FORM 8-K - CURRENT REPORT
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) September 7, 1999
CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES
(Exact name of registrant as specified in its charter)
California 0-10831 95-2744492
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification Number)
incorporation)
55 Beattie Place
Post Office Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices)
(Registrant's telephone number)
(864) 239-1000
N/A
(Former name or former address, if changed since last report)
Item 5. Other Events
Consolidated Capital Institutional Properties (the "Partnership" or
"Registrant") was formed for the benefit of its limited partners to lend funds
to Consolidated Capital Equity Partners ("CCEP"). The Partnership loaned funds
to CCEP subject to a nonrecourse note with a participation interest (the "Master
Loan"). As of June 30, 1999, the Partnership's investment in the Master Loan
was approximately $88,000,000, less an allowance for impairment loss of
approximately $17,000,000, for a net balance of approximately $71,000,000.
On September 7, 1999, CCEP sold 444 de Haro, one of the properties which secured
the Master Loan, to an unaffiliated third party for net sales proceeds of
approximately $22,000,000 after payment of closing costs. CCEP realized a gain
on sale of approximately $17,000,000. The net proceeds from the sale will be
used to repay a loan from the general partner of CCEP for approximately
$650,000, with the remaining balance of approximately $20,000,000 to be paid to
the Registrant as payment on the Master Loan.
The Registrant is currently evaluating its cash needs to determine what portion
of the funds can be distributed to its partners in the near future.
Item 7. Financial Statements and Exhibits
(c) Exhibits
10.23 Purchase and Sale Contract between Western Can, Limited and Flynn Land
Company, Inc. effective September 7, 1999.
10.24 First Amendment to Purchase and Sale Agreement between Western Can,
Limited and Flynn Land Company, Inc. effective September 7, 1999.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES
By: ConCap Equities, Inc.
Its General Partner
By: /s/Patrick J. Foye
Patrick J. Foye
Executive Vice President and Director
Date: September 21, 1999
EXHIBIT 10.23
PURCHASE AND SALE CONTRACT
BETWEEN
WESTERN CAN, LTD.
AS SELLER
AND
FLYNN LAND COMPANY, INC.
AS PURCHASER
PURCHASE AND SALE CONTRACT
THIS PURCHASE AND SALE CONTRACT ("Purchase Contract") is entered into as of
the 27th day of May, 1999 (the "Effective Date") by and between WESTERN CAN,
LTD., a California limited partnership, having an address at c/o 1873 South
Bellaire Street, 17th Floor, Denver, Colorado, 80222 ("Seller") and FLYNN LAND
COMPANY, INC., a California corporation, having a principal address at One Flynn
Center, 825 Van Ness Avenue, San Francisco, California, 94109 ("Purchaser").
NOW, THEREFORE WITNESSETH: That for and in consideration of mutual
covenants and agreements herein after set forth, Seller and Purchaser hereby
agree as follows:
RECITALS
R-1. Seller holds legal title to the following parcels of real estate located in
San Francisco County, California, as more particularly described in Exhibit A
attached hereto and made a part hereof. Improvements have been constructed on
the parcels described in this Recital.
R-2. Purchaser desires to purchase and Seller has agreed to sell such land,
improvements and certain associated property, defined below as the "Property" on
the terms and conditions set forth below, (which terms and conditions shall
control in the event of any conflict with these Recitals), such that on the
Closing Date (as hereinafter defined) the Property will be conveyed by grant
deed to Buyer.
R-3. Purchaser has agreed to pay to Seller the Purchase Price for the Property,
and Seller has agreed to sell the Property to Purchaser on the terms and
conditions set forth below.
ARTICLE 1
DEFINED TERMS
1.1 Terms with initial capital letters in this Purchase Contract
shall have the meanings set forth in this Article 1.
1.1.1 "BUSINESS DAY" means any day other than a Saturday or Sunday
or Federal holiday or legal holiday in the State of California.
1.1.2 "CLOSING" means the consummation of the purchase and sale and
related transactions contemplated by this Purchase Contract in accordance with
the terms and conditions of this Purchase Contract.
1.1.3 "CLOSING DATE" means the date on which date the Closing of the
conveyance of the Property is required to be held under the terms and conditions
of this Purchase Contract and on which date full payment of the Purchase Price
for the Property shall have been paid to and received by Seller in immediately
available U.S. funds.
1.1.4 "COMMERCIAL LEASE(S)" means the interest of Seller in and to
all leases, subleases and other occupancy agreements, whether or not of record,
which provide for the use or occupancy of space or facilities on or relating to
the Property and which are in force as of the Effective Date for the Property.
All Commercial Leases in force as of the Effective Date are listed on Schedule
1.1.4 hereto.
1.1.5 "EXCLUDED PERMITS" means those Permits, which, under
applicable law, are nontransferable, and such other Permits as may be designated
as Excluded Permits on Exhibit 1.1.5, if any, attached hereto.
1.1.6 Intentionally Omitted.
1.1.7 "FIXTURES AND TANGIBLE PERSONAL PROPERTY" means all fixtures,
furniture, furnishings, fittings, equipment, machinery, apparatus, appliances
and other articles of personal property now located on the Land or in the
Improvements as of the date of this Purchase Contract and used or usable in
connection with any present or future occupation or operation of all or any part
of the Property. The term "Fixtures and Tangible Personal Property" does not
include (i) equipment leased by Seller and the interest of Seller in any
equipment provided to the Property for use, but not owned or leased by Seller,
or (ii) property owned or leased by Tenants and guests, employees or other
persons furnishing goods or services to the Property or (iii) the property and
equipment, if any, expressly identified in Exhibit 1.1.7.
1.1.8 "IMPROVEMENTS" means all buildings and improvements, located
on the Land taken "as is".
1.1.9 "LAND" means that certain tract of land located in the City of
San Francisco, State of California, commonly known as 444 DeHaro Street
(described on Exhibit A attached hereto), and all rights, privileges and
appurtenances pertaining thereto.
1.1.10 "MISCELLANEOUS PROPERTY ASSETS" means all contract rights,
leases, lease security deposits, concessions, warranties, plans, drawings and
other items of intangible personal property relating to the ownership or
operation of the Property and owned by Seller, excluding, however, (i)
receivables, (ii) Property Contracts, (iii) Commercial Leases, (iv) Permits, (v)
cash or other funds, whether in petty cash or house "banks," or on deposit in
bank accounts or in transit for deposit, (vi) refunds, rebates or other claims,
or any interest thereon, for periods or events occurring prior to the Closing
Date, (vii) utility and similar deposits, (viii) insurance or other prepaid
Items or (ix) books and records, except to the extent that Seller receives a
credit on the Closing Statement for any such item.
1.1.11 "PERMITS" means all licenses and permits granted by
governmental authorities having jurisdiction over the Property in respect of the
matter to which the applicable license or permit applies and owned by Seller or
used in or relating to the ownership, occupancy or operation of the Property or
any part thereof not subject to a Commercial Lease.
1.1.12 "PERMITTED EXCEPTIONS" means those exceptions or conditions
permitted to encumber the title to the Property in accordance with the
provisions of Section 6.2.
1.1.13 "PROPERTY" means the Land and Improvements and all rights of
Seller relating to the Land and the Improvements, including without limitation,
any rights, title and interest of Seller, if any, in and to (i) any strips and
gores adjacent to the Land and any land lying in the bed of any street, road, or
avenue opened or proposed, in front of or adjoining the Land, to the center line
thereof; (ii) any unpaid award for any taking by condemnation or any damage to
the Property by reason of a change of grade of any street or highway; (iii) all
of the easements, rights, privileges, and appurtenances belonging or in any way
appertaining to the Property; together with all Fixtures and Tangible Personal
Property, the right, if any and only to the extent transferable, of Seller
issued to Property Contracts and Commercial Leases, Permits other than Excluded
Permits and the Miscellaneous Property Assets owned by Seller which are located
on the Property and used in its operation.
1.1.14 "PROPERTY CONTRACTS" means all purchase orders, maintenance,
service, or utility contracts and similar contracts, which relate to the
ownership, maintenance, construction or repair and/or operation of the Property
and which are not cancelable on 90 days' or shorter Notice listed on Schedule
1.1.14 hereto, except Commercial Leases.
1.1.15 "PURCHASE CONTRACT" means this Purchase and Sale Contract by
and between Seller and Purchaser.
1.1.16 "PURCHASE PRICE" means the total consideration to be paid by
Purchaser to Seller for the purchase of the Property.
1.1.17 "SURVEY" shall have the meaning ascribed thereto in Section
6.12.
1.1.18 "TENANT" means any person or entity entitled to occupy any
portion of the Property under a Commercial Lease.
1.1.19 "TITLE COMMITMENT" or "Title Commitments" shall have the
meaning ascribed thereto in Section 6.1.
1.1.20 "TITLE INSURER" shall have the meaning set forth in Section
6.1.
ARTICLE 2
PURCHASE AND SALE OF PROPERTY
2.1 Seller agrees to sell and convey the Property to Purchaser and
Purchaser agrees to purchase the Property from Seller, in accordance with the
terms and conditions set forth in this Purchase Contract.
ARTICLE 3
PURCHASE PRICE & DEPOSIT
3.1 The total purchase price ("Purchase Price") for the Property shall
be Twenty-Five Million Dollars ($25,000,000.00), which shall be paid by
Purchaser, as follows:
3.1.1 On the date hereof, Purchaser shall deliver to Old Republic
Title Company ("Escrow Agent" or the "Title Insurer") a deposit in the sum of
Two Hundred Fifty Thousand and no/100 Dollars ($250,000.00), in cash, (such sum
being hereinafter referred to and held as the "Deposit"). Purchaser shall also
deliver a quitclaim deed to the Escrow Agent in the form attached as
Exhibit 3.1.1. Purchaser and Seller each approve the form of Escrow Agreement
attached as Exhibit B.
3.1.2 On or before 5:00 p.m. Pacific Daylight Savings Time on the
date of expiration of the Feasibility Period, provided Purchaser has not
terminated this Purchase Contract pursuant to Section 5.2 below, Purchaser shall
deliver to Escrow Agent an additional deposit in the sum of Two Hundred Fifty
Thousand and no/100 Dollars ($250,000.00), in cash (such sum being hereinafter
referred to as the "Additional Deposit"). The full Purchase Price, less any
adjustments for prorations pursuant to the terms of this Agreement, shall have
been paid to Seller on the Closing Date.
3.1.3 The Escrow Agent shall hold the Deposit and the Additional
Deposit and make delivery of the Deposit and the Additional Deposit to the party
entitled thereto under the terms hereof. Escrow Agent shall invest the Deposit
and the Additional Deposit in such short-term, high-grade securities, interest-
bearing bank accounts, money market funds or accounts, bank certificates of
deposit or bank repurchase agreements as Escrow Agent, in its discretion, deems
suitable, (provided that Escrow Agent shall invest the Deposit and the
Additional Deposit as jointly directed by Seller and Purchaser should Seller and
Purchaser each in their respective sole discretion determine to issue such joint
investment instructions to the Escrow Agent) and all interest and income thereon
shall become part of the Deposit and the Additional Deposit and shall be
remitted to the party entitled to the Deposit and the Additional Deposit, as set
forth below.
3.1.4 If the sale of the Property is closed by the date fixed
therefor (or any extension date provided for by the mutual written consent of
the parties hereto, given or withheld in their respective sole discretion),
monies held as the Deposit and the Additional Deposit and the Extension Deposit
(as hereinafter defined) shall be applied (and the Deposit and the Additional
Deposit paid over to the Seller) on the Date of Closing. If the sale of the
Property is not closed by the date fixed therefor (or any such extension date)
owing to failure of satisfaction of a condition precedent to Purchaser's
obligations, monies held as the Deposit and the Additional Deposit and the
Extension Deposit shall be returned and refunded to Purchaser, and neither party
shall have any further liability hereunder, subject to and except for
Purchaser's liability under Section 5.3.
3.1.5 If the sale of the Property is not closed by the date fixed
therefor (or any such extension date) owing to failure of performance by Seller,
Purchaser shall be entitled to the remedies set forth in ARTICLE 12 hereof. If
the sale of the Property is not closed by the date fixed therefor (or any such
extension date) owing to failure of performance by Purchaser, monies held as the
Deposit and the Additional Deposit and the Extension Deposit shall be forfeited
by Purchaser and the sum thereof shall go to Seller forthwith as liquidated
damages for the lost opportunity costs and transaction expenses incurred by
Seller, as more fully set forth in ARTICLE 12 below.
ARTICLE 4
FINANCING
4.1 Purchaser assumes full responsibility to expeditiously and
diligently initiate and pursue all steps necessary to obtain the funds required
for settlement, and Purchaser's acquisition of such funds shall not be a
contingency to the Closing.
ARTICLE 5
FEASIBILITY PERIOD
5.1 Subject to the terms of Section 5.3 below, for thirty (30) calendar
days following the Effective Date (i.e., through June 2, 1999 if the Effective
Date is May l, 1999) (the "Feasibility Period"), Purchaser, and its agents,
contractors, engineers, surveyors, attorneys, and employees ("Consultants")
shall have the right:
5.1.1 From time to time to enter onto the Property to conduct and
make any and all customary studies, tests, examinations and inspections, or
investigations of or concerning the Property (including without limitation,
engineering and feasibility studies, evaluation of drainage and flood plain,
soil tests for bearing capacity and percolation and surveys, including
topographical surveys);
5.1.2 From time to time to enter onto the Property to confirm any
and all matters which Purchaser may reasonably desire to confirm with respect to
the Property;
5.1.3 From time to time to enter onto the Property to ascertain and
confirm the suitability of the property for Purchaser's intended use of the
Property;
5.1.4 To review all Materials (as hereinafter defined); and
5.1.5 To review the Title Commitment (defined in Section 6.1 below).
5.2 Should the results of the matters referred to in sub-paragraphs
5.1.1, 5.1.2, 5.1.3, 5.1.4 and 5.1.5 above be satisfactory to Purchaser, then
Purchaser shall (i) give written Notice to that effect to Seller and Escrow
Agent on or before 5:00 p.m. Pacific Daylight Savings Time on the date of
expiration of the Feasibility Period, and (ii) deliver the Additional Deposit to
Escrow Agent.. If Purchaser fails to give such written notice, this Purchase
Contract shall terminate and be of no further force and effect, subject to and
except for Purchaser's liability under Section 5.3, and Escrow Agent shall
forthwith deliver the Quitclaim Deed of all of Purchaser's right and interest in
the Property to Seller, and then promptly return the Deposit to Purchaser. If
Purchaser gives Seller written Notice of approval prior to the end of the
Feasibility Period in strict accordance with the Notice provisions of this
Purchase Contract, this Purchase Contract shall remain in full force and effect
and Purchaser's obligation to purchase the Property shall be non-contingent and
unconditional except only for satisfaction of the conditions expressly stated in
this ARTICLE 5 and in ARTICLE 9.
5.3 Purchaser shall indemnify and hold Seller harmless for any actions
taken by Purchaser and its Consultants on the Property. Purchaser shall
indemnify, defend (with attorneys selected by Seller) and hold Seller harmless
from any and all claims, damages, costs and liability which may arise due to
such entries, surveys, tests, investigations and the like. Seller shall have
the right, without limitation, to disapprove any and all entries, surveys,
tests, investigations and the like that in their reasonable judgment could
result in any injury to the Property or breach of any agreement, or expose
Seller to any liability, costs, liens or violations of applicable law, or
otherwise adversely affect the Property or Seller's interest therein. No
consent by the Seller to any such activity shall be deemed to constitute a
waiver by Seller or assumption of liability or risk by Seller. Purchaser hereby
agrees to restore the Property to the same condition existing immediately prior
to Purchaser's exercise of its rights pursuant to this ARTICLE 5 at Purchaser's
sole cost and expense. Purchaser shall maintain casualty insurance and
comprehensive public liability insurance with broad form contractual and
personal injury liability endorsements with respect to the Property and
Purchaser's activities carried on therein, in amounts (including deductible
amounts) and with such insurance carriers as shall be approved by Seller and
naming Seller and its affiliates as Additional Insureds (at the option of
Seller), with endorsements acceptable to Seller, including a waiver of defenses
of the insurer based on the actions or inaction of Purchaser. Such liability
insurance shall provide coverage of not less than $1,000,000.00 for injury or
death to any one person and $3,000,000.00 for injury or death to more than one
person and $500,000.00 with respect to property damage, by water or otherwise).
The provisions of this Section shall survive the Closing or termination of this
Purchase Contract.
5.4 Purchaser shall not permit any mechanic's or materialman's liens or
any other liens to attach to the Property by reason of the performance of any
work or the purchase of any materials by Purchaser or any other party in
connection with any studies or tests conducted by or for Purchaser. Purchaser
shall give notice to Seller a reasonable time prior to entry onto the Property
and shall permit Seller to have a representative present during all
investigations and inspections conducted with respect to the Property.
Purchaser shall take all reasonable actions and implement all protections
necessary to ensure that all actions taken in connection with the investigations
and inspections of the Property, and all equipment, materials and substances
generated, used or brought onto the Property pose no material threat to the
safety of persons or the environment and cause no damage to the Property or
other property of Seller or other persons. All information made available by
Seller to Purchaser in accordance with this Purchase Contract or obtained by
Purchaser in the course of its investigations shall be treated as confidential
information by Purchaser, and, prior to the purchase of the Property by
Purchaser, Purchaser shall use its best efforts to prevent its agents and
employees from divulging such information to any unrelated third parties except
as reasonably necessary to third parties engaged by Purchaser for the limited
purpose of analyzing and investigating such information for the purpose of
consummating the transaction contemplated by this Purchase Contract, including
Purchaser's attorneys and representatives, prospective lenders and engineers.
5.5 Seller shall provide to Purchaser within ten (10) calendar days from
the Effective Date copies of all leases, contracts, engineering studies, surveys
and other materials (the "Materials") in Seller's possession or control relating
to the Property (other than proprietary information of Seller). Such Materials
shall include, without limitation, the following: (i) current real property and
personal property tax bills for the Property, (ii) a certificate or copy of the
existing insurance insuring the Property through the Closing Date, (iii) all
plans, specifications and as-built drawings for the Building to the extent in
Seller's possession or control, (iv) any seismic, geological and environmental
reports, maps and surveys concerning the Property to the extent in Seller's
possession or control, (v) copies of all Commercial Leases and Service
Contracts, and (vi) operating records for the Property (other than Seller's
proprietary information) for the previous three calendar years and January
through April, 1999 to the extent available. If the sale of the Property is not
closed by the date fixed therefor (or any such extension date), Purchaser shall,
within five (5) calendar days, return all such materials to Seller.
ARTICLE 6
TITLE
6.1 Seller shall promptly secure a commitment for title insurance for
the Property in an amount equal to the Purchase Price ("Title Commitment,")
issued by Old Republic Title Company ("Title Insurer") for an owner's title
insurance policy on the most recent standard American Land Title Association
("ALTA") Policy form, together with legible copies of all instruments identified
as exceptions therein. Seller agrees to pay $12,500.00 toward the CLTA portion
of the owner's title policy and Purchaser agrees that it shall be solely
responsible for payment of (i) all costs in excess of $12,500.00 for the CLTA
portion of the Owner's title policy, and (ii) all costs relating to procurement
of the difference between the CLTA and the ALTA coverage under the owner's title
policy and Lender's title policies.
6.2 Purchaser agrees to accept title to the Land and Improvements, so
long as the same is insurable at ordinary rates and any conveyance by grant deed
pursuant to this Purchase Contract shall be subject to the following, all of
which shall be deemed "Permitted Exceptions" and Purchaser agrees to accept the
deed and title subject thereto:
6.2.1 All exceptions shown in the Title Commitment (other than
mechanics' liens and taxes due and payable in respect of the period preceding
Closing), as may be approved by Purchaser during the Feasibility Period; and
6.2.2 Intentionally Deleted; and
6.2.3 All Commercial Leases and any other occupancy, residency,
lease, tenancy and similar agreements entered into in the ordinary course of
business; and
6.2.4 All Property Contracts and any other existing contracts
created in the ordinary course of business by Seller, which are not identified
for termination by Purchaser during the Feasibility Period; and
6.2.5 Real estate and property taxes to the extent not due and
payable; and
6.2.6 Intentionally Deleted.
6.3 The existence of other mortgages, liens, or encumbrances shall not
be objections to title, provided that properly executed instruments in
recordable form necessary to satisfy and remove the same of record are delivered
to the Purchaser at Closing or, in the alternative, with respect to any mortgage
or deed of trust liens, that payoff letters from the holder of the mortgage or
deed of trust liens shall have been delivered to and accepted by the Title
Insurer (sufficient to remove the same from the policy issued at Closing),
together in either case, with recording and/or filing fees.
6.4 Intentionally Deleted.
6.5 Intentionally Deleted.
6.6 Intentionally Deleted.
6.7 If on the Closing Date, the state of title is other than in
accordance with the requirements set forth in this Purchase Contract or if any
condition to be fulfilled by Seller shall not be satisfied, Purchaser shall
provide Seller with written Notice thereof at such time, or such title objection
or unfulfilled condition shall be deemed waived by Purchaser in which case
Purchaser and Seller shall proceed to consummate the Closing on the Closing
Date. If Purchaser timely gives Seller such Notice, Seller at its sole option
and within Seven (7) calendar days following receipt of such Notice may elect by
notice in writing to Purchaser to cure such objection or unfulfilled condition
for up to thirty (30) calendar days. Should Seller be able to cure such title
objection or condition, or should Seller be able to cause title insurance over
the same by the Closing Date or any postponed Closing Date, and Purchaser
approves such action, or should Purchaser waive such objection or condition
within such period for cure, then the Closing shall take place on or before
thirty (30) calendar days after Notice of such cure or waiver.
6.8 If during the period of cure Seller is unable or unwilling, in its
sole discretion or opinion, to eliminate such title objection or cause Title
Insurer to insure over such matter or satisfy such unfulfilled condition, Seller
shall give Purchaser written Notice thereof, and if Purchaser does not waive
such objection by written Notice delivered to Seller and the title company
issuing the Title Commitment on or before Seven (7) calendar days following the
date Seller gives such Notice, then this Purchase Contract shall automatically
terminate, in which event Purchaser shall release and quitclaim all of
Purchaser's right and interest in such Property to Seller, the Deposit shall be
returned to Purchaser, and the parties hereto shall have no further obligations
to each other.
6.9 Seller covenants that it will not voluntarily create or cause any
lien or encumbrance (other than Commercial Leases approved by Purchaser and
Property Contracts in the ordinary course of business) to attach to the Property
between the date of this Purchase Contract and the Closing Date; any such
monetary lien or encumbrance so attaching shall be discharged by the Seller at
or prior to Closing on the Closing Date or any postponed Closing Date. Except
as expressly provided above, Seller shall not be required to undertake efforts
to remove any other lien, encumbrance, security interest, exception, objection
or other matter, to make any expenditure of money or institute litigation or any
other judicial or administrative proceeding and Seller may elect not to
discharge the same.
6.10 Anything to the contrary notwithstanding, Purchaser shall not have
any right to terminate this Purchase Contract or object to any lien,
encumbrance, exception or other matter that is a Permitted Exception, that has
been waived or deemed to have been waived by Purchaser.
6.11 Intentionally Deleted.
6.12 Seller, at Seller's sole cost and expense, promptly shall cause to
be prepared a survey for the Property ("Survey") to be delivered to Purchaser
and Seller within the Feasibility Period. The Survey (i) shall be prepared in
accordance with and shall comply with the minimum requirements of the ALTA/ACSM
minimum standards 1997 edition, except as waived by Purchaser; and (ii) shall be
in a form, and shall be certified as of a date satisfactory to Title Insurer to
enable Title Insurer to delete standard survey exceptions from the title
insurance policy to be issued pursuant to the Title Commitments, except for any
Permitted Exceptions In the event the perimeter legal description of the
Property contained in the Survey differs from that contained in the deed or
deeds by which Seller took title to the Property, the latter description shall
be used in the grant deed delivered to Purchaser at Closing, and the Survey
legal shall be used in a quitclaim deed to the Property which also shall be
delivered to Purchaser at Closing.
6.12.1 Should such Survey disclose conditions that give rise to a
title exception other than a Permitted Exception, Purchaser shall have the right
to object thereto within the Feasibility Period in accordance with the
procedures set forth in ARTICLE 5 above.
ARTICLE 7
CLOSING
7.1 DATES, PLACES OF CLOSING, PRORATIONS, DELINQUENT RENT AND CLOSING
COSTS.
7.1.1 The Closing shall occur no later than thirty (30) calendar
days after the expiration of the Feasibility Period, through an escrow with
Escrow Agent, whereby the Seller and its attorneys need not be physically
present at the Closing and may deliver documents by overnight air courier or
other means. Notwithstanding the foregoing, provided Purchaser is not in
default hereunder, Purchaser shall have the option to extend the Closing Date
for thirty (30) calendar days (e.g., so that the Closing Date occurs no later
than sixty (60) days after expiration of the Feasibility Period), upon
satisfaction of the following conditions: (i) Purchaser shall deliver directly
to Seller at the time the Extension Notice (as hereinafter defined) is delivered
to Seller the sum of Two Hundred Fifty Thousand and no/100 Dollars ($250,000.00)
(the "Extension Deposit"), which Extension Deposit shall be non-refundable to
Purchaser when paid (other than in the event Seller fails to perform in closing
this transaction under the terms of this Agreement); (ii) Purchaser waives all
contingencies to the Closing of this transaction other than those conditions set
forth in Sections 9.1 and 13.1; and (iii) Purchaser notifies Seller in writing
at least seven (7) calendar days prior to the then scheduled Closing Date that
Purchaser is exercising this extension option. The Extension Deposit shall be
applied toward the Purchase Price (together with the Deposit and the Additional
Deposit), but shall not be held by Escrow Agent.
7.1.2 The Closing Date may be extended without penalty at the option
of Seller to a date not later than thirty (30) Days following the Closing Date
specified above to satisfy a condition to be satisfied by Seller, or such later
date as is mutually acceptable to Seller and Buyer.
7.1.3 All normal and customarily proratable items, including,
without limitation, Rents (as defined below), operating expenses, personal
property taxes, other operating expenses and fees, shall be prorated as of the
Closing Date, Seller being charged and credited for all of same attributable to
the period up to the Closing Date (and credited for any amounts paid by Seller
attributable to the period on or after the Closing Date) and Purchaser being
responsible for, and credited or charged, as the case may be, for all of same
attributable to the period on and after the Closing Date. All unapplied
deposits under Tenant leases, if any, shall be transferred by Seller to
Purchaser at the Closing. Seller shall pay any accrued but unpaid tenant
improvement allowances and leasing commissions for leases in effect as of the
Effective Date. The obligation to pay any accrued but unpaid tenant improvement
allowances and leasing commissions for leases executed after the Effective Date
(which are approved by Purchaser as described in Section 16.21 below), shall be
amortized over the entire term of the applicable lease (excluding extension
options) and prorated between Seller and Purchaser based on the number of days
during such term (e.g. Seller shall pay the amortized costs for the period from
the rental commencement date of such lease through but not including the Closing
Date and Purchaser shall pay the amortized costs for the period commencing on
the Closing Date through the remaining term of the applicable lease). Purchaser
shall assume any payments due parties to other agreements affecting the Property
which survive Closing and which Purchaser has agreed to assume. Any real estate
ad valorem or similar taxes for the Property, or any installment of assessments
payable in installments which installment is payable in the year of Closing,
shall be prorated to the date of Closing, based upon actual days involved. The
proration of real property taxes or installments of assessments shall be based
upon the assessed valuation and tax rate figures for the year in which the
Closing occurs to the extent the same are available; provided, that in the event
that actual figures (whether for the assessed value of the Property or for the
tax rate) for the year of Closing are not available at the Closing Date, the
proration shall be made using figures from the preceding year. The proration
shall be final and unadjustable except as provided in the following paragraph.
For purposes of this Section 7.1.3 and Section 7.1.4 and 7.1.5 the terms "Rent"
and "Rents" shall include, without limitation, base rents, additional rents,
percentage rents and common area maintenance charges. The provisions of this
Section 7.1.3 shall apply during the Proration Period (as defined below).
7.1.4 If any of the items subject to proration hereunder cannot be
prorated at the Closing because the information necessary to compute such
proration is unavailable, or if any errors or omissions in computing prorations
at the Closing are discovered subsequent to the Closing, then such item shall be
reapportioned and such errors and omissions corrected as soon as practicable
after the Closing Date and the proper party reimbursed, which obligation shall
survive the Closing for a period (the "Proration Period") from the Closing Date
until one (1) year after the Closing Date. Neither party hereto shall have the
right to require a recomputation of a Closing proration or a correction of an
error or omission in a Closing proration unless within the Proration Period one
of the parties hereto (i) has obtained the previously unavailable information or
has discovered the error or omission, and (ii) has given Notice thereof to the
other party together with a copy of its good faith recomputation of the
proration and copies of all substantiating information used in such
recomputation. The failure of a party to obtain any previously unavailable
information or discover an error or omission with respect to an item subject to
proration hereunder and to give Notice thereof as provided above within the
Proration Period shall be deemed a waiver of its right to cause a recomputation
or a correction of an error or omission with respect to such item after the
Closing Date. Any Rents that have accrued, but have not yet been paid shall be
prorated in accordance with estimates based upon the prior years' information
(or reasonable estimates of Seller if no such prior years' information is
available), and shall be subsequently readjusted and reapportioned upon receipt.
Purchaser shall pay Seller for Rents that have accrued, but are not yet due and
payable, at Closing.
7.1.5 If on the Closing Date any Tenant is in arrears in any Rent
payment under any Tenant lease (the "Delinquent Rent"), any Delinquent Rent
received by Purchaser and Seller from such Tenant after the Closing shall be
applied to amounts due and payable by such Tenant during the following periods
in the following order of priority: (i) first, to the period of time after the
Closing Date, and (ii) second, to the period of time before the Closing Date.
If Delinquent Rent or any portion thereof received by Seller or Purchaser after
the Closing are due and payable to the other party by reason of this allocation,
the appropriate sum, less a proportionate share of any reasonable attorneys'
fees and costs and expenses expended in connection with the collection thereof,
shall be promptly paid to the other party. After the Closing, Seller shall
continue to have the right, but not the obligation, in its own name, to demand
payment of and to collect Delinquent Rent owed to Seller by any Tenant, which
right shall include, without limitation, the right to continue or commence legal
actions or proceedings against any Tenant (provided, that Seller shall not
commence any legal actions or proceedings against any Tenant which continues as
a Tenant at the Property after Closing without the prior consent of Purchaser,
which will not be unreasonably withheld or delayed), and the delivery of the
Assignment as defined in Section 7.2.1.3 shall not constitute a waiver by Seller
of such right. Purchaser agrees to cooperate with Seller at no cost or
liability to Purchaser in connection with all efforts by Seller to collect such
Delinquent Rent and to take all steps, whether before or after the Closing Date,
as may be necessary to carry out the intention of the foregoing, including,
without limitation, the delivery to Seller, upon demand, of any relevant books
and records (including, without limitation, rent statements, receipted bills and
copies of tenant checks used in payment of such rent), the execution of any and
all consents or other documents, and the undertaking of any act reasonably
necessary for the collection of such Delinquent Rent by Seller; provided,
however, that Purchaser's obligation to cooperate with Seller pursuant to this
sentence shall not obligate Purchaser to terminate any Tenant lease with an
existing Tenant or evict any existing Tenant from the Property. The provisions
of this Section 7.1.6 shall apply during the Proration Period.
7.1.6 Seller shall pay the cost of all transfer taxes and recording
costs with respect to the Closing. Seller shall pay $300.00 of the escrow fees
of Escrow Agent and Purchaser shall share pay all of the other costs of the
Escrow Agent.
7.2 ITEMS TO BE DELIVERED PRIOR TO OR AT CLOSING.
7.2.1 SELLER. At Closing, Seller shall deliver to Purchaser, each
of the following items, as applicable:
7.2.1.1 Grant Deed in the form attached as Exhibit 7.2.1.1 to
Purchaser. The acceptance of the deed at Closing, shall be deemed to be full
performance of, and discharge of, every agreement and obligation on Seller's
part to be performed under this Purchase Contract, except for those that this
Purchase Contract specifically provides shall survive Closing.
7.2.1.2 A Bill of Sale without recourse or warranty in the form
attached as Exhibit 7.2.1.2 covering all Property Contracts, Commercial Leases,
Permits (other than Excluded Permits) and Fixtures and Tangible Personal
Property required to be transferred to Purchaser with respect to such Property.
Purchaser shall countersign the same so as to effect an assumption by Purchaser,
including, without limitation, of Seller's obligations thereunder.
7.2.1.3 An Assignment (to the extent assignable and in force and
effect) without recourse or warranty in the form attached as Exhibit 7.2.1.3 of
all of Seller's right, title and interest in and to the Miscellaneous Property
Assets, subject to any required consents. Purchaser shall countersign the same
so as to effect an assumption by Purchaser, including, without limitation, of
Seller's obligations thereunder.
7.2.1.4 A closing statement executed by Seller.
7.2.1.5 A vendor's affidavit or at Seller's option an indemnity,
as applicable, in the customary form reasonably acceptable to Seller to enable
Title Insurer to delete the standard exceptions, (other than matters
constituting any Permitted Exceptions to the title insurance policy set forth in
this Purchase Contract and matters which are to be completed or performed post-
Closing) to be issued pursuant to the Title Commitments; provided that such
affidavit does not subject Seller to any greater liability, or impose any
additional obligations, other than as set forth in this Purchase Contract; and
7.2.1.6 A certification of Seller's non-foreign status pursuant
to Section 1445 of the Internal Revenue Code of 1986, as amended.
7.2.1.7 Except for the items expressly listed above to be
delivered at Closing, delivery of any other required items shall be deemed made
by Seller to Purchaser, if Seller leaves such documents at the Property in their
customary place of storage or in the custody of Purchaser's representatives.
7.2.2 PURCHASER. At Closing, Purchaser shall deliver to Seller the
following items with respect to each Property being conveyed or transferred by
merger at such Closing:
7.2.2.1 The full Purchase Price as required by ARTICLE 3 hereof
plus or minus the adjustments or prorations required by this Purchase Contract.
If at Closing there are any liens or encumbrances on the Property that Seller is
obligated or elects to pay and discharge, Seller may use any portion of the
Purchase Price for the Property(s) to satisfy the same.
7.2.2.2 A closing statement executed by Purchaser.
7.2.2.3 A countersigned counterpart of the Bill of Sale in the
form attached as Exhibit 7.2.1.2.
7.2.2.4 A countersigned counterpart of the Assignment in the
form attached as Exhibit 7.2.1.3.
7.2.2.5 Such other instruments, documents or certificates as are
required to be delivered by Purchaser to Seller in accordance with any of the
other provisions of this Purchase Contract.
ARTICLE 8
REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER AND PURCHASER
8.1 REPRESENTATIONS AND WARRANTIES OF SELLER.
8.1.1 For the purpose of inducing Purchaser to enter into this
Purchase Contract and to consummate the sale and purchase of the Property in
accordance herewith, Seller represents and warrants to Purchaser the following
as of the Effective Date and as of the Closing Date:
8.1.1.1 Seller identified in the Recitals is lawfully and duly
organized, and in good standing under the laws of the state of its formation set
forth in the initial paragraph of this Purchase Contract; and has or at Closing
shall have the power and authority to sell and convey the Property and to
execute the documents to be executed by Seller and prior to Closing will have
taken as applicable, all corporate, partnership, limited liability company or
equivalent entity actions required for the execution and delivery of this
Purchase Contract, and the consummation of the transactions contemplated by this
Purchase Contract. The compliance with or fulfillment of the terms and
conditions hereof will not conflict with, or result in a breach of, the terms,
conditions or provisions of, or constitute a default under, any Purchase
Contract to which Seller is a party or by which Seller or any Subsidiary Owner
is otherwise bound. Seller has not made any other Purchase Contract for the
sale of, or given any other person the right to purchase, all or any part of any
of the Property applicable to the foregoing representation;
8.1.1.2 Seller owns insurable, fee title to the Property,
including all real property contained therein required to be sold to Purchaser,
subject only to the Permitted Exceptions (provided, however, that if this
representation is or becomes untrue, Purchaser's remedies shall be limited to
the remedies set forth in Section 6.7 hereof);
8.1.1.3 There are no adverse or other parties in possession of
the Property, except for occupants, guests and tenants under the Commercial
Leases (provided, however, that if this representation is or becomes untrue,
Purchaser's remedies shall be limited to the remedies set forth in Section 6.7
hereof).
8.1.1.4 The joinder of no person or entity other than Seller is
necessary to convey the Property, fully and completely to Purchaser at Closing,
or to fulfill Seller's obligations and Seller has all necessary right and
authority to convey and assign to Purchaser all contract rights and warranties
required to be conveyed and assigned to Purchaser hereunder;
8.1.1.5 Purchaser has no duty to collect withholding taxes for
Seller pursuant to the Foreign Investors Real Property Tax Act of 1980, as
amended;
8.1.1.6 To Seller's knowledge, there are no actions,
proceedings, litigation or governmental investigations or condemnation actions
either pending or threatened against the Property, as applicable;
8.1.1.7 Seller has no knowledge of any claims for labor
performed, materials furnished or services rendered in connection with
constructing, improving or repairing any of the Property, as applicable, caused
by Seller and which remain unpaid beyond the date for which payment was due and
in respect of which liens may or could be filed against any of the Property, as
applicable;
8.1.1.8 To the best of Seller's knowledge, the copies of the
Commercial Leases delivered to Purchaser are true, correct and complete copies
thereof.
8.1.1.9 To the best of Seller's knowledge, Seller has not
received any notification from any governmental agency that (i) hazardous
materials exist on, in or under any portion of the Property other than as
disclosed in the environmental reports delivered to Purchaser.(if any).
8.1.1.10 To Seller's best knowledge, Seller has not received any
notification from any governmental agency that the Property is in violation of
any applicable laws.
8.1.1.11 To Seller's best knowledge, the Materials delivered to
Purchaser are true and correct copies of the originals thereof.
8.1.2 Except for the representations and warranties expressly set
forth above in Subsection 8.1.1, the Property is expressly purchased and sold
"AS IS," "WHERE IS," and "WITH ALL FAULTS." The Purchase Price and the terms
and conditions set forth herein are the result of arm's-length bargaining
between entities familiar with transactions of this kind, and said price, terms
and conditions reflect the fact that Purchaser shall have the benefit of, and is
relying upon, no information provided by Seller or Broker and no statements,
representations or warranties, express or implied, made by or enforceable
directly against Seller or Broker, including, without limitation, any relating
to the value of the Property, the physical or environmental condition of the
Property, the state, federal, county or local law, ordinance, order, permit or
suitability, compliance or lack of compliance of the Property with any
regulation, or any other attribute or matter of or relating to the Property
(other than any covenants of title contained in the deeds conveying the Property
and the representations set forth above). Purchaser represents and warrants
that as of the date hereof and as of the Closing Date, it has and shall have
reviewed and conducted such independent analyses, studies, reports,
investigations and inspections as it deems appropriate in connection with the
Property. If Seller provides or has provided any documents, summaries,
opinions or work product of consultants, surveyors, architects, engineers, title
companies, governmental authorities or any other person or entity with respect
to the Property, including, without limitation, the Offering prepared by Broker,
Purchaser and Seller agree that Seller has done so or shall do so only for the
convenience of both parties, Purchaser shall not rely thereon and the reliance
by Purchaser upon any such documents, summaries, opinions or work product shall
not create or give rise to any liability of or against Seller, any Subsidiary
Owner, Seller's partners or affiliates or any of their respective partners,
officers, directors, participants, employees, contractors, attorneys,
consultants, representatives, agents, successors, assigns or
predecessors-in-interest. Purchaser shall rely only upon any title insurance
obtained by Purchaser with respect to title to the Property. Purchaser
acknowledges and agrees that no representation has been made and no
responsibility is assumed by Seller with respect to current and future
applicable zoning or building code requirements or the compliance of the
Property with any other laws, rules, ordinances or regulations, the financial
earning capacity or expense history of the Property, the continuation of
contracts, continued occupancy levels of the Property, or any part thereof, or
the continued occupancy by tenants of any Commercial Leases or, without limiting
any of the foregoing, occupancy at Closing. Prior to Closing, Seller shall have
the right, but not the obligation, to enforce its rights against any and all
Property occupants, guests or tenants. Purchaser agrees that the departure or
removal, prior to Closing, of any of such guests, occupants or tenants shall not
be the basis for, nor shall it give rise to, any claim on the part of Purchaser,
nor shall it affect the obligations of Purchaser under this Purchase Contract in
any manner whatsoever; and Purchaser shall close title and accept delivery of
the deed with or without such tenants in possession and without any allowance or
reduction in the Purchase Price under this Purchase Contract. Purchaser hereby
releases Seller from any and all claims and liabilities relating to the
foregoing matters, except as provided in Section 8.1.3 below.
8.1.3 Seller and Purchaser agree that those representations
contained in Section 8.1 shall survive Closing for a period of One (1) year
(that is, any proceeding based on the breach of a representation contained in
Section 8.1 that survives Closing must be commenced within One (1) year
subsequent to the date of such representation). In the event that Seller
breaches any representation contained in Section 8.1 and Purchaser had knowledge
of such breach during the Feasibility Period, Purchaser shall be deemed to have
waived any right of recovery and Seller shall not have any liability in
connection therewith.
8.1.4 Representations and warranties above made to the knowledge of
Seller shall not be deemed to imply any duty of inquiry. For purposes of this
Purchase Contract, the term Seller's "knowledge" shall mean and refer to only
actual knowledge of the Designated Representative (as hereinafter defined) of
the Seller and shall not be construed to refer to the knowledge of any other
partner, officer, director, agent, employee or representative of the Seller, or
any affiliate of the Seller, or to impose upon such Designated Representative
any duty to investigate the matter to which such actual knowledge or the absence
thereof pertains, or to impose upon such Designated Representative any
individual personal liability. As used herein, the term "Designated
Representative" shall refer to Dawn Hunt and Mary Caruthers at Insignia ESG, the
property manager for the Property.
8.2 REPRESENTATIONS AND WARRANTIES OF PURCHASER
8.2.1 For the purpose of inducing Seller to enter into this Purchase
Contract and to consummate the sale and purchase of the Property in accordance
herewith, Purchaser represents and warrants to Seller the following as of the
Effective Date and as of the Closing Date:
8.2.2 With respect to Purchaser and its business, Purchaser
represents and warrants, in particular, that:
8.2.2.1 Purchaser is corporation duly organized, validly
existing and in good standing under the laws of California.
8.2.2.2 Purchaser, acting through any of its or their duly
empowered and authorized officers or members, has all necessary power and
authority to own and use its properties and to transact the business in which it
is engaged, and has full power and authority to enter into this Purchase
Contract, to execute and deliver the documents and instruments required of
Purchaser herein, and to perform its obligations hereunder; and no consent of
any of Purchaser's officers or members are required to so empower or authorize
Purchaser.
8.2.2.3 No pending or, to the knowledge of Purchaser, threatened
litigation exists which if determined adversely would restrain the consummation
of the transactions contemplated by this Purchase Contract or would declare
illegal, invalid or non-binding any of Purchaser's obligations or covenants to
Seller.
8.2.2.4 Purchaser is duly authorized to execute and deliver,
acting through its duly empowered and authorized officers and members,
respectively, and perform this Purchase Contract and all documents and
instruments and transactions contemplated hereby or incidental hereto, and such
execution, delivery and performance by Purchaser does not (i) violate any of the
provisions of their respective certificates of incorporation or bylaws, (ii)
violate any provision of any law, governmental rule or regulation currently in
effect, (iii) violate any judgment, decree, writ, injunction, award,
determination or order currently in effect that names or is specifically
directed at Purchaser or its property, and (iv) require the consent, approval,
order or authorization of, or any filing with or notice to, any court or other
governmental authority.
8.2.2.5 The joinder of no person or entity other than Purchaser
is necessary to consummate the transactions to be performed by Purchaser and
Purchaser has all necessary right and authority to perform such acts as are
required and contemplated by this Purchase Contract.
8.2.3 Purchaser has not dealt with any broker, finder or any other
person, in connection with the purchase of or the negotiation of the purchase of
the Property that might give rise to any claim for commission against Seller or
lien or claim against the Property.
8.2.4 Intentionally Omitted.
ARTICLE 9
CONDITIONS PRECEDENT TO CLOSING
9.1 Purchaser's obligation to close under this Purchase Contract, shall
be subject to and conditioned upon the fulfillment of each and all of the
following conditions precedent:
9.1.1 All of the documents required to be delivered by Seller to
Purchaser at Closing pursuant to the terms and conditions hereof shall have been
delivered and shall be in form and substance reasonably satisfactory to
Purchaser;
9.1.2 Each of the representations and warranties of Seller contained
herein shall be true in all material respects as of the Closing Date;
9.1.3 Seller shall have complied with, fulfilled and performed in
all material respects each of the covenants, terms and conditions to be complied
with, fulfilled or performed by Seller hereunder;
9.1.4 The Title Company shall be prepared to issue the Title Policy
subject only to Permitted Exceptions;
9.1.5 Purchaser shall have received estoppel certificates (each, a
"Tenant Estoppel") in the form set forth on Exhibit 9.1.5 attached hereto (or
for any tenant unwilling to execute such form, the form required under the
applicable lease) from tenants occupying at least 80% of the occupied square
footage of the Property, and all tenants occupying space in excess of 5,000
square feet..
9.1.6 Notwithstanding anything to the contrary, there are no other
conditions on Purchaser's obligation to Close except as expressly set forth
above.
9.2 Without limiting any of the rights of Seller elsewhere provided for
in this Purchase Contract, Seller's obligation to close with respect to
conveyance of a particular Property under this Purchase Contract shall be
subject to and conditioned upon the fulfillment of each and all of the following
conditions precedent:
9.2.1 Purchaser's representations and warranties set forth in this
Purchase Contract shall have been true and correct in all material respects when
made, and shall be true and correct in all material respects on the Closing Date
and as of the Effective Date as though such representations and warranties were
made at and as of such date and time.
9.2.2 Purchaser shall have fully performed and complied with all
covenants, conditions, and other obligations in this Purchase Contract to be
performed or complied with by it at or prior to Closing including, without
limitation, payment in full of the Purchase Price.
9.2.3 There shall not be pending or, to the knowledge of either
Purchaser or Seller, any litigation or threatened litigation which, if
determined adversely, would restrain the consummation of any of the transactions
contemplated by this Purchase Contract or declare illegal, invalid or nonbinding
any of the covenants or obligations of the Purchaser.
9.2.4 Intentionally Deleted.
ARTICLE 10
BROKERAGE
10.1 Seller represents and warrants to Purchaser that it has dealt only
with Trammell Crow Company, 1241 East Hillsdale Boulevard, Suite 200, Foster
City, California 94404 ("Broker") in connection with this Purchase Contract.
Seller and Purchaser each represents and warrants to the other that other than
Broker and Charles McCabe of Cushman & Wakefield ("Purchaser's Broker"), it has
not dealt with or utilized the services of any other real estate broker, sales
person or finder in connection with this Purchase Contract, and each party
agrees to indemnify the other party from and against all claims for brokerage
commissions and finder's fees arising from or attributable to the acts of
omissions of the indemnifying party. Purchaser represents and warrants to
Seller that Purchaser shall be responsible for the payment of any commission due
Purchaser's Broker, and Purchaser hereby indemnifies Seller against any claim
made by or through Purchaser's Broker against Seller for payment of said
commission.
10.2 Seller agrees to pay Broker a commission according to the terms of a
separate agreement. Broker shall not be deemed a party or third party
beneficiary of this Purchase Contract.
10.3 Broker assumes no responsibility for the condition of the Property
or representation for the performance of this Purchase Contract by the Seller or
Purchaser.
ARTICLE 11
POSSESSION
11.1 Possession of the Property subject to the Permitted Exceptions shall
be delivered to Purchaser at the Closing, subject to Purchaser's right of entry
for inspection as set forth in ARTICLE 5.
ARTICLE 12
DEFAULTS AND REMEDIES
12.1 IN THE EVENT PURCHASER DEFAULTS HEREUNDER PRIOR TO THE CLOSING DATE
AND CONSUMMATION OF THE CLOSING DOES NOT OCCUR BY REASON OF SUCH DEFAULT BY
PURCHASER, SELLER AND PURCHASER AGREE THAT IT WOULD BE IMPRACTICAL AND EXTREMELY
DIFFICULT TO ESTIMATE THE DAMAGES WHICH SELLER MAY SUFFER. THEREFORE, SELLER
AND PURCHASER HEREBY AGREE THAT, EXCEPT FOR THE PURCHASER'S OBLIGATIONS TO
SELLER UNDER SECTION 5.3, THE REASONABLE ESTIMATE OF THE TOTAL NET DETRIMENT
THAT SELLER WOULD SUFFER IN THE EVENT THAT PURCHASER DEFAULTS HEREUNDER PRIOR TO
THE CLOSING DATE IS AND SHALL BE, AS SELLER'S SOLE REMEDY (WHETHER AT LAW OR IN
EQUITY), THE RIGHT TO RECEIVE FROM THE ESCROW AGENT AND RETAIN THE FULL AMOUNT
OF THE DEPOSIT AND THE ADDITIONAL DEPOSIT AND THE EXTENSION DEPOSIT. THE
PAYMENT AND PERFORMANCE OF THE ABOVE AS LIQUIDATED DAMAGES IS NOT INTENDED AS A
FORFEITURE OR PENALTY WITHIN THE MEANING OF APPLICABLE LAW AND IS INTENDED TO
SETTLE ALL ISSUES AND QUESTIONS ABOUT THE AMOUNT OF DAMAGES SUFFERED BY SELLER
IN THE APPLICABLE EVENT, EXCEPT ONLY FOR DAMAGES UNDER SECTION 5.3 ABOVE,
IRRESPECTIVE OF THE TIME WHEN THE INQUIRY ABOUT SUCH DAMAGES MAY TAKE PLACE.
UPON ANY SUCH FAILURE BY PURCHASER HEREUNDER, THIS PURCHASE CONTRACT SHALL BE
TERMINATED, AND NEITHER PARTY SHALL HAVE ANY FURTHER RIGHTS OR OBLIGATIONS
HEREUNDER, EACH TO THE OTHER, EXCEPT FOR THE PURCHASER'S OBLIGATIONS TO SELLER
UNDER SECTION 5.3 ABOVE, AND THE RIGHT OF SELLER TO COLLECT SUCH LIQUIDATED
DAMAGES TO THE EXTENT NOT THERETOFORE PAID BY PURCHASER.
___________________ __________________
SELLER'S PURCHASER'S
INITIALS INITIALS
12.2 Provided that Purchaser has not terminated this Purchase Contract
and is not otherwise in default hereunder, if the Closing does not occur as a
result of Seller's default hereunder, Purchaser's sole remedy shall be to elect
to terminate this Purchase Contract and receive reimbursement of the Deposit and
the Additional Deposit (or so much thereof as has been received by Escrow Agent)
and the Extension Deposit (if said Extension Deposit has been paid to Seller),
or to seek specific performance of this Purchase Contract.
ARTICLE 13
RISK OF LOSS OR CASUALTY
13.1 If all of the Property or any substantial portion of the Property
(where the loss is in excess of $300,000) is destroyed, or damaged, the
occurrence of any of which events is hereinafter called a "Loss" in this Section
13.1), Seller shall promptly notify Buyer in writing of the nature and scope of
the Loss and whether the Loss is covered in whole or in part by applicable
insurance. Buyer, after completing whatever inquiries and analyses Buyer may
deem appropriate, but in no event later than twenty (20) days after Purchaser is
notified of such Loss, shall promptly notify Seller in writing whether Buyer
elects to cancel this Agreement or to close the purchase of the Property. If
Buyer elects to cancel, neither party shall have any further liability or
obligations to the other hereunder other than the indemnification provisions
described in Section 5.3 of this Purchase Contract. If Buyer elects to proceed
to close the purchase, there shall be no reduction or abatement of the Purchase
Price, but Buyer shall have the right to require Seller to assign to Buyer any
available insurance proceeds or claims for insurance proceeds with respect to
the Loss and Seller shall pay Buyer cash, or authorize a credit against the
Purchase Price, equal to the full amount of any deductible under the applicable
insurance policy. If Buyer requires Seller so to assign any proceeds, or claim
therefor to Buyer in connection with the Loss, all insurance proceeds and
damages payable with respect to the Loss or damage shall be payable to Buyer,
and Buyer shall have the exclusive right to direct any negotiations, litigation
or settlement related thereto.
ARTICLE 14
RATIFICATION
14.1 This Purchase Contract shall be null and void unless fully ratified
by Purchaser and Seller on or before May 28, 1999.
ARTICLE 15
EMINENT DOMAIN
15.1 In the event that at the time of Closing all or any part of the
Property is (or has previously been) acquired, or is about to be acquired, by
authority of any governmental agency in purchase in lieu thereof (or in the
event that at such time there is any notice of any such acquisition by any such
governmental agency), Purchaser shall have the right, at Purchaser's option, to
terminate this Purchase Contract by giving written Notice within Fifteen (15)
days of the occurrence of such event and recover the Deposit and the Additional
Deposit (if paid) hereunder and the Extension Deposit (if paid hereunder), or to
settle in accordance with the terms of this Purchase Contract for the full
Purchase Price and receive the full benefit or any condemnation award. It is
expressly agreed between the parties hereto that this paragraph shall in no way
apply to customary dedications for public purposes which may be necessary for
the development of the Property.
ARTICLE 16
MISCELLANEOUS
16.1 EXHIBITS AND SCHEDULES
All Exhibits and Schedules annexed hereto are a part of this Purchase
Contract for all purposes.
16.2 ASSIGNABILITY
Subject to Section 16.18, this Purchase Contract is not assignable without
first obtaining the prior written approval of the non-assigning party, such
approval not to be unreasonably withheld or delayed. Purchaser may not assign
any of Purchaser's rights or duties hereunder without the prior written consent
of Seller, which consent shall not be unreasonably withheld; provided, that
Purchaser may assign this Agreement to any other entity controlled by Purchaser
which has the financial capacity to perform the obligations of Purchaser
hereunder (as determined by Seller in its reasonable discretion). No assignment
by Purchaser shall relieve Purchaser or its obligations under this Agreement.
16.3 BINDING EFFECT
This Purchase Contract shall be binding upon and inure to the benefit of
Seller and Purchaser, and their respective successors, heirs and permitted
assigns.
16.4 CAPTIONS
16.4.1 The captions, headings, and arrangements used in this
Purchase Contract are for convenience only and do not in any way affect, limit,
amplify, or modify the terms and provisions hereof.
16.5 NUMBER AND GENDER OF WORDS
Whenever herein the singular number is used, the same shall include the
plural where appropriate, and words of any gender shall include each other
gender where appropriate.
16.6 NOTICES
All Notices, demands, requests and other communications required pursuant
to the provisions of this Purchase Contract ("Notice") shall be in writing and
shall be deemed to have been properly given or served for all purposes (i) if
sent by Federal Express or the nationally recognized overnight carrier for next
business day delivery, on the first business day following deposit of such
Notice with such carrier, or (ii) if personally delivered, on the actual date of
delivery or (iii) if sent by certified mail, return receipt requested postage
prepaid, on the Fifth (5th) business day following the date of mailing addressed
as follows:
If to Seller: If to Purchaser:
Western Can, Ltd. Flynn Land Company, Inc.
c/o 1873 S. Bellaire Street One Flynn Center
17th Floor 825 Van Ness Avenue
Denver, Colorado 80222 San Francisco, California
Attn: Mr. Harry Alcock 94109
Attn: Mr. Gregory G. Flynn
and With a copy to:
Heller, Ehrman, White &
Argent Real Estate McAuliffe
1401 Brickell Avenue 333 Bush Street
Suite 520 San Francisco, California
Miami, Florida 33131 94104
Attn: Mr. David Marquette Attn: William R. Mackey, Esq.
With a copy to:
Loeb & Loeb LLP
1000 Wilshire Boulevard, Suite
1800
Los Angeles, California 90017
Attn: Andrew S. Clare, Esq.
Karen N. Higgins, Esq.
Any of the parties may designate a change of address by Notice in writing
to the other parties. Whenever in this Purchase Contract the giving of Notice
by mail or otherwise is required, the giving of such Notice may be waived in
writing by the person or persons entitled to receive such Notice.
16.7 GOVERNING LAW AND VENUE
The laws of the State of California shall govern the validity,
construction, enforcement, and interpretation of this Purchase Contract, unless
otherwise specified herein except for the conflict of law provisions thereof.
All claims, disputes and other matters in question arising out of or relating to
this Purchase Contract, or the breach thereof, shall be decided by proceedings
instituted and litigated in the United States District Court for the district in
which the Property is situated, and the parties hereto expressly consent to the
venue and jurisdiction of such court.
16.8 ENTIRETY AND AMENDMENTS
This Purchase Contract embodies the entire Purchase Contract between the
parties and supersedes all prior Purchase Contracts and understandings, if any,
relating to the Property, and may be amended or supplemented only by an
instrument in writing executed by the party against whom enforcement is sought.
16.9 SEVERABILITY
If any of the provisions of this Purchase Contract is held to be illegal,
invalid, or unenforceable under present or future laws, such provision shall be
fully severable. The Purchase Contract shall be construed and enforced as if
such illegal, invalid, or unenforceable provision had never comprised a part of
this Purchase Contract; and the remaining provisions of this Purchase Contract
shall remain in full force and effect and shall not be affected by the illegal,
invalid, or unenforceable provision or by its severance from this Purchase
Contract. In lieu of such illegal, invalid, or unenforceable provision, there
shall be added automatically as a part of this Purchase Contract a provision as
similar in terms to such illegal, invalid, or unenforceable provision as may be
possible to make such provision legal, valid, and enforceable.
16.10 MULTIPLE COUNTERPARTS
This Purchase Contract may be executed in a number of identical
counterparts. If so executed, each of such counterparts is to be deemed an
original for all purposes and all such counterparts shall, collectively,
constitute one Purchase Contract. In making proof of this Purchase Contract, it
shall not be necessary to produce or account for more than one such
counterparts.
16.11 FURTHER ACTS
In addition to the acts and deeds recited herein and contemplated and
performed, executed and/or delivered by Seller and Purchaser, Seller and
Purchaser agree to perform, execute and/or deliver or cause to be performed,
executed and/or delivered any and all such further acts, deeds, and assurances
as may be necessary to consummate the transactions contemplated hereby.
16.12 CONSTRUCTION
No provision of this Purchase Contract shall be construed in favor of, or
against, any particular party by reason of any presumption with respect to the
drafting of this Purchase Contract; both parties, being represented by counsel,
having fully participated in the negotiation of this instrument.
16.13 CONFIDENTIALITY
Neither party shall disclose the terms and conditions contained in this
Purchase Contract, and Purchaser and Seller shall keep the same confidential,
provided that Purchaser and Seller may disclose the terms and conditions of this
Purchase Contract (i) as required by law, (ii) to consummate the terms of this
Purchase Contract, or any financing relating thereto, or (iii) to Purchaser's or
Seller's lenders, partners, attorneys and accountants,. Any information
provided by Seller to Purchaser under the terms of this Purchase Contract is for
informational purposes only. Except for the express representations and
warranties set forth herein, by providing such information to Purchaser, Seller
makes no representation or warranty, express, written, oral, statutory, or
implied, and all such representations and warranties are hereby expressly
excluded. Except for the express representations and warranties set forth
herein, Purchaser shall not in any way be entitled to rely upon the accuracy of
such information. Such information is also confidential and Purchaser shall be
prohibited from making such information public to any other person or entity
other than its agents and legal representatives, without Seller's prior written
authorization, which may be granted or denied in Seller's sole discretion.
16.14 TIME OF THE ESSENCE
It is expressly agreed by the parties hereto that time is of the essence
with respect to this Purchase Contract.
16.15 CUMULATIVE REMEDIES AND WAIVER
Except as expressly provided herein, no remedy herein conferred or reserved
is intended to be exclusive of any other available remedy or remedies herein
conferred or referred, but each and every such remedy shall be cumulative and
shall be in addition to every other remedy given under this Purchase Contract.
No delay or omission to exercise any right or power accruing upon any default,
omission, or failure of performance hereunder shall impair any right or power or
shall be construed to be a waiver thereof, but any such right and power may be
exercised from time to time and as often as may be deemed expedient. No waiver,
amendment, release, or modification of this Purchase Contract shall be
established by conduct, custom, or course of dealing.
16.16 LITIGATION EXPENSES
In the event either party hereto commences litigation against the other to
enforce its rights hereunder, the prevailing party in such litigation shall be
entitled to recover from the other party its reasonable attorneys' fees and
expenses incidental to such litigation.
16.17 TIME PERIODS
Should the last day of a time period fall on a weekend or legal holiday,
the next Business Day thereafter shall be considered the end of the time period.
16.18 EXCHANGE
At Seller's sole cost and expense, Seller may structure the sale of the
Property to Purchaser as a Like Kind Exchange under Internal Revenue Code
Section 1031 whereby Seller will acquire certain property (the "Like Kind
Exchange Property") in conjunction with the sale of the Property (the "Like Kind
Exchange"). Purchaser shall cooperate fully and promptly with Seller's conduct
of the Like Kind Exchange, provided that all costs and expenses generated in
connection with the Like Kind Exchange shall be borne solely by Seller, and
Purchaser shall not be required to take title to or contract for the purchase of
any other property. If Seller uses a qualified intermediary to effectuate the
exchange, any assignment of the rights or obligations of Seller hereunder shall
not relieve, release or absolve Seller of its obligations to Purchaser. In no
event shall the Closing Date be delayed by the Like Kind Exchange. Seller shall
indemnify and hold harmless Purchaser from and against any and all liability
arising from and out of the Like Kind Exchange.
16.19 NO PERSONAL LIABILITY OF OFFICERS, TRUSTEES OR DIRECTORS OF SELLER
Purchaser acknowledges that this Agreement is entered into by Seller which
is a California business trust, and Buyer agrees that no individual officer,
trustee, director or representative of Seller shall have any personal liability
under this Agreement or any document executed in connection with the
transactions contemplated by this Agreement.
16.20 NO EXCLUSIVE NEGOTIATIONS
Seller shall have the right, at all times, to solicit backup offers and
enter into discussions, negotiations, or any other communications concerning or
related to the sale of the Property with any third-party; provided, however,
that such communications are subject to the terms of this Agreement, and that
Seller shall not enter into any contract or binding agreement with a third-party
for the sale of the Property unless such agreement is contingent on the
termination of this Agreement without the Property having been conveyed to
Buyer.
16.21 COVENANTS REGARDING LEASES AND OPERATIONS
Seller agrees to timely provide Purchaser with copies of any lease
proposals (including new leases and requests for any lease modifications) and
Seller agrees not to enter into any new leases on the Property, or terminate or
modify any existing leases on the Property without the prior written consent of
Purchaser (which consent shall not be unreasonably withheld). If Seller desires
to enter into any new lease, or terminate or modify any existing leases, Seller
shall provide Purchaser written notice thereof. If Purchaser fails to deliver
written disapproval thereof to Seller within five (5) days after Purchaser's
receipt of such notice, Purchaser shall be deemed to have approved the proposed
action. If during the Feasibility Period Purchaser unreasonably disapproves of
any proposed action (as determined by Seller in its reasonable discretion),
Seller shall have the option to terminate this Purchase Contract upon five (5)
days written notice to Purchaser. Upon Purchaser's receipt of such termination
notice, Purchaser shall have the right to either accept the termination (in
which case the Deposit shall be returned to Purchaser and neither party shall
have any obligation to the other, except as expressly set forth herein for
provisions which survive termination), or Purchaser may approve the proposed
action (which was previously disapproved), and permit the Purchase Contract to
continue. If notice of approval of the proposed lease is not delivered to
Seller within five (5) days after Purchaser's receipt of the termination notice,
Purchaser shall be deemed to have accepted Seller's termination. Seller shall
not have the foregoing right of termination after the expiration of the
Feasibility Period. Seller agrees to use commercially reasonable efforts to
maintain the Property (including repair and/or replacement of any damaged
equipment or facilities) in its ordinary course of business from the Effective
Date through the Close of Escrow.
NOW WHEREFORE, the parties hereto have executed this Purchase Contract
under seal as of the date first set forth above.
"SELLER" WESTERN CAN, LTD.
a California limited partnership
By CONSOLIDATED CAPITAL EQUITY PARTNERS
a California general partnership, Its
General Partner
By
Name
Its
"PURCHASER" FLYNN LAND COMPANY, INC.
a California corporation
By
Name
Its
EXHIBIT 10.24
FLYNN LAND COMPANY, INC.
One Flynn Center
825 Van Ness Avenue
San Francisco, CA 94109
July 12, 1999
Western Can Ltd.
c/o Karen Nielsen Higgins, Esq.
Loeb & Loeb, LLP
1000 Wilshire Blvd., Ste. 1800
Los Angeles, CA 90017
Re: FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT
This letter agreement shall be the First Amendment to that certain Purchase
and Sale Agreement dated May 27, 1999 between Flynn Land Company, Inc., as
Purchaser and Western Can, Ltd., as Seller (the "Agreement"). Capitalized terms
used herein shall be as defined in the Agreement.
1. Purchase Price/Additional Deposit. Section 3.1 is amended to provide
that the total Purchase Price shall be Twenty Three Million Two Hundred Fifty
Thousand Dollars ($23,250,000). Purchaser represents to Seller that the
Additional Deposit has been deposited with the Escrow Agent, and that the total
Deposit and Additional Deposit now held by Escrow Agent is $500,000.
2. Feasibility and Environmental Inspection. Purchaser has waived all
contingencies set forth in Section 5 with the sole exception of the completion
and approval of a Phase II environmental inspection including soil borings and
samples. For that purpose alone the Feasibility Period is extended to July 22,
1999 at 5:00 pm. Should Purchaser not approve the Phase II environmental report
by notice in writing to Seller by 5:00 PM on July 22, 1999, the Agreement shall
be terminated and the Deposit, including the Additional Deposit, shall be
returned to Purchaser, less any cancellation fees payable by Purchaser under the
Agreement. If an appropriate notice is delivered, the Deposit and the
Additional Deposit shall become immediately non-refundable except as expressly
set forth in the Agreement.
3. Extension of Closing and Extension Deposit. Under Section 7.1.1, the
Extension Deposit (which shall be delivered directly to Seller) is reduced from
$250,000 to $125,000 and the period of the extension is reduced from thirty (30)
days to fifteen (15) days.
4. Release/Approval Regarding Landkamer Lease. Purchaser hereby
unconditionally approves that certain lease extension for Landkamer Partners as
proposed to Purchaser under a cover letter of Seller's counsel on June 3, 1999.
In addition, as a material consideration for Seller agreeing to the terms of
this Amendment, Purchaser hereby expressly waives and forever releases any and
all claims that the Purchaser may now have or hereafter acquire against Seller
from or related to the foregoing lease proposal and lease extension. The
foregoing waiver and release shall survive the Closing.
5. Confirmation. Except as modified hereby, the Agreement is ratified
and confirmed.
If the foregoing is agreeable to you please sign as indicated on a copy of
this letter agreement and return the signed copy to the undersigned.
Yours very truly,
Gregory G. Flynn, President
The undersigned hereby agrees to the provisions of the foregoing
First Amendment.
Western Can, Ltd.
By:
