or suffered by
Grantor, except as specifically set forth on the attached EXHIBIT "B".
The true consideration for this conveyance is: $-------------.
THIS INSTRUMENT WILL NOT ALLOW USE OF THE PROPERTY DESCRIBED
IN THIS INSTRUMENT IN VIOLATION OF APPLICABLE LAND USE LAWS AND REGULATIONS.
BEFORE SIGNING OR ACCEPTING THIS INSTRUMENT, THE PERSON ACQUIRING FEE TITLE TO
THE PROPERTY SHOULD CHECK WITH THE APPROPRIATE CITY OR COUNTY PLANNING
DEPARTMENT TO VERIFY APPROVED USES AND TO DETERMINE ANY LIMITS ON LAWSUITS
AGAINST FARMING OR FOREST PRACTICES AS DEFINED IN ORS 30.930.
DATED this _____ day of -------------------, 2000.
By:
Its:
By:
Its:
================================================================================
Until a change is requested, all tax statements shall be sent to the following
address:
Property Tax Account No.:
================================================================================
STATE OF OREGON )
<PAGE>
) ss.
County of Multnomah )
On ______________ ____, 2000, before me personally appeared and
________________, who is personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person whose name is subscribed to this
instrument, and acknowledged that he executed the same in his/her authorized
capacity as the ________________ and________________ of --------------, and that
by this signature on the instrument such person executed the instrument on
behalf of such entity.
Notary Public in and for said State
My commission expires:
Residing at:
<PAGE>
EXHIBIT A
REAL PROPERTY DESCRIPTION
(City, State)
SEE ATTACHED.
<PAGE>
EXHIBIT B
EXCEPTIONS TO TITLE
The exceptions to the warranties contained herein are as follows:
<PAGE>
EXHIBIT G
FORM OF BILL OF SALE
(See Attached)
<PAGE>
BILL OF SALE
DATED:
BETWEEN: [WILSHIRE]
Seller
AND: [WATUMULL]
Purchaser
FOR VALUE RECEIVED, Seller hereby conveys, warrants and
assigns to Purchaser all items of furniture, fixtures, and equipment and other
personal property as referenced in the attached EXHIBIT B ("PERSONAL PROPERTY"),
located at or used in connection with the real property described on the
attached EXHIBIT A-1 ("PROPERTY"), other than and excluding the trade fixtures
and other personal property owned by tenants of such Property (except for
Seller's reversionary interest, if any, therein).
TO HAVE AND TO HOLD such Personal Property unto Purchaser and
Purchaser's successors and assigns forever.
Seller covenants and warrants with Purchaser that: (i) Seller
is the owner of such Personal Property free and clear of any liens or
encumbrances, security interests or claims by third parties, except for personal
property taxes not delinquent and except for the matters (if any) shown on the
attached Exhibits; (ii) Seller has the right and authority to sell the Personal
Property to Purchaser; and (iii) Seller will warrant and defend the Personal
Property against the lawful claims and demands of all persons, other than on
account of such personal property taxes and the matters shown in the attached
Exhibits.
IN WITNESS WHEREOF, the undersigned have executed this Bill of
Sale as of the day and year first set forth above.
SELLER:
By:
Its:
By:
Its:
<PAGE>
EXHIBIT A-1
REAL PROPERTY DESCRIPTIONS
(SEE ATTACHED.)
<PAGE>
EXHIBIT B
PERSONAL PROPERTY DESCRIPTION
Seller's right, title and interest in: all furnishings,
fixtures (including any of Seller's interest in trade fixtures), appliances,
furniture, supplies, equipment, inventory, building materials, building supplies
and equipment as generally set forth below, and the following tangible and
intangible personal property of Seller, including any contract rights and other
general intangibles relating to the development or use of the Property described
in EXHIBIT A-1 or the Personal Property, including (without limitation)
governmental permits relating to construction on the Property, all names under
or by which the Property or improvements thereon may at any time be operated or
known, all rights to carry on business under such names and all trademarks and
goodwill in any way related to the Property and general intangibles from and
relating to any leases, tenancies, occupancy or uses of the property described
below, and documents of membership in any owners' or members' association or
similar group having any responsibility for managing or operating any part of
the Property and any lease or other use agreement (if any should ever be
considered personal property), located on or used in connection with the
operation of the real Property described in the attached EXHIBIT A-1; EXCLUDING,
HOWEVER, THEREFROM (i) the trade fixtures, furnishings, equipment and personal
property owned by tenants of such Property that such tenants are entitled to
remove at the end of their lease terms and which do not revert to the owner of
the Property, and (ii) any of the foregoing that are not owned by, or revert to,
Seller.
<PAGE>
EXHIBIT H
FORM OF ASSIGNMENT AND ASSUMPTION OF LEASES
(See Attached)
<PAGE>
AFTER RECORDATION RETURN TO
SPACE ABOVE THIS LINE FOR RECORDER'S USE
--------------------------------------------------------------------------------
ASSIGNMENT AND ASSUMPTION OF LEASES
THIS ASSIGNMENT AND ASSUMPTION OF LEASES dated _____ , 200 ___ (the
"ASSIGNMENT"), is entered into by and between ------------------ ("ASSIGNOR"),
and ----------- ("ASSIGNEe").
WITNESSETH:
WHEREAS, Assignor is the lessor under certain leases executed with
respect to that certain real property described in EXHIBIT A-1 attached hereto,
which leases are described in SCHEDULE 1 attached hereto (the "LEASES"), and in
connection with such Leases is a party to a Settlement Agreement dated March 14,
2000 with the tenant under such Leases (the "SETTLEMENT AGREEMENT"); and
WHEREAS, Assignor desires to assign its right, title and interest as
lessor in the Leases to Assignee and to assign to Assignee its rights and
obligations under the Settlement Agreement, and Assignee desires to accept the
assignment thereof and to assume all obligations of Assignor under such Leases
and Settlement Agreement;
NOW, THEREFORE, in consideration of the promises and conditions
contained herein, the parties hereby agree as follows:
1. ASSIGNMENT OF LEASES AND SETTLEMENT AGREEMENT TO ASSIGNEE. Assignor
hereby conveys, warrants and assigns to Assignee all of its right, title and
interest in and to the Leases herein described and its rights and obligations
under the Settlement Agreement.
2. COVENANTS BY ASSIGNOR. Assignor covenants and warrants to Assignee
that as of the date hereof:
(a) The attached SCHEDULE 1 includes all of the Leases affecting the
property being acquired by Assignee from Assignor. As of the date hereof, there
are no assignments of or agreements to assign the Leases to any other party.
(b) The Leases are in full force and effect and there exist no
defaults on the part of Assignor thereunder, nor does Assignor have any actual
knowledge of any defaults or any acts or events which with the passage of time
or the giving of notice could become defaults thereunder on the
<PAGE>
part of any tenant thereunder (EXCEPT as may otherwise be referenced in a
written disclosure statement by Assignor to Assignee delivered contemporaneously
herewith).
3. INDEMNITY BY ASSIGNOR. Assignor hereby agrees to indemnify Assignee
against and hold Assignee harmless from any and all claim, cost, liability,
loss, damage or expense (collectively, "CLAIMS"), including without limitation,
reasonable attorneys' fees, originating prior to the date hereof and arising out
of the lessor's obligations under the Leases described in SCHEDULE 1 or arising
by reason of breach of the warranties contained herein; PROVIDED, however, that
Assignee shall provide Assignor reasonable notice of any such Claim and a
reasonable opportunity to defend such Claim.
4. ASSUMPTION AND INDEMNITY BY ASSIGNEE. Assignee hereby assumes all of
the landlord's or lessor's obligations under the Leases described in SCHEDULE 1
and all rights and obligations of Seller under the Settlement Agreement, and
agrees to indemnify Assignor against and hold Assignor harmless from any and all
cost, liability, loss, damage or expense, including without limitation,
reasonable attorneys' fees, originating subsequent to the date hereof and
arising out of the lessor's obligations under the Leases and/or Assignor's
rights or obligations under the Settlement Agreement.
5. ATTORNEYS FEES. In the event of any litigation between Assignor and
Assignee arising out of the obligations of the parties under this Assignment or
concerning the meaning or interpretation of any provision contained herein, the
losing party shall pay the prevailing party's costs and expenses of such
litigation, including, without limitation, reasonable attorneys' fees, at trial,
upon appeal and on any petition for review.
6. SUCCESSORS AND ASSIGNS. This Assignment shall be binding on and
inure to the benefit of the parties hereto, their heirs, executors,
administrators, successors in interest and assigns.
IN WITNESS WHEREOF, the Assignor and Assignee have executed this
Assignment the day and year first above written.
ASSIGNOR:
ASSIGNEE:
<PAGE>
SCHEDULE 1
Amendment
Tenant Lease Date Date(s)
------ ---------- -------
<PAGE>
APPENDIX TO ASSIGNMENT
FORM OF LETTER OF NOTIFICATION TO TENANT OF ASSIGNMENT
____ , 200 ____
To: ________________________
________________________
________________________
________________________
RE: Notice of Lease Assignment
Property:
Lease between _______________
Lessor, and ________________
Lessee, dated _______________
This is to notify you that the Property has been acquired by,
and the Lessor's interest in the Lease has been assigned to, -----------------
(Purchaser).
You are further notified that all rental payments under your
Lease shall be paid to Buyer at the following
address:--------------------------, in accordance with the terms of your Lease
unless you are otherwise notified in writing by Buyer.
Very truly yours,
<PAGE>
EXHIBIT I
ASSIGNMENT OF CONTRACTS
WARRANTIES AND GUARANTIES
AND OTHER INTANGIBLE PROPERTY
(See Attached)
<PAGE>
ASSIGNMENT OF CONTRACTS
WARRANTIES AND GUARANTIES
AND OTHER INTANGIBLE PROPERTY
This ASSIGNMENT OF CONTRACTS, WARRANTIES AND GUARANTIES AND
OTHER INTANGIBLE PROPERTY ("Assignment") is made and entered into this day of
__________, 200_ , by ----------("Assignor"), to --------------- ("Assignee").
FOR GOOD AND VALUABLE CONSIDERATION, the receipt of which is
hereby acknowledged, Assignor hereby conveys, and assigns and transfers unto
Assignee all of its right, title, claim and interest in and under:
(A) all transferable or assignable warranties,
representations, and guaranties made by or received from any third party
("Warranties and Guaranties") with respect to any building, building component,
structure, fixture, machinery, equipment, or material situated on, contained in
any building or other improvement situated on, or comprising a part of any
building or other improvement situated on, any part of that certain real
property described in EXHIBIT A-1 attached hereto ("Property");
(B) all rights of Assignor (if any) as additional insured,
loss payee or certificate holder in which Assignor may be named under any
insurance policies maintained by tenants of the Property, all rights of Assignor
in any architectural, mechanical, engineering, as-built and other plans,
specifications and drawings relating to the Property, all rights of Assignor in
any surveys (including any ALTA survey) and soil, environmental, engineering,
feasibility, traffic or other reports or studies relating to the ownership,
occupancy or operation of the Property, and any other contracts (if any)
specifically listed in SCHEDULE 1 attached hereto ("Contracts"); and
(C) any intangible personal property ("Intangible Personal
Property") now or hereafter owned by Assignor in connection with the Property
described in EXHIBIT A-1 or any improvements or personal property located
thereon, including without limitation, the right to use any trade name now used
in connection with the Property, all consents, authorizations, variances,
waivers, licenses, permits, certificates and approvals from any governmental or
quasi-governmental authority with respect to the Property or improvements
thereon, and any other agreements, utility contracts, or other rights relating
to the ownership, use or operation of the Property.
ASSIGNOR AND ASSIGNEE FURTHER HEREBY AGREE AND COVENANT AS
FOLLOWS:
1. INDEMNITY BY ASSIGNOR. ASSIGNOR HEREBY AGREES TO INDEMNIFY
ASSIGNEE AGAINST AND HOLD ASSIGNEE HARMLESS FROM ANY AND ALL CLAIM, COST,
LIABILITY, LOSS, DAMAGE OR EXPENSE (COLLECTIVELY, "CLAIMS"), INCLUDING WITHOUT
LIMITATION, REASONABLE ATTORNEYS' FEES, ORIGINATING PRIOR TO THE DATE HEREOF AND
ARISING OUT OF THE ASSIGNOR'S OBLIGATIONS, IF ANY, UNDER THE MATTERS ASSIGNED TO
ASSIGNEE PURSUANT HERETO; PROVIDED, HOWEVER, THAT ASSIGNEE SHALL PROVIDE
ASSIGNOR REASONABLE NOTICE OF ANY SUCH CLAIM AND A REASONABLE OPPORTUNITY TO
DEFEND SUCH CLAIM.
2. ASSUMPTION AND INDEMNITY BY ASSIGNEE. To the extent that the
Warranties, Contracts
<PAGE>
and Intangible Personal Property by their terms impose obligations upon
Assignor, Assignee hereby assumes all such obligations and agrees to indemnify
Assignor against and hold Assignor harmless from any and all cost, liability,
loss, damage or expense, including, without limitation, reasonable attorney's
fees, originating subsequent to the date hereof, arising out of such
obligations.
3. ATTORNEYS' FEES. In the event of any litigation between
Assignor and Assignee arising out of the obligations of Assignor under this
Assignment or concerning the meaning or interpretation of any provision
contained herein, the losing party shall pay the prevailing party's costs and
expenses of such litigation, including, without limitation, reasonable
attorneys' fees, at trial, upon appeal and any petition for review.
4. SUCCESSORS AND ASSIGNS. This Assignment shall be binding on
and inure to the benefit of the parties hereto, their heirs, executors,
administrators, successors in interest and assigns.
IN WITNESS WHEREOF, Assignor and Assignee have executed this
Assignment the day and year first above written.
ASSIGNOR:
ASSIGNEE:
<PAGE>
SCHEDULE 1
CONTRACTS
There are no contracts (other than the Leases being assigned under a separate
assignment instrument).
<PAGE>
EXHIBIT I
RIGHT OF ENTRY AGREEMENT
See attached.
<PAGE>
RIGHT OF ENTRY AGREEMENT
(SECTION 3.4, PURCHASE AND SALE AGREEMENT)
The undersigned, WATUMULL PROPERTIES CORP., a(n) HAWAIIAN corporation
("COMPANY"), desires to obtain a right to enter certain property owned by WREP
1998-1 LLC, a Delaware limited liability company ("OWNER") KNOWN AS PART OF THE
"G. I. JOE'S PORTFOLIO PROPERTIES", as more particularly described in a Real
Estate Purchase and Sale Agreement dated as of July ___, 2000 (the "SALE
AGREEMENT"), for purposes of examining and inspecting such property (which may
include performing surveys and inspections, doing soil tests and related
inspections and "due diligence" investigations) ("PROPERTY"). With respect to
any such entry, Owner grants its permission to Company for such entry, as
follows, and Company agrees to comply with the following:
1. NOTICE AND CO-ORDINATION. Prior to making or authorizing any entry,
Company will provide reasonable advance notice (at least 24 hours') to Owner as
to the timing and nature of the entry and the persons or company that may be
performing the inspection, survey or test. Company acknowledges that the
Property is currently leased to a party conducting business at the Property
(G.I. Joe's) and agrees that any entry, inspection survey or test will be done
in a manner that avoids interference with the business operations at the
Property and complies with the notice and other requirements of the leases
between Owner and such tenant. Access and entry will be at reasonable times and
hours and limited to the building and Property (and not the tenant's safe(s) or
other areas which tenant may reasonably believe to be security areas in which
inspections are not necessary or appropriate). In the event Company fails to
comply with the terms of this Right of Entry Agreement ("AGREEMENT") or the
existing tenant claims that any entry made or to be made by Company or on its
behalf interferes with the existing tenant's rights under its lease agreement,
Owner may suspend the right of entry until any such failure by Company or
dispute is resolved.
2. INDEMNITY. Company hereby waives, releases and discharges and agrees to
defend, indemnify, and hold Owner, its members, and its and their respective
employees, agents and representatives harmless from any claim, loss, or
liability (including attorneys' fees incurred by Owner) arising out of or in
connection with any entry onto the Property pursuant hereto or Company's failure
to comply with the provisions of this Agreement, including, (without limitation)
any claim, loss or liability arising out of or resulting from any test,
inspection, survey or examination of the Property by Company, its agents,
contractors, employees or invitees.
3. NON-ASSIGNABILITY. This Agreement is not assignable by Company (but
covers Company's employees, agents, independent contractors and invitees
entering the Property pursuant hereto).
4. INSURANCE. Company maintains commercial general liability insurance in
the amount of at least $1,000,000, and will cause Owner to be named as
additional insured on a certificate of insurance with a contractual liability
endorsement referencing this Agreement. A certificate of insurance evidencing
such coverage and showing Owner as additional insured will be delivered to Owner
prior to any entry pursuant to this Agreement and maintained with Owner for the
term of this Agreement.
5. ATTORNEY'S FEES. In the event of any litigation concerning this
Agreement, the prevailing party shall be entitled to reasonable attorneys' fees
and court costs, at trial, upon appeal and any petition for review.
<PAGE>
6. COUNTERPARTS. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original and all of which taken together shall
constitute one and the same document.
IN WITNESS WHEREOF, the undersigned has executed this Agreement as of JULY ,
2000.
OWNER: COMPANY:
WREP-1998-1 LLC, AN OREGON LIMITED WATUMULL PROPERTIES CORP., A(N)
LIABILITY COMPANY HAWAIIAN corporation
By: WREP-1998-1 Member Inc.
its manager
By: /S/ LARRY H. MENDELSOHN By: GULAB WATMULL
Printed Name: LARRY H. MENDELSOHN Printed Name: GULAB WATMULL
Its: PRESIDENT Its: PRESIDENT
By: S/S MARK H. PETERMAN
Printed Name: MARK H. PETERMAN
Its: SECRETARY
<PAGE>
PROMISSORY NOTE
$100,000.00 Portland, Oregon
Dated: as of JULY ___, 2000
The undersigned promises to pay to the order of WREP 1998-1
LLC, a Delaware limited liability company ("OWNER"), to be deposited in escrow
at First American Title Insurance Company of Oregon, as escrow agent, at its
main office in Portland, Oregon the sum of ONE HUNDRED THOUSAND DOLLARS
($100,000.00), as and for earnest money Deposit in connection with the purchase
of property known as part of the "G.I.Joe's Portfolio properties," in Oregon, as
more particularly set forth in the Real Estate Purchase and Sale Agreement,
dated as of JULY __, 2000 ("AGREEMENT"), wherein the undersigned is the
purchaser/acquiring entity. The sum of ONE HUNDRED THOUSAND DOLLARS
($100,000.00) is due WITHIN THREE (3) BUSINESS DAYS AFTER THE END OF THE REVIEW
PERIOD IN CONNECTION WITH THE REMOVAL OF CONTINGENCIES PURSUANT TO SECTION 3.7
of such Agreement.
If this note is placed in the hands of an attorney for
collection, the undersigned promises and agrees to pay holder's reasonable
attorney's fees and collection costs even though no suit or action is filed
hereon, and if suit or action is filed, the prevailing party shall be entitled
to receive from the losing party the amount of such reasonable attorney's fees
as fixed by the court or courts in which the suit or action, including any
appeal therein, is tried, heard or decided.
IN WITNESS WHEREOF, the undersigned has duly executed and delivered
this instrument as of the date shown above.
PURCHASER:
WATUMULL PROPERTIES., a(n)
HAWAIIAN corporation
By: GULAB WATMULL
Printed Name:
Its: PRESIDENT
